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 corporations, it’s the latter. So why do even savvy senior level 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 corporation 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 staff member, manager, supervisor and executive who’s ever tried to “tough it out” at work when he or she has been sick has been a presentee on those days.

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

In brief, unless we’re to believe that every employee is productive every single day, no company 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? Generally, 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 challenging (and even counterproductive) to attempt 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,  upper management worries endlessly about health benefit costs without realizing undetected presenteeism is just as expensive, but easier to control.

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

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

Add in employees 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’ve 50 staff members, who make an typical $40,000 a year. Over the course of the year, the typical worker is non-productive 2.5  percent of the time, due to assorted personal issues or minor illnesses that serve as distractions.

In this instance, presenteeism costs your organization $50,000 a year. If you’ve a 5 percent 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 usually works in three phases -

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

• get supervisors and staff members involved on the front end, and

• stress the importance of work-life programs to  upper-level 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 attempt to cut absenteeism often increase presenteeism -

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

2. Having supervisors check up on staff members 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 could  be to switch from separate vacation and sick-day benefits to a single compensated 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 when 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 advisor Mary Beth Chalk, because it can been done pretty easily.

Ask a sampling of workers to rate how energetic and productive they normally 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.