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Absenteeism is when workers take sick days for being unwell, presenteeism is when employees continue turning up to work but their productivity and effectiveness is reduced.
Depression, anxiety and other psychological stresses have been noted by doctors as the biggest contributors to lost productivity among workers.
In the study, researchers worked on the productivity level of more than 60,000 full-time employees and found chronic and acute physical and mental health conditions.
Out of 20 different physical and mental conditions, the research concluded mental health was the single largest contributor to lost productivity, followed by musculoskeletal problems.
One of the professors reported, 9.6 per cent of employees had moderate psychological distress and a further 4.5 per cent had high psychological distress.
He revealed that the more severe the worker's mental health issue, the more productivity was lost.
He adviced the companies to extend their physical examinations of workers to cover mental health as well, and counsel any workers in need to seek professional help.
"A significant number of people respond to short-term face-to-face or telephone counseling when you get to them early," concludes one of the researchers.