SOURCE: Kalorama Information

Kalorama Information

September 25, 2009 16:03 ET

"Presenteeism" Costing Employers More Than Absenteeism, According to Report

NEW YORK, NY--(Marketwire - September 25, 2009) - While employers may celebrate a low absenteeism rate among their employees, there may be a more serious problem if sick employees are coming to work. "Presenteeism," a new term coined for when employees work while unhealthy, may be even worse for employers and for the healthcare system, costing $160 billion annually in lost productivity, according to healthcare market research firm Kalorama Information, in its new report "The Market for Wellness Programs and Their Impact on Pharmaceutical, Diagnostic and Device Product Markets." The report also notes that presenteeism costs are one of many factors driving usage of wellness programs.

"Presenteeism is worse than a high absenteeism rate, for two reasons," said Bruce Carlson, Publisher of Kalorama Information. "Sick employees can spread contagious disease to other employees and multiply productivity loss. And they can make mistakes when they are not at the top of their game."

Indeed, Kalorama estimates that costs due to sick workers going to the office is more than double the cost of the 425 million sick days taken in 2008, an estimated $60 billion in lost productivity. The report notes multiple reasons that workers show up sick -- lack of time to see physicians, avoidance of copays and other medical costs, and loss of income. All of these are driving presenteeism. Also, in a time of economic recession, it is often the case that companies do not have back-ups for critical tasks and this contributes to the problem. Communicating sick day policies and cross-training employees can help to mitigate the trend.

"Employers are well-advised to tell employees not to come in if they are sick, and encourage the behavior with policies," said Carlson. "At least with a sick day, the costs stop there."

Due to this trend and rising healthcare costs, many employers have been engaging in 'wellness programs' for their employees. These programs may involve hands-on instruction in a class-like setting or they may be much less structured, involving occasional meetings with healthcare professionals. Commonly they are incentives to participate in third-party programs (gym/fitness memberships, online learning or coaching, etc.). In 2008, there were approximately 42 million workers in the U.S. who participated in some kind of corporate wellness program, and Kalorama expects this number to rise. Given that on average, most wellness programs save their sponsors about $3 for every $1 spent, it is expected that these programs will become ubiquitous soon.

For more information on the market for wellness programs, see Kalorama Information's new report "The Market for Wellness Programs and Their Impact on Pharmaceutical, Diagnostic and Device Product Markets" which is available at: http://www.kaloramainformation.com/redirect.asp?progid=76090&productid=2384194.

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