The Sickening Cost of Soldiering Through Illness

How many employees in your company come to work coughing, sneezing, and aching all over every day?

So-called “presenteeism,” or going to work when sick, is a persistent problem at more than half of Canadian and US workplaces. It costs US businesses a whopping $180 billion a year, according to research conducted by CCH, a Riverwoods, Illinois-based provider of business and corporate law information.

Like its more notorious counterpart “absenteeism,” it takes on growing importance as employers try to keep an eye on productivity and the bottom line, as this study shows.

“Employers are increasingly concerned about the threat that sick employees pose in the workplace,” says Brett Gorovsky, an analyst at CCH, a division of Wolters Kluwer.

“Presenteeism can take a very real hit on the bottom line, although it is often unrecognized,” he says.

CCH research indicates that 56% of human resource executives see presenteeism as a problem. That’s up from 39% making the same complaint two years ago.

Presenteeism costs employers in terms of lowered productivity, prolonged illness by sick workers, and the potential spread of illness to colleagues and customers, the report continues.

Presenteeism can prove elusive to measure, unlike absenteeism, says Cheryl Koopman, a professor of psychiatry and behavioural sciences at Stanford University and an expert on workplace stress and presenteeism.

“We all think we know somebody who’s made us sick, when that person is speaking into the same phone or touching your computer or even turning your doorknob,” she says, adding that she too is guilty.

“Cancelling a class because I have a cold just doesn’t seem justifiable,” she says. “I’ll keep my distance from the students, I’ll try not to cough at them, I think of how I’m going to do it without anybody getting sick.”

As often as two-thirds of the time, sick people go to work because they feel they have too much work to do, according to the CCH study.

The second-most common reason is workers believe no one else is available to cover their workload, states the study.

“With corporate downsizing creating a leaner workforce, employees often feel they have to show up for work, whether it’s out of guilt over staying home or concerns over job security,” Gorovsky says.

Of course, for plenty of people, going to work sick is not a choice, offers Cindia Cameron, organizing director for 9 to 5, an advocacy group that found 47% of the US private sector workforce has no paid sick leave.

Employers and health insurers are increasingly eyeing disease and health management programs as a means to ensure a healthier workforce. It is notable that some of the most encouraging campaigns to promote healthy lifestyles are spearheaded by US companies, where healthcare is largely private, not public, and costs to corporations and individuals can be many times the burden placed on Canadians.

Accordingly, some companies and private health plans are looking at a powerful motivator to entice their employees to participate: cash incentives.

“A robust incentive strategy, whether it offers cash, non-cash or a combination of the two, is critical to the success of any health management program,” says Michael Dermer, president and chief executive officer of IncentOne, a health and productivity incentive solutions provider.

And, according to a study by Price-WaterhouseCoopers, 84% of large company CEOs view incentives as the most promising tool to drive health care cost reductions.

IBM has paid out $130 million in wellness incentives, an investment in its workforce the company says it expects to pay off as it encourages employees to participate in walking teams or play basketball during their lunch breaks.

Other companies are offering a free smoking cessation class, a cholesterol test, or a regular trip on the treadmill–from all of which an employee can accrue points toward a company-funded shopping spree. Or maybe even a trip.

Nearly half of major US employers offer healthy living incentives to their employees.

“Data from clinical studies shows that healthier employee behaviour pays off for employers in the form of decreased private health care costs, improved productivity and reduced absenteeism,” Dermer says. “The key is to develop a properly designed incentive program that recognizes the role of disease prevention and health management, and aligns rewards with an individual’s desire to achieve health improvements in a positive way.”

All this leads to a more positive bottom line. According to the US Department of Health and Human Services, wellness programs have a median return on investment of more than $3 for each $1 spent.

And the impact of a healthy workplace can benefit your bottom line, regardless of which side of the border it is located on.

Mark Borkowski is president of Toronto-based Mercantile Mergers & Acquisitions Corporation. Mercantile specializes in the sale of privately owned companies to strategic buyers. He can be contacted at mark@mercantilema.com or (416) 368-8466 ext. 232