How are innovation and presenteeism related? Firm-level evidence from the United Kingdom

Presenteeism, the act of working despite illness, has a significant impact on firms' performance because it can lead to long-term health problems and productivity losses. This study examines the relationship between innovation and presenteeism at the firm level, addressing a gap in the literature concerning the influence of firm characteristics on presenteeism. In particular, it examines whether innovative firms are more or less likely to exhibit presenteeism compared to non-innovative firms. Using data from 3563 computer-assisted telephone interviews with managers from 2947 SMEs in the UK, we find a positive correlation between innovation and presenteeism that holds conditionally on factors such as firm size, age, industry and workplace well-being initiatives. However, this relationship weakens when firms are financially committed to the health and well-being of their employees. Although causality cannot be inferred due to possible endogeneity, the findings suggest that innovation may be a contextual factor influencing presenteeism.