“Presenteeism” might be a word that is unfamiliar to most business owners, but how those owners treat its symptoms could be the difference between a profit margin and a net loss. Over the course of a year, almost any business will experience cycles where higher rates of absence occur. Is there a way to lessen those cycles and increase productivity? Philadelphia is debating a bill for paid sick leave that makes the answer important.
The debate centers on whether businesses in Philadelphia should provide paid sick leave for employees. The City Council is considering an overide of the Mayor’s previous veto in the Council session scheduled on Thursday, September 15, 2011. Some businesses are arguing that the bill would add extraordinary costs to doing business in the city. Advocates say the bill would lower costs.
Older methods of calculating productivity are challenged as the Philadelphia City Council votes tomorrow.
It was long believed that businesses had to offset the cost of absenteeism by taking extraordinary measures, or building into cost analyses the added burden of maintaining a larger staff. Some companies built in temporary worker costs. Writing in the Fall 2003 issue of Workforce, Matt Lewis asserts:
“Three to 6 percent of any given workforce is absent every day due to unscheduled issues or disability claims … To compensate, most companies continually overstaff by 10 to 20 percent to mask lost productivity. That’s a colossal cost.”
And in some cases, this is true. A manufacturer with an assembly line can’t allow a position on it to be unfilled, or the entire process would come to a halt. But not every employer is a manufacturer, and not every employee is indispensable to daily operations. In some cases, an absent employee is an inconvenience, but other employees can cover that person’s duties, or those duties can be completed when the employee returns.
What is “presenteeism” and how is it changing the way productivity is measured?
If a worker shows up sick to work, several issues arise. A sick employee is less attentive and motivated. In a labor intensive setting, this can jeopardize the safety and health of that worker and those around him or her. In other settings, the employee is still likely to underperform. The worker also has the opportunity to spread his or her illness to other employees, causing a risk for more absenteeism.
“In fact, employers lose more money to presenteeism, than they do to providing paid sick days,” says Marianne Bellesorte, Senior Director of Policy for Pathways, PA. Bellesorte is arguing for the legislation in Philadelphia that will mandate employers to provide paid sick leave to employees. Her reasoning is that paid sick days won’t decrease productivity and will promote a healthier work environment.
The problem is complex, but solutions are available.
So how does the new math work out for business owners? Some studies now estimate that showing up sick for work costs businesses about $180 billion annually. On the other hand, staying home costs businesses about $118 billion each year. The evidence is trending toward letting sick people stay home.
And why should businesses pay for sick days? On the most basic level, it reduces stress in the workplace, which makes for a healthier environment. And if employers are going to face increased costs with paid sick leave legislation, they should receive some return on their investment.
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