Presenteeism: The Hidden Productivity Drain Employers Can't Afford to Ignore

Lanham Media on behalf of Rehab Management

Media release

Presenteeism: The Hidden Productivity Drain Employers Can’t Afford to Ignore

Employees turning up to work while unwell may be costing Australian businesses more than those who stay home.

Presenteeism—when employees are physically at work but not fully functioning due to illness, injury, or mental health challenges – remains a significant yet often overlooked drain on workplace productivity. It’s been estimated to be up to 10 times more costly than absenteeism¹, with some reports putting the total impact at over $34 billion annually². Mental health-related presenteeism alone costs Australian employers approximately $8.5 billion per year³.

“People generally want to do the right thing, but without the right support, returning too soon can impact both performance and wellbeing,” says Renee Thornton, occupational therapist and CEO of Rehab Management, a national workplace rehabilitation provider. “We see it time and again: presenteeism often leads to disengagement, re-injury or longer absences down the track.”

Michelle Barratt, Head of Innovation and Psychology Services at Rehab Management, emphasises that presenteeism can negatively interact with work environments that have high job demand/low control or a perceived effort-reward imbalance. “Workplaces that have longer hours, unpredictable shift work, and job insecurity can add fuel to the fire when it comes to employee’s experiencing presenteeism” says Barratt.

“Managing your organisation’s psychosocial risks is a requirement, but the added benefit in taking action is that by creating a mentally healthy workplace, you are fostering an optimal work environment for the health and wellbeing for your people” says Barratt.

Research shows that presenteeism is closely linked to low psychosocial safety climate (PSC)—work environments where employees don’t feel psychologically supported. Workers in low PSC workplaces take 43% more sick days and experience 72% higher performance loss, costing employers an average of $1,887 per employee each year⁴.

Thornton says presenteeism often goes unnoticed until it becomes a visible performance issue or results in a workers compensation claim.

“By the time someone is clearly struggling, it’s already late in the game. Acting early—before things escalate—makes all the difference.”

Presenteeism is also increasingly tied to outdated workplace norms—such as measuring productivity by visibility instead of outcomes. Data shows that 45% of managers identify keeping their teams motivated as their biggest productivity challenge, while 9 in 10 workers say feeling happy and engaged is the key driver of their productivity⁵.

“We’re seeing a shift,” Thornton says. “The most effective workplaces are moving away from performance that’s measured by how long someone sits at a desk, and towards a culture of psychological safety and recovery-focused reintegration.”

Rehab Management partners with employers across Australia to identify early warning signs and deliver proactive support through services such as fitness-for-duty assessments, confidential employee health checks, and health coaching. These interventions not only support individual recovery but also help reduce claims, lift morale, and foster a more sustainable workplace culture.

“Presenteeism is preventable. The businesses doing this well are those that act early, stay curious, and see recovery as a shared responsibility—not something the employee has to figure out alone. When people feel supported to return properly—not just quickly—you create a safer, more productive workplace for everyone.”

Ways employers can reduce the impact of presenteeism:

• Notice the subtle signs – Fatigue, withdrawal, repeated short absences or reduced engagement may be early indicators.
• Normalise early conversations – Give leaders the confidence and permission to ask “Are you really OK to be back?” and “How can we best support you?”
• Use health checks and wellbeing screens – Anonymous workforce-level data can help identify emerging risks before they affect productivity. CheckInToday is a proactive mental wellbeing survey sent periodically to teams to allow them to self-survey and seek early support.
• Invest in coaching and training – Tailored support for individuals and practical wellbeing education for teams can boost engagement and resilience. Senda Psychology EAP offers tailored health coaching and education opportunities – all focused on empowering individuals and workplaces.
• Manage workplace psychosocial hazards and risks – Identify and take action to mitigate and manage psychosocial risks in your organisation. PeopleCompass includes an anonymous employee survey and report that allows you to flag psychosocial risks and address these through tailored supports.

Rehab Management assists businesses with all of these tools and more, helping employers take a proactive, prevention-first approach to workplace health. For more information, visit www.rehabmanagement.com.au.

Media Assets available here

Media contacts:

Greg Townley | [email protected] | 0414 195 908

Fleur Townley | [email protected] | 0405 278 758

About Rehab Management

Rehab Management is an award-winning, nationally accredited and industry-leading occupational rehabilitation and corporate health services provider. Our multidisciplinary team delivers a wide range of client-centric, tailored services to people with injury, illness or disability and integrated rehabilitation and workplace health solutions. For over 27 years, we have worked with some of Australia’s largest organisations, including multi-national corporates, insurers, government departments and agencies. For more information visit: www.rehabmanagement.com.au

References:

¹ EHS Today, “Presenteeism Costs Business 10 Times More Than Absenteeism.”
² ABC News, “Presenteeism costing the economy billions,” April 2016.
³ HRM Online, “Poor mental health is costing employers over $900 million per day,” 2024.
⁴ Safe Work Australia, Psychosocial Safety Climate and Better Productivity in Australian Workplaces, 2016.
⁵ Slack, State of Work Report: Australia, 2023 (via Australian Financial Review summary).