Amy Hagopian: The cost of presenteeism to our businesses and economy

Testimony | January 30, 2006

Executive Summary

Testimony of Amy Hagopian, MHA, PhD

For Washington State HB 2777, SB 6592

I am a faculty member in the School of Public Health at the University of Washington, where I teach evaluation, policy, community development, and international health. I am not speaking for my institution.

In researching my testimony today, I learned that the term for coming to work while sick is “presenteeism,” a word not recognized by Microsoft spellcheck. It’s the phenomenon of workers being on the job but, because of illness or other medical conditions, not fully functioning. It’s in obvious contrast to “absenteeism.”

The people who have studied this problem the most (or at least published the most) are Swedish, Danish, Norwegian, Finnish and New Zealand scientists. It’s interesting that the risk factors for presenteeism in those countries are very different than here. The issues those researchers found to promote presenteeism in those countries included obligation to fellow workers, low replaceability, threat of unemployment, the needs of
small organizations, and the like. Lack of sick leave isn’t even an issue on the list of concerns, because it is a problem that doesn’t exist in those countries.

The Harvard Business Review (Oct 2004: 82(10) 49-58, 155: Hemp P) reported a little over a year ago that “presenteeism….costs U.S. companies over 150 billion dollars a year–much more than absenteeism does.” And they conclude that organizations may find that it pays to make targeted investments in employees’ health care–by covering the cost of allergy medication, for instance, or therapy for depression.”

Another study on the costs of presenteeism at Cornell University concluded that on-the job productivity losses attributed to presenteeism represent 61% of total costs associated with 10 selected health conditions. (Goetzel, et al. “Health, Absence, Disability and Presenteeism Cost Estimates of Certain Physical and Mental Health Conditions Affecting U.S. Employers. Journal of Occupational and Environmental Medicine, April 2004: 45(4), 398-412).

A study conducted by Merck & Company concluded that the effective workforce is probably decreased by 5 or 10% because of health problems, and that employers who increase their investments in health human capital now will emerge tomorrow as the companies leading the gains in U.S. productivity…


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Posted in Paid Sick Days