There’s a new sheriff in town whose name is “presenteeism.” If you haven’t heard of this new buzzword, now is the time to learn how much presenteeism affects your employees and your company’s bottom line. Hint: it’s in the billions across the US economy!
What is Presenteeism?
Presenteeism occurs when employees who are not fully functioning in the workplace because of an illness, injury or other condition. Even though the employee is physically at work, they may not be able to fully perform their duties and is more likely to make mistakes on the job.
What “Symptoms” Drive Presenteeism?
There are many quick examples of presenteeism that come to mind, such as being physically sick or under the weather. You show up to work with a runny nose, cough, or slight fever hoping to push through the day. But you (and everyone else around you) are less productive and off-task trying to find the box of tissues or bottle of hand sanitizer. This reduced ability to perform your job role is presenteeism in a nutshell.
Similarly, employees that have to drive a forklift, be on their feet most of the day, or do other manual labor will experience presenteeism if they show up to work with a knee injury or back issues. As the economy has increasingly become computer-based, the rates of Carpel Tunnel Syndrome have increased dramatically.
Presenteeism Isn’t Just Physical, It’s Mental
Not all presenteeism is due solely to physical “symptoms” as described above. A large share of presenteeism is driven by mental factors and stressors, such as workplace culture, personal relationships, mental wellness, and (as we have come to observe and quantify with years worth of data) financial stress and concerns. It turns out, that financial stress is the single largest source of stress that employees face in their lives.
It’s such a large concern that financial stress itself is a larger concern for employees than all other sources of stress combined.
How Much Financial Stress and Concerns Drive Presenteeism
The reality in the United States is that most employees (76%) are living paycheck to paycheck regardless of income or salary, most are financially stressed (85%), and most don’t have $1,000 in savings to cover a basic emergency expense like a flat tire (62%). The financial stress and concerns employees have don’t stay at home each day and wait patiently until people get home after work. Financial stress tags along throughout the day and accompanies your employees to team meetings, is ever-present as they check emails, and even follows them around as they work on their projects and deliverables. It doesn’t leave them alone, and unlike like a physical malady that can remedied in physical therapy or subdued with antibiotics, financial stress lingers around for months, years, and even decades.
We survey our users and ask them a very simple question...
How many times per month do you spend dealing with your personal finances at work? The results are tough to hear, but not surprising. Employees report that they spend more than 10 times per month distracted and dealing with personal finances while on the job! While there are 30 days in a month, there are usually only 20 working days a month on a Monday to Friday schedule. That means your employees are experiencing presenteeism at least every other day due to financial issues and concerns that distract them from work, and make them less productive by being off-task.
Presenteeism actions may be a harmless quick check of a bank account balance or making a payment on a credit card or other bill. But it is also more time-consuming and stressful as employees are trying to make ends meet, balance budgets, figure out how to pay for child care, or working on sorting through a maze of student loan paperwork.
Our same survey data finds that 36% of employees experience presenteeism due to financial stress every single day at work. This tells us that financial stress is not only a perpetual concern of employees that drives up presenteeism, but it’s also an area of people’s lives that is “ever-present” and “top of mind.”
Adding It Up: The Cost of Presenteeism Due to Financial Stress
Knowing that employees experience 10 instances a month of presenteeism due to financial stress, we can estimate how much it is costing your company each year. First, let’s assume each instance of checking your finances at work is about 10 minutes (a call to pay a bill, checking a budget, changing a 401k investment allocation, etc.), and the average salary at your workplace is $50,000.
That’s 100 minutes of presenteeism each month, which is 1,200 minutes of presenteeism per year. Equivalently, that’s a whopping 20 hours of lost productivity each year per employee due to financial stress!
An average work year is 2,000 hours, so if your average salary is $50,000, that’s a $25 per hour earnings rate.
Consequently, losing 20 hours is equivalent to losing $500 per employee per year. That may or may not be a jarring number, but assuming you have 100 employees at your company, that’s $50,000 in lost productivity. Essentially, that’s like paying a full-time person who doesn’t even exist!
If you are slightly larger with 250 employees, that’s $125,000 in loss due to presenteeism being caused by financial stress.
A 1,000 employee company would lose $500,000 each year. That’s a significant cost center lurking beneath the surface.
Financial Stress and Presenteeism Are Solvable
While we can’t fix your employees’ back pain or runny noses, we can reduce their financial stress and help them lower the amount of time they spend at work dealing with their finances; 92% of employees that have access to Holberg Financial report that they reduce the amount of time at work spent dealing with personal finances, and a full 64% report reduced financial stress levels.
These positive changes are driving up employee confidence and productivity. By reducing financial stress, you are empowering your employees to be as financially healthy as possible, and 97% of employees are willing to stay longer at companies that offer Holberg Financial, which is driving up retention. Furthermore, this supports a work atmosphere where employees are more focused, present, and less likely to experience presenteeism due to financial stress or concerns.
As we move deeper into a competitive landscape for benefits, it’s clear that presenteeism itself and the cost to your employees and company are significant. And while financial stress is mounting for millions of people, it doesn’t have to left unsolved. Effective financial wellness programs can reduce stress, empower your employees, and reduce costs for employers. The best part is that it’s the right type of benefit to offer since so many employees are asking (and many times begging) for financial guidance and support.