Presenteeism.

Which costs your organization more -  staff members who miss work or ones who show up physically but take a mental PTO day?

For most businesss, it’s the latter. So why do even savvy senior managers and finance directors (we’re not just talking about the bean-counters) worry about absenteeism while downplaying so-called presenteeism as a drain on company productivity, not to mention the compensation and benefits budget?

In some cases, C-levels and supervisors seem to think that admitting that presenteeism even exists at the firm is akin to saying, “We’re a poorly run organization.” In reality, presenteeism exists in every workplace.

Virtually every employee, manager, supervisor and executive who has ever tried to “tough it out” at work when he or she has been sick has been a presentee on those days.

So has whoever who’s ever been distracted at work by non-work issues - whether it’s spending the day attempting to resolve an individual financial matter, checking on a sick child at home or constantly checking for scoring updates from a sporting event.

In short, unless we’re to believe that every worker is productive every single day, no business in the world is immune from presenteeism.

Some organizations that don’t bury their heads in the sand about presenteeism still don’t track it. Why? Normally, there’s a belief that chronic presentees eventually get rooted out of the company.

And short of watching over every other employee’s shoulder throughout the workday, it’s too difficult (and even counterproductive) to try to estimate the cost to the organization.

Here are some strategies that firms have used to not only measure the cost but also reduce the problem.

Creating a cost estimate

If your organization is like most,  executive management worries endlessly about health benefit costs without realizing undetected presenteeism is just as costly, but easier to control.

Consider these facts from a recent CSG study -  Nearly 10% of the average annually pay and benefits

budget is spent on non-productive (but treatable) workers.

Add in staff members who call out at the last second and the percentage rises to 17 percent, as reported by SHRM.

But how do you estimate the actual dollars-and-cents cost to your firm?

Let’s assume you have 50 staff members, who make an average $40,000 a year. Over the in the year, the average worker is non-productive 2.5  percent of the time, due to assorted personal issues or minor diseases that serve as distractions.

In this instance, presenteeism costs your organization $50,000 a year. When you’ve a 5% presenteeism rate, the figure shoots up to $100,000.

While it’s impossible to entirely stamp out presenteeism, even small reductions in presenteeism add up to big bucks in controlling compensation and benefit costs.

The next step, of course, is doing something about the issue. Broadly speaking, the process generally works in three phases -

• review current policies and procedures for things that accidentally increase presenteeism

• get supervisors and workers involved on the front end, and

• stress the importance of work-life programs to  upper management and supervisors.

Let’s look at each area to see how they work in real-life practice.

Unintentional effects

Three common ways many firms try to cut absenteeism often increase presenteeism -

1. Over-stressing attendance in employee’s annual reviews

2. Having supervisors check up on workers who take sick days to verify they’re really ill, and/or

3. Disciplining workers for last-moment sick callouts.

From a practical and cost standpoint, the best solution may  be to switch from separate vacation and sick-day benefits to a single paid time off (PTO) bank.

When folks have no-questions-asked control over their off days, they’re sometimes more likely to use a PTO day if they’re sick.  Of course, you know that PTO carries some risks of its own.

Early detection

Fewer than one organization in 10 gets both managers and staff members involved in the process of spotting and eliminating presenteeism.

That’s too bad, says consultant Mary Beth Chalk, because it can been done pretty easily.

Ask a sampling of workers to rate how energetic and productive they usually feel at work, on a percentage scale. Have supervisors estimate their staff as well. Then split the difference.

The result is a pretty good barometer of your organization’s current and future presenteeism risk.

Work-life balance

Anything you are able to do to promote work-life programs at your firm can have a positive effect on the bottom line. Proven ideas include -

• rewarding supervisors who support flexible work arrangements

• sending sick staff members home

• cover on-site flu shots, and

• actively promote your existing Worker Assistance Program.