If you’re a manager, you want productive employees. Yet you’re probably blind to one of the most serious drains on their productivity – the aches and pains, both physical and emotional, that people bring with them to work. You’re probably also unaware of something even more surprising. The cost of health-related productivity loss may actually exceed the astronomical sums that your company currently spends on employee health care.

I’m reminded of these startling facts as we bid farewell to the flu season and usher in the time of hay fever. Last fall, many employers offered workers subsidized flu shots with the aim of minimizing the cost of people being out sick. Few companies subsidize employee purchases of Claritin and other over-the-counter allergy medications. Why?

They don’t because hay fever, unlike the flu, typically doesn’t prevent people from coming to work. This distinction between ailments that contribute to absenteeism and those that don’t is misleading. It ignores a growing body of research indicating that companies’ greatest health care expense is the decline in on-the-job performance that results from workers’ chronic and often relatively minor health issues.

This phenomenon, known as presenteeism, costs companies way more in lost productivity – 10 times as much, by some estimates – than absenteeism does. (Note that it doesn’t follow, at least from a productivity point of view, that workers should therefore stay at home rather than go to work when they have the sniffles, as numerous articles reporting on the topic have mistakenly asserted.) Furthermore, presenteeism’s costs appear to be significantly higher than companies’ direct spending on employee health care – more than twice the amount, according to an analysis Bank One did of its own medical costs.

All kinds of chronic medical conditions – from diabetes to migraines to back pain – can keep people from doing their best work. They can make it difficult to

• perform certain physical tasks
• concentrate for extended periods
• simply get up to speed at the beginning of the work day.

Depression appears to be the biggest cause of presenteeism, because (as my colleague Diane Coutu recently pointed out in this space) it is so widespread and because it can so profoundly hinder performance if untreated. But studies show that less severe ailments like seasonal allergies – in part because they’re so common – can in the aggregate cost companies millions of dollars in lost productivity.

Several years ago, I wrote an article in Harvard Business Review that introduced the concept of presenteeism to a broad business audience. Since then, researchers have

• improved the tools by which you can measure health-related productivity loss
• calculated the productivity return on certain investments in employee health – say, providing workers with free asthma drugs
• found that changes in employees’ health risk factors – for example, adopting or abandoning an exercise regime – can affect productivity for better or worse.

It’s time for executive hand-wringing about skyrocketing health care costs to be accompanied by an examination of how to reduce this potentially greater indirect cost. Targeted investments in worker health could more than pay for themselves in improved productivity – while offering the not-so-trivial additional benefit of improving employees’ quality of life.