Author: Tara Raj

Presenteeism is the situation wherein employees show up to work even if they’re sick or unwell, feel pressured to prove commitment and end up operating well below their potential. Although presenteeism doesn’t show up on a leave report, unlike absenteeism, it is estimated to cost Australian businesses around a whopping $34 billion a year. We believe that it’s more a leadership and culture issue rather than an individual one. The right leadership training and behaviour change at the top can solve it.

“Presenteeism is when employees come to work while sick, unwell or under a preconceived notion of commitment and operate below their normal capacity”.

Unlike absenteeism, presenteeism does not appear on a leave report or a headcount dashboard because the person is logged in, sitting in meetings, and even hitting deadlines on paper. However, the desired output isn’t there. For senior leaders focused on productivity and cost control, presenteeism is an expensive problem that does not show up on the reports.  

Presenteeism is not always due to an individual’s failures. Organisations unknowingly are known to implicitly reward those who are “always available,” and it becomes a marker of one’s commitment to work. With technological growth, access to emails and information is not restricted to the physical workplace and replying to enquiries and requests outside work hours is commonplace – regardless of what the well-being policy says on paper. This, in due time, leads to burnout, increased stress and even cognitive dissonance in individuals.

This is where the gap sometimes lies – The policy exists, but the behaviour modelled by leadership tells a different story. Middle managers take their cues from what they see senior leaders do and not just what is written in the handbook. Equipping leaders to have open and honest conversations will help them identify and prevent the loss of valuable team members. That’s exactly what our Leadership & Management training courses focus on.

What Causes Presenteeism in the Workplace?

As mentioned above, presenteeism is usually driven by a combination of workplace culture, policy and personal financial pressure. The most common causes include:

Cause	Why It Happens
High engagement and loyalty	Committed employees don’t want to let the team down, even when unwell
Fear of judgement or discrimination	Past criticism for taking sick leave discourages future leave requests
Heavy workloads and understaffing	No one to cover the work, so employees feel they can’t step away
Financial pressure and job insecurity	Limited paid sick leave or casual work makes staying home feel risky
Strict absence policies	Requiring medical certificates or disciplinary action for sick days pushes people to work through illness instead

What Presenteeism Costs Australian Businesses

Presenteeism is estimated to cost the Australian economy approximately $34 billion per year, according to a report prepared for Pathology Awareness Australia (PAA) on the use of health resources [1].

At an organisational level, that figure translates into lost output, elevated error rates, higher turnover, rising compensation and healthcare costs. Most of which sit outside standard productivity reporting until leadership knows to look for them.

For businesses already managing compensation premiums and absence-related costs, presenteeism represents a comparable and often larger, hidden line item.

• Beyond Blue’s survey found workers aged 18-29 experience the highest rates of burnout. [2]
• The Robert Half data showed over 85% of Gen Z workers experiencing burnout, compared with 81% of Millennials and Gen Xers, and just over 70% of Baby Boomers. [3].
• Beyond Blue’s survey found workers aged 18-29 experience the highest rates of burnout. [2]
• The Robert Half data showed over 85% of Gen Z workers experiencing burnout, compared with 81% of Millennials and Gen Xers, and just over 70% of Baby Boomers. [3]

The Organisational Cost of Presenteeism

Left unaddressed, presenteeism compounds across several fronts that matter to the business and not just the individual. Some of them are as below

• Lost productivity  
• Reduced team cohesion  
• Accidents
• Job insecurity/turnover
• Worsening health
• Longer recovery periods

There is also a mental health dimension worth flagging at the leadership level. Employees under psychological strain are statistically more likely to push through and attend work than to request leave, largely due to stigma. That means a visible rise in presenteeism can be an early indicator of deeper well-being issues across a team, well before it surfaces as a formal grievance, an exit interview or a workers’ compensation claim.

Where does leadership intervention make the difference

Because presenteeism doesn’t appear in standard reporting, addressing it starts with leadership visibility and behaviour and not policy alone. The interventions that move the needle most are:

1. Set the tone from the top. Sick leave needs to be visibly normalised by senior leaders, not just permitted in policy.
2. Audit workload distribution. Chronic understaffing and unrealistic deadlines are two of the most direct drivers of presenteeism and two of the most controllable.
3. Equip managers to recognise the signs. Presenteeism typically presents as reduced engagement, more errors or an energy shift. The key sometimes lies in recognising the discomfort in team members for what it is – A sign that Something Matters
4. Build psychological safety at every reporting level. Employees need confidence that raising a wellbeing concern won’t be read as a performance issue. 

While we recommend these interventions, none works as a one-off memo. Any action you choose to take will require leaders who’ve actually developed the skill of having these conversations. This is the gap CTO’s Leadership & Management training is designed to close.  

Equip your leaders to address this before it shows up on the balance sheet!

Presenteeism is a leadership and culture challenge, which means it’s a solvable one, but it requires leaders across your organisation who are equipped to recognise it and act on it early. Organisations that invest in this capability consistently see the flow-on effect in engagement, retention and productivity, well beyond the immediate cost of presenteeism itself.

CTO’s Leadership & Management training programs are built to give your leadership team the practical tools and confidence to manage this proactively, tailored to your organisation’s specific context, not delivered off the shelf.

Frequently Asked Questions

What is the difference between presenteeism and absenteeism?

Absenteeism is when an employee is away from work. Presenteeism is when an employee attends work while unwell and operates below their normal capacity. Presenteeism is harder for organisations to track because it doesn’t appear on leave reports.

What are the main causes of presenteeism?

The main causes are heavy workloads and understaffing, fear of judgement for taking sick leave, financial pressure and job insecurity, rigid absence management policies, and high personal engagement or loyalty to the organisation.

How much does presenteeism cost the Australian economy?

A report prepared for Pathology Awareness Australia estimated the cost of presenteeism to the Australian economy at approximately $34 billion per year.

How can leadership teams reduce presenteeism across an organisation?

Leadership teams can reduce presenteeism by visibly normalising sick leave from the top down, auditing workload distribution, training managers to recognise early signs of burnout, and building psychological safety at every reporting level.

How can employers spot presenteeism in remote or hybrid teams?

Leading virtual teams is a tough job. Spotting presenteeism remotely can actually be harder, as there’s no visible sign of someone struggling at their desk. However, employers should wisely watch for some clear indicators, such as a drop in output quality, longer hours logged without matching results, or delayed responses. When a team member is consistently attending meetings while visibly disengaged, it’s a sign of presenteeism. Regular but genuine check-ins from a trained manager can be one of the most reliable ways to catch it early.

Does returning to the office increase or reduce presenteeism?

Neither. Setting something automatically never fixes issues like presenteeism, as the behaviour follows workplace culture rather than physical location. While office-based teams may feel more visible pressure to “be seen,” remote teams may feel pressure to appear constantly online. In both cases, leadership is the deciding factor. It’s whether leadership actively models healthy boundaries and workload expectations.

Is presenteeism covered under workplace health and safety obligations in Australia?

Presenteeism isn’t a specific legal category. However, the underlying risks it creates certainly fall within an employer’s broader work health and safety responsibilities. The risks include burnout, fatigue-related errors, and psychological harm. This is one reason many Australian organisations are shifting focus from compliance-only well-being policies toward genuine leadership behaviour change.

From ‘Good at the Job’ to ‘Good at Leading People’: The Hardest Transition in Any Career

Being an individual contributor and being a team leader are two different things. Moving from the former to the latter is one of the biggest and probably the most challenging career transitions professionals face. Our leadership expert discusses why first-time managers often struggle, what are the leadership skills they need to succeed and how practical leadership training helps organisations build confident, capable leaders.

Are you stepping into your first leadership role? Supporting newly promoted supervisors? Or planning leadership development across your organisation, understanding this transition is essential?

Whatever the reason may be, leadership and management training remains one of the most valuable investments by organisations when it comes to developing high-performing teams.

Success is no longer measured by your own performance. Instead, it’s measured by how effectively you help your people perform, how efficiently you manage your team, how well you maintain communication within the team and much more. Often, this shift catches many first-time managers by surprise.

Why being an expert at your job doesn’t automatically make you a great leader

Being promoted is exciting. For many professionals, promotion feels like the natural reward for years of hard work. It certainly is. But that’s not how people become leaders. Leading people is a different ballgame altogether.

You’ve built technical expertise, built trust across the team, delivered results consistently and become someone your organisation can count on. Then comes that opportunity you’ve been eyeing at – leading a team.

It’s an exciting milestone and one of the most challenging transitions in your career at the same time. The reason is simple. Organisations often promote employees because they excel at their work. However, most of them fail to realise that leadership is something that requires a completely different set of skills.

Technical expertise and leadership capability are closely connected, but they are not the same thing. High performers are promoted because they consistently deliver results. They solve problems, meet deadlines and become trusted experts in their field.

Leadership changes the job completely. Instead of focusing primarily on your own work, your responsibilities will now include

• Building trust within the team
• Setting clear expectations
• Delegating effectively
• Coaching employees to grow
• Managing performance
• Communicating through change
• Having constructive and at times, difficult conversations

These are people skills, not technical skills.

While many professionals have never received formal leadership development before their promotion, they’re suddenly expected to lead with confidence from day one. This is where structured programs such as Learning to Lead, Communication Skills for Leaders, and Excelling as a Leader/Supervisor can make a meaningful difference by helping new managers develop practical leadership skills before challenges become habits.

The biggest shift isn’t learning new skills – it’s changing your mindset

One of the hardest parts of becoming a leader isn’t learning what to do. It’s learning what to stop doing. Many first-time managers continue behaving like their highest-performing individual contributor because that’s what has always brought success.

Some common examples include

• Taking work back because it’s quicker to do it themselves.
• Solving every problem instead of coaching team members to find solutions.
• Avoiding performance conversations because they feel uncomfortable.
• Feeling responsible for having every answer.
• Measuring success by personal productivity instead of team performance.

These behaviours are understandable. They’re also one of the biggest reasons new leaders become overwhelmed.

Effective leadership isn’t about becoming the smartest person in the room. It’s about creating an environment where everyone else can contribute, grow and succeed.

That requires a different mindset, supported by practical skills such as delegation, coaching, active listening, emotional intelligence and performance management.

The leadership skills nobody teaches at university

Most professions invest heavily in technical capability. Far fewer prepare people to lead others. That’s why new managers often discover that the most challenging parts of leadership have little to do with technical knowledge.

The conversations become more important than the tasks. Questions become more valuable than answers. Listening becomes just as important as directing. Some of the most important leadership skills include

• Coaching rather than controlling
• Giving constructive feedback
• Managing difficult conversations professionally
• Building trust across diverse teams
• Motivating employees through change
• Resolving workplace conflict
• Supporting well-being while maintaining accountability

Today, these aren’t mere soft skills but business-critical skills that directly influence employee engagement, productivity, retention and organisational culture.

Many organisations choose to strengthen these capabilities through programs such as Coaching for Performance, Managing Difficult Conversations, Performance Management and Leading High Performing Teams because they address the real situations leaders face every day, not just leadership theory.

Why first-time managers often struggle

The move from individual contributor to people leader is one of the biggest shifts in any career. Yet many organisations still expect new managers to learn through experience alone. The reality is that leadership isn’t simply another responsibility added to an existing role. It’s a completely different role.

New managers often find themselves balancing expectations from senior leaders while supporting their own teams through changing priorities, competing deadlines and workplace challenges. At the same time, they are learning how to communicate with influence, build trust and make decisions that affect others.

Without guidance, it’s easy to lose confidence. This isn’t a reflection of someone’s potential. It’s a reminder that leadership is a professional skill that deserves the same investment as technical capability.

That is why many Australian organisations introduce structured leadership development early. Building confidence through practical learning often helps new leaders avoid common mistakes and establish positive habits from the beginning.

What senior leaders and HR teams can do

Supporting new managers shouldn’t start after problems appear. The most effective organisations prepare employees for leadership before, or soon after, they step into the role. This may include

• Leadership training for first-time managers
• Regular coaching and mentoring
• Opportunities to practise real workplace conversations
• Feedback from experienced leaders
• A structured learning pathway that develops leadership capability over time

If your organisation is reviewing its leadership capability ahead of future growth or organisational change, exploring CTO’s Leadership Training programs can help identify practical learning solutions for supervisors, managers and emerging leaders.

Leadership is a journey, not a promotion

One of the biggest misconceptions about leadership is that it begins on the day someone receives a new job title. In reality, that’s where the learning begins.

Great leaders continue developing throughout their careers. They learn how to delegate without losing accountability. They become more confident giving feedback. They adapt their communication to different personalities. They coach rather than direct. They create opportunities for others to succeed.

These skills aren’t developed through experience alone. They improve through reflection, feedback, practical learning and consistent application in the workplace. Across every industry, organisations that invest in leadership capability are investing in stronger teams, better communication and more confident decision-making.

Many of CTO’s client success stories demonstrate how tailored learning programs have helped organisations strengthen leadership capability while supporting business outcomes. Reading these case studies offers practical examples of how leadership development can create lasting value across teams and organisations.

The transition is challenging – the right support makes the difference

Every experienced leader remembers what it felt like to lead people for the first time. The uncertainty, the difficult conversations, the pressure to balance results with relationships. Those experiences are a normal part of becoming a leader. What makes the biggest difference is having the opportunity to learn, practise and receive guidance along the way.

Whether you’re an emerging leader preparing for your first management role, a senior leader developing future talent, or an HR professional building leadership capability across your organisation, investing in practical leadership development helps create confident leaders who empower others to succeed.

Great employees becoming great leaders doesn’t happen by chance. Ready to build stronger leaders?

Explore CTO’s Leadership and Management Training programs, including Learning to Lead, Excellence in Supervision, Leading High Performing Teams, Coaching for Performance, Managing Difficult Conversations, and other practical workshops designed to help leaders at every stage build confident, capable and high-performing teams.

Frequently Asked Questions

How can first-time managers develop leadership skills?

The most effective way for first-time managers to develop leadership skills is through a combination of practical experience, coaching and structured leadership training. Programs that focus on communication, delegation, coaching, performance management and difficult conversations help new leaders build confidence while applying these skills in real workplace situations.

Why do high-performing employees sometimes struggle after becoming managers?

Being an excellent employee and being an effective people leader require different capabilities. High-performing employees are often recognised for their technical expertise, while managers are expected to motivate teams, build trust, manage performance and communicate effectively. Leadership development helps bridge this gap and supports a smoother transition into management.

What leadership training should new supervisors complete?

New supervisors benefit from leadership training that covers core management skills such as communication, delegation, coaching, conflict resolution and team leadership. Programs like Learning to Lead, Excelling as a Leader/Supervisor, Coaching for Performance and Managing Difficult Conversations provide practical tools that supervisors can apply immediately in the workplace.

Why is leadership development important for organisations?

Leadership development helps organisations build stronger managers, improve employee engagement and support long-term business performance. Investing in emerging leaders also strengthens succession planning, encourages consistent people management practices and helps create positive workplace cultures where employees are supported to perform at their best.

You can also explore our Business Case Studies to see how organisations across Australia have partnered with CTO to develop leadership capability through customised workplace learning solutions.