Pension Risk Matters

Flu Economics For Companies

If you escaped the flu bug this year, congratulations and best wishes for not getting sick in the next few months. Unfortunately, I was not as lucky. After five tough days of sneezing, coughing and aching, and despite getting a flu shot, I am finally feeling better. I still don't know the culprit other than possibly riding a crowded train last week. Why visibly sick passengers were out and about was a mystery to me until I read "Sniffling, Sneezing and Turning Cubicles Into Sick Bays" by Michael Mason (New York Times, December 26, 2006). He explains that the tendency for employees to show up at work has to do with economics.Some companies do not offer sick pay and days missed translate into a smaller paycheck. In other cases, people tell survey-takers that they feel pressured to show up and fear possible suspension or being fired if they miss work. When companies offer PTO or personal time off, workers may opt to punch the time clock rather than give up days that could instead be spent on vacation. Some companies may not have a telecommuting policy or technology that supports work at home. Other times, individuals may feel that missing work will put them further behind, especially if their firm has downsized and asked those who remain behind to make up the difference.

In what has become known as "presenteeism," the act of attending work while sick has drawn attention from benefits professionals and researchers alike. Companies that scale back benefits may do so to cushion the bottom line but end up losing money. This is because workers who show up sick often underperform while on the job and then infect others around them who in turn get sick and underperform. According to "Unhealthy U.S. Workers' Absenteeism Costs $153 Billion" by Dan Witters and Sangeeta Agrawal (, October 17, 2011), the cost in lost productivity "would increase it if included presenteeism, which is when employees go to work but are less productive in their jobs because of poor health or wellbeing."

Occupational psychologist and founder of a website about work-related behavioral issues, Rebecca Quereshi writes that the topic is viewed differently across countries. She asserts that the UK and European study the "precursors of presenteeism" or why people are compelled to show up to work when they are sick. In contrast, the U.S. focus is on the productivity loss attributable to presenteeism. She adds that "There is widespread agreement that presenteeism accounts for more aggregate productivity loss than absenteeism," in large part because it is "much less accounted for." See "Presenteeism in the workplace, reviewed" (January 19, 2011).

In other articles read by this blogger on the topic of healthcare and the bottom line, the point was made that those who make higher incomes may be more inclined to show up at the office when feeling less than robust. Perhaps that is true but what is known for sure is that bad health impacts the bottom line. According to its September 12, 2012 press release, a study conducted by the Integrated Benefits Institute cites absenteeism and presenteeism as contributors to a loss of $227 billion to the U.S. economy.

As companies grapple with new health care rules and regulations and the challenges of a fragile global economy that keeps everyone on a tight budget, individuals are best served by going on the offensive in terms of trying to avoid a cold or the flu. Chicken soup anyone?

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