Teresa Pacelli delived this talk at The Dallas Ergonomics Forum on 18th July 2017. In her talk she described the costs associated with presenteeism and absenteeism and their impact on the wider organisation. She then offered solutions to the problem of this hidden cost.

1. MANAGE WHAT YOU CAN MEASURE
The costly side effect of the unmeasurable
Teresa L. Pacelli AIC, CIC
National Risk Consultant – Workers Compensation Claim Solutions

2. WOODY ALLEN
“80% of success in life can be attributable to just
showing up!”

4. • Think about days you were limited in the amount or kind of work you could do; days
you accomplished less than you would like; or days you could not do your work as
carefully as usual?
• How do you quantify them?

6. WHAT IS EMPLOYEE PRESENTEEISM AND
WHAT ARE THE CAUSES?

7. PRESENTEEISM – WHAT IS IT?
• Everyone knows the impact of employee absenteeism on the workplace. But there is
an increasingly common threat that may be even more dangerous to your company
culture. It’s called presenteeism.
• Like a slippery, undetected disease invading your office, it slinks through your
employee ranks, slowing down work, stealing productivity and sucking up employee
happiness.

8. DEFINITION OF PRESENTEEISM
Generally defined as a loss of personal productivity resulting from
health-related or personal issues.

9. DEFINITION OF PRESENTEEISM
Investopedia defines it further as a:
“loss of workplace productivity resulting from employee health problems
and/or personal issues. Even though the employee is physically present at
work, because they are experiencing problems such as arthritis, allergies, family
illness or stress, they are unable to fully perform their work duties and are
more likely to make mistakes in the work they do perform.”

10. DEFINITION OF PRESENTEEISM
• Presenteeism is not to be confused with malingering (pretending to be ill to avoid
work) or just slacking off (deliberately putting off duties at work)
• Presenteeism should be considered a particular condition of being unable to
perform at the highest level due to real physical or mental health challenges.
• Unlike its close relation, absenteeism, presenteeism is more difficult to identify, and
also has insidious, hard-to-track far-reaching consequences for the affected
company.

11. OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION
• Since the passage of the U.S.
Occupational Safety and Health Act
in 1970, the incidences of
workplace-related injuries and
illnesses in the U.S. have declined
by as much at 67 percent.

12. LET’S PUT THE “H” BACK IN OSHA
• However, workplace safety and health is no longer just about sending workers
home with all of their fingers and toes.
• it’s about protecting them physically and also about supporting them mentally by
keeping them healthy and engaged.

13. US HAS A SHORTAGE OF HEALTH
• US is one of the leading countries for cancer risk
• Coronary heart disease rates are high, diabetes rates and risk factors are increasing
largely due to our diet
• High levels of violence-related death are present
• Leading causes of premature death:
• Tobacco
• Diet
• Physical inactivity
• Alcohol
• Motor Vehicle Accidents
• Sexual Behaviors
• Drugs

14. PREVENTION
“We spend less than .04 cents of every health care dollar on
prevention and public health even though 80% of the risk factors
involved in the leading causes of death are behavior-related,
lifestyle choices and thus preventable.”
President Barack Obama

15. ENVIRONMENT
“It is unreasonable to expect people to change their behavior when
the social, cultural and physical environments around them fully
conspire against them…”
Sir Michael Marmot/Institute of Medicine Report

16. HEALTH CONDITIONS MOST
FREQUENTLY ASSOCIATED WITH
PRESENTEEISM:
• allergies
• back or neck pain
• hypertension
• obesity
• gastroesophageal reflux disease (GERD)
• arthritis
• asthma
• migraine headaches
• fatigue (sleep disorders)
• depression

17. NON-HEALTH RELATED CONDITIONS
ASSOCIATED WITH PRESENTEEISM
• Personal
• Financial Issues
• Aging Parents
• Children
• Romance – good bad or indifferent
• Socio-Economic Issues
• Diet
• Global Issues
• Emotional/Spiritual Issues
• Organizational
• Pay
• Sick pay
• Attendance control
• Downsizing
• Permanency of employment
• Job design
• Job demands
• Adjustment latitude
• Ease of replacement
• Teamwork (or lack thereof)

18. WORK-LIFE BALANCE TRUTHS
• Workers will want, need and seek out more flexibility
• Organizing work around people works better than organizing people around work.
• Every workplace policy will have some effect on the health and wellbeing of workers
– take steps to make sure it is a positive one
• View every workplace decision through the lens of “The health and wellbeing of the
worker”

19. CAUSES OF PRESENTEEISM
• Pain conditions can lead to sleeplessness and distract from focus.
• Medications utilized to control pain, allergies, and multiple others of these
conditions similarly influence focus, suggesting an additional value for non-
pharmacologic approaches.
• Doctor visits need to be managed. Half-days can be quickly lost.
• Bad attitudes are catching.
• Dollars disappear with each level of poor concentration.
• The productivity losses show up on the employer’s ledgers multiple ways.

20. • Most knowledgeable employers understand the direct link between employee
health and their company’s success and profitability, and remain committed to
company programs that support employee health and well-being.
• But how do they know they are focusing their dollars on the “right” things?
• How do you go about making targeted investments in your employees health and
wellbeing?

21. WORKERS’ COMPENSATION CLAIM EXAMPLE
• May 2013
• 47 year old maintenance worker; married
• Leans against a hand railing which breaks
• Worker falls 2 feet; lacerates leg; lower leg fracture; low back contusion; Shoulder
strain/contusion
• Estimated disability for 8-12 weeks total disability; 12 weeks temporary disability;
estimated return to work full – no restrictions

22. FINANCIAL IMPACT OF COMORBID
CONDITIONS
Reserves WITHOUT Comorbidities
Temporary Total Disability: 615.39 x 6 wks =
$3692
Temporary Partial Disability: 615.39 x 50% for 6
weeks: $1846
6 weeks full wage – restricted duty: 0
Medically Stationary within 6 months
PPD Scheduled = $0 - $3500
Medical Reserve: $34,000
Legal: $3500
Return To Work: full duty without restriction
Total cost estimate: $46,538
Reserves WITH Comorbidities
Temporary Total Disability: 78 weeks x 615.39 = $48,000
Temporary Partial Disability: 24 weeks x 615.39 x 50% =
$7,385
24 weeks = permanently restricted return to work
Medically Stationary with 2 years
PPD Scheduled: $17,022
PPD Un-Scheduled: $15,761
Medical Reserve: $599,364
Legal: $75,000
No Return to Work = $8,000
Total Cost Estimate: $770,532

23. THE CONSEQUENCES
Quantitative? Or Qualitative?

24. CONSEQUENCES - COST
• Employees take an average of four days off per year for sick time, but
admitted to being unproductive an average of 57.5 days a year.
• corresponds to a person working at 75 percent of their maximum productivity
level.
http://ehstoday.com/safety-leadership/presenteeism-costs-
business-10-times-more-absenteeism

25. CONSEQUENCES - COST
• According to the same study, the total annual cost of lost U.S. productivity
attributable to health-related conditions exceeds $225 billion, with the cost of
presenteeism estimated at more than $150 billion, or two-thirds of the total.
• In a separate study, researchers estimate that employee depression alone costs U.S.
companies $35 billion a year in reduced performance.
“Lost Productive Work Time Costs from Health Conditions in the Unites States: Results from the American Productivity Audit,” W. Stewart, et al., Journal of Occupational and Environmental Medicine, Vol. 45, No.
12, December 2003. Web. 18 August 2015. http:// www.nationalpartnership.org/research-library/work-family/psd/lost-productive-work-time-american-productivity-audit.pdf.
“Health and Productivity as a Business Strategy: A Multiemployer Study,” R. Loeppke, MD, et al, Journal of Occupational and Environmental Medicine, Vol. 51, No. 4, April 2009. Web. 18 August
2015. https://www.acoem.org/uploadedFiles/Healthy_Workplaces_Now/HPM%20As%20a%20Business%20Strategy.pdf.

26. CONSEQUENCES - COST
• Employees are in the office
but distracted, sick, or
exhausted, they are draining
the company’s productivity.
• Presenteeism can be just as
costly as a physical injury in
the workplace

27. CONSEQUENCES - MORALE
• Employees who are distracted at work by
underlying health conditions are more
likely to make mistakes or errors in
judgement.
• Less favorable performance evaluations,
reduced compensation levels and fewer
promotional opportunities.
• Even among highly-committed employees,
job disengagement and dissatisfaction are
likely to increase.

28. CONSEQUENCES - MORALE
• Irritability rubs off on co-workers, stirring its own nest of water-cooler chatter and
productivity barriers.
• Bad attitudes are catching.
“Cost of Lost Productive Work Time Among U.S. Workers with Depression,” W. Stewart, MD, et al, The Journal of the American Medical Association, Vol. 289, No. 23, June 18, 2003. Web. 18 August 2015.
http://jama.jamanetwork.com/article.aspx?articleid=196767&resultclick=1.

29. ADDRESSING THE ISSUE

30. Identifying and addressing presenteeism can improve your company performance and
improve the lives of your employees.

31. HEALTHCARE – WELLNESS BENEFITS
• Employers are the primary source of healthcare
• Coverage for:
• Acute medical conditions
• Conduct diagnostic testing
• Prescription medication
• Partial coverage for diagnosis and treatment of mental health issues
• Wellness
• Smoking cessation programs
• Fees for exercise facilities
• Supervised dieting or nutrition programs

32. CHRONIC CONDITIONS?
• Insurance coverage for some chronic conditions may be limited in duration, with
many employees forced to stop treatment when their insurance coverage runs out.
• In other cases, less severe health issues may go undiagnosed, or employees may
simply fail to seek a medical opinion due to lack of time or other pressing priorities.

33. SHIFTING COSTS?
• Shifting increased medical coverage costs to employees engages the consumer but
it also...
• Reduces monies available for treatment of non-life-threatening chronic conditions that
are typically the primary cause of employee presenteeism.
• As resources to address the root causes of presenteeism diminish, the financial and
productivity impact on employers is only likely to increase.

34. INTEGRATED APPROACH

35. TOTAL WORKER HEALTH
• Example of Integration
• Respiratory protection programs that comprehensively address tobacco abuse
• Ergonomic Consultations that also discuss arthritis management strategies
• Stress Management efforts that FIRST seek to diminish workplace stressors, ONLY THEN
work on building worker resiliency
• Integrated training and prevention programs (falls, motor vehicle safety, first aid, hearing
conservation, stretching, flexibility and lifting programs)
• Comprehensive screenings for work and non-work risks
• Occupational health combined with a workplace primary care home model
• Full integration of: clinics, behavioral health, traditional safety, health promotion
programs, coaching, EAP, nutrition, disability and workers’ compensation.

36. SILOS
• Create duplication of efforts attempting to address the same root causes – wasting
valuable resources that could be applied to new programs and initiatives that could
make a bigger impact.
• Lack of coordination between separate health and safety programs usually fails to
take full advantage of the knowledge, experience and insight of the respective
professionals involved, losing potentially supporting synergies.
• Reduces company-wide visibility of these efforts, and serves to mask their potential
contribution to achieving a company’s overall strategic goals and objectives.

37. CULTURE OF HEALTH
• Addressing the underlying health-related
causes of employee presenteeism, such
as chronic health conditions, obesity and
depression, employees are more likely to
be engaged at work and less susceptible
to instances of presenteeism or
absenteeism.
• Healthier employees are also less likely to
experience on-the-job injuries, thereby
reducing employee absences due to
hospitalization or disability.

38. WIN-WIN-SUCCESS!
• Happy employees help to support a company’s efforts to improve profitability and
competitiveness.
• Employers with effective health and productivity programs generate 20 percent
more revenue per employee and provide shareholders with a 57 percent greater
return than comparable companies.
• In a separate study, a stock portfolio of selected companies with exemplary health,
safety and environmental programs dramatically outperformed the S&P 500 index
over a 13 year period.
“The Link Between Workforce Health and Safety and the Health of the Bottom Line: Tracking Market Performance of Companies that Nurture a “Culture of Health,” R. Fabius, MD, et al, Journal of
Occupational and Environmental Medicine, Vol. 55, No. 9, September 2013. Web. 19 August 2015.
http://www.cancergoldstandard.org/sites/default/files/attachments/Link_Between_Workplace_Health_and_the_Bottom_Line_0.pdf.

39. THE BOTTOM LINE
• Employee presenteeism is difficult to quantify.
• It has and continues to be overlooked as a significant factor decreased productivity
and increased costs of employer-sponsored healthcare benefits.
• Employee health and safety often fail to adequately address the underlying root
causes of employee presenteeism.
• Companies that have taken an integrated approach to employee health and safety
have seen important reductions in the incidence of employee presenteeism and
absenteeism, as well as material increases in employee productivity.
These successes have resulted in healthier employees, improved financial
performance, and an increased competitive advantage against comparable
businesses.