Absenteeism vs. Presenteeism: is it always the best option to go to work?
Authors: Daria Fagioli and Lisa Fontanella
Absenteeism refers to the habitual non-presence of an employee at his or her job, beyond what is considered an acceptable amount of days away from office for legitimate causes like occasional illness, family emergencies. Companies expect their employees to miss work each year for legitimate reasons, however, this becomes a problem for the company when their employees are absent for a repeated number of times and/ or unexpectedly, especially if they must be paid. Disability leave, jury duty obligations, and observance of religious holidays are all legally protected reasons to miss work, but some workers abuse these laws, creating an additional cost for the employer. Frequent causes of absenteeism include burnout, harassment, mental illness, and the need to take care of sick parents and children.
The contagious nature of the Covid-19 pandemic presented a new dimension to this matter, which is in some way opposite to absenteeism: presenteeism, which is common in most workplaces, even though it is not a often discussed topic. It refers to the lost productivity that occurs when employees are not fully functioning in the workplace because of an illness, injury, or other condition. Employees contributing to presenteeism are trying to give their best efforts but are physically or mentally unable to do so. Many workers fear losing their job or missing out on opportunities for career advancement if they take time off when they could still be working. As the employee is present and working, it is hard for employers to see the productivity decline as clearly as when an employee is absent from work. In the case of a physically sick employee with a contagious illness who shows up to work, there is a possibility that that employee’s illness will spread to other workers resulting in more presenteeism and absenteeism. This creates exponential costs for the employers, as many of the workers will get ill and the productivity will fall even more.
The absenteeism rate and frequency are key measures of organizational health and well-being: the absence rate indicates severity, while the absence frequency is about the absence pattern.
In general, older employees are more often ill compared to younger ones; however, research shows that they are much less likely to be absent in general. A survey from 2019 by Kunst found that around 58 percent of those aged 18 to 30 years took up to five sick days in the previous year.
Theoretically speaking, the potential for absenteeism emerges when individuals are obliged by the employer to supply a certain amount of labour within a given time period. Such constraints are common because employers are unlikely to be indifferent as to how much labour individuals supply. Workers will have an incentive to absent themselves if the level of contractual hours specified by the employer exceeds their desired hours. Whenever employers cannot monitor absenteeism and the workers collect sickness benefits during absence there is an incentive for the workers to shirk. For employees, it is likely that any earnings lost as a result of absence are, at least partially, offset by sick pay. This leads to the issue of risk of abuse of the benefits: more generous is the sickness benefit, the higher is the risk of absenteeism. The more the employer can monitor the behavior of workers though, the lower the risk. This is highlighted in the study conducted by Sconamiglio (2020) on the change in sick leave policy for all public-sector employees. Italy implemented stricter monitoring through random medical visits to absent workers, and reduced replacement rates — which altogether reduced sickness absenteeism.
Among civilian workers in the United States who did have access to paid sick leave, the most common form of provision is being offered a fixed number of paid sick leave days per year. The danger of only offering a fixed number of sick days is that sick employees will come to work even though they are sick. A survey from Statista found that 40 percent of adults in the U.S. stated they had gone to work when they were sick within the past year.
In the literature there is the tendency in theoretical models to ignore the state of the individual’s health. However, the subjectivity of one’s state of health adds an additional dimension to the problem, as the degree to which heterogeneous workers believe themselves to be unproductive due to a given level of sickness varies across individuals. In addition, different firms may retain different opinions regarding what constitutes an “acceptable” level of sickness. For these reasons, the role of general practitioners is of key importance in defining the legitimacy of an absence. The study on peer effects in absenteeism in Norway by Godøy, Dale-Olsen (2018) shows that individuals who move from one GP to another GP experience shifts in their absence rates that even spill over to colleagues with different GPs.
If it is easy to obtain sickness benefits, we observe two opposite effects:
- Reduced contagious presenteeism bringing a positive spillover effect on coworkers’ disease, as they will be prevented from possible contagion.
- Increased noncontagious absenteeism, which makes the benefit system more costly and causes otherwise avoidable losses in productivity.
Presenteeism appears to be a much costlier problem than absenteeism. The illnesses people take with them to work, even though entail far lower direct costs, usually account for a greater loss in productivity because they are so prevalent, so often go untreated, and typically occur during peak working years. Those indirect costs are usually invisible to employers: costs are two to three times more than direct medical care, which is paid for by companies in the form of insurance premiums or employee claims.
An important policy implication related to absenteeism is surely monitoring, because of asymmetric information against the employer about the severity of workers’ illnesses and the assessment of their recovery. This asymmetry creates room for incentives: if sick leave is well paid and poorly monitored, there is a greater chance for opportunistic behaviour. The contrary happens where sick leave is poorly paid and well monitored. This claim is supported by the D’Amuri’s (2017) study on Italy’s policy change in the cut on short sick leave spells and an extension of time interval for medical inspection from 4 to 11 hours for civil servants. The results show a decrease in absence and no before-after difference between private and public sector difference for family leave, that reinforces the first result.
Despite the shortcomings of current research tools, it is agreed upon that presenteeism represents a problem for employers: when people don’t feel good, they simply don’t do their best work and — even worse — can even be contagious for others.
Covid-19 has provided an opportunity for us to witness that from 1/4 to 1/3 of EU jobs can be done from home, and less than half does not expose the worker to any risk of infection (Boeri et al., 2020). Moreover, from employers’ point of view, their main concern is being held liable or accountable for infections that may originate on the job and face reputational and monetary costs.
Provided the possibility to do so, it is imperative for employers to address the issue by trying to reduce presenteeism. The first necessary step is to raise awareness of the problem, both among managers and employees. Moreover, employers may set up programs to ensure that illnesses aren’t going undiagnosed or being misdiagnosed. Knowing the particular health issues faced by employees would be beneficial for both firms and workers. Improving health education though is not a trivial task.
References
References
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