Topic Outsourcing HR / PEO,

Defeating Presenteeism with a PEO

Defeating Presenteeism with a PEO

The impact of absenteeism is a common concern among business owners and company leaders. However, many dont realize that the consequences of employees showing up to work when theyre unwell could be even worse. Its estimated that presenteeism costs the U.S. economy $150 billion in lost productivity annually.  

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Presenteeism occurs when an employee goes to work despite physical or psychological conditions that will prevent them from fully functioning at work. A 2019 report revealed that as many as 90% of workers go to work when they’re not feeling well. Reasons for showing up include too much work to do (54%), not wanting to use a sick day (40%), and feeling pressure from their employer (34%). Some employees aren’t eligible for paid sick leave, and can’t afford to take time off from work.  

This might not seem like a huge concern when many illnesses only last a few days. However, research shows that coming to work sick can prolong recovery and contribute to employee burnout. 

So how can employers mitigate the effects of presenteeism? One of the most efficient ways to remedy presenteeism is to work with a professional employer organization (PEO) 

What is a PEO? 

A professional employer organization (PEO) is an outsourced HR solution that provides businesses with services ranging from HR technologies and payroll administration to employee benefits and access to a team of HR professionals. A company may outsource most or only some HR services to their PEO.  

By outsourcing HR duties that are time-consuming and prone to errors, you can free up your internal HR staff to focus on high-value contributions that benefit employees. A PEO offers many benefits for both employers and employees, including: 

  • Reduction of administrative burdens 
  • Access to better employee benefits 
  • Policies and procedures to reduce safety risks 
  • Consolidated software for streamlined workflows 
  • Improved compliance 
  • Reduced cost of workers’ compensation 
  • Improved recruitment and retainment 

5 Ways PEOs Reduce Presenteeism 

It’s pretty easy to see how outsourced HR can help a company cut costs and reduce HR staff workload. Still, you may wonder how these services connect directly to employee productivity. A PEO can provide your organization with a comprehensive group of resources that improves the employee experience and addresses the root causes behind presenteeism. 


1. Comprehensive Benefits Package

Unlike quiet quitting, presenteeism directly relates to decreased productivity due to injury, illness, or stress. One in five uninsured adults in 2021 went without needed medical care due to cost. When limited insurance coverage acts as a barrier to healthcare, employees are less likely to receive preventive care and services for major health conditions and chronic diseases.  

A PEO can address these issues by putting your business on its master healthcare plan. Small to medium businesses (SMBs) have a higher risk profile, making it more difficult for these companies to obtain affordable insurance. When you partner with a PEO you get access to a health plan shared by employees from all the businesses the PEO works with. As a result, your business represents a lower level of risk and can affordably obtain a better health benefits package. 

2. HR Expertise and Support

Hundreds of blogs claim to know how to best deal with presenteeism. Unfortunately, many of these articles are based on speculation. Adopting these methods in a trial-and-error fashion can result in poor investments and lost time without improvement. 

Partnering with a PEO gives you access to HR specialists' expertise. These experts have seen what does and doesn’t work and can pass that knowledge on to you. Your PEO can help you implement best practices with a history of success in reducing presenteeism.  

3. Employee Assistance Programs (EAPs)

Studies show that 1 in 5 adults in the U.S. and Canada struggle with mental health, and 80% of U.S. workers feel stressed. Psychological health issues are the second leading cause of absenteeism and presenteeism. Yet, these concerns typically go unaddressed by traditional healthcare plans.  

An employee assistance program (EAP) is an employer-provided program that provides employees and their families with resources to help them overcome work, family, financial matters, legal matters, and other challenges. When your company partners with a PEO, employees can begin receiving EAP services at once. By skipping a lengthy application process, employees get quicker access to services that can help them overcome issues that cause presenteeism.  

4. Wellness Programs

The connection between physical fitness, reduced stress, and improved long-term health has long been established. Yet, long commutes and sedentary job roles can make it difficult for employees to maintain a healthy lifestyle. Employee wellness programs provide a healthy work-life balance by offering employees resources and initiatives for physical fitness and stress management. Yet, such benefits aren’t included in traditional health benefits plans. 

To initiate wellness programs, company leaders and HR professionals must take on additional administrative burdens to research and roll out these added benefits. A PEO already has connections to successful wellness programs and can help you set up a program that matches your employees’ needs.  

5. Organizational Culture

A PEO offers HR expertise, processes payroll, manages insurance programs, and administers employee benefits. When HR’s administrative burdens are passed to the PEO, HR has time to focus on creating a positive, unified organizational culture.  

When HR employees are freed up from administrative tasks, they can work on developing solutions that improve employee culture. This can include enhancing onboarding and training and implementing rewards programs and other solutions to improve the employee experience.  

A Healthier, More Engaged Workforce 

Presenteeism is a severe burden for both employers and employees. It leads to the loss of thousands of dollars each year due to lost productivity and contributes to employee burnout.  

Many businesses don’t have the resources to address the causes of presenteeism. When you partner with a PEO, you get instant access to resources to help you eliminate presenteeism in your organization. These resources can help you develop a healthier, more engaged workforce. 

The result? Improved productivity which leads to increased profitability.

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Please note that the information presented above is not intended to be specific, technical, or professional advice. Our aim is to educate and provide insight into relevant topics.