It’s a classic damned-if-you-do, damned-if-you-don’t scenario. Faced with the twin threats of a severe flu season and the possibility of avian flu turning pandemic, employers must carefully balance their traditional policies of discouraging no-shows against the multiplier-effect costs of spreading infection. And as Carol Sladek, work-life consultant with Hewitt Associates, points out, “it’s a very fine line.”

Of course, no employer will admit to encouraging sick employees to work, though policies that penalize excess sick days can have that effect. But many are aware of “presenteeism”: the growing phenomenon of snifflers and sneezers showing up at the office. In fact, a recent study by CCH Inc., a human-resources information provider, found that 48 percent of employers have recognized presenteeism as a problem, up from 39 percent in 2004.

In response, many companies have concluded that prevention is the best way to slash absenteeism. Some businesses, such as Bellevue, Wash.-based Coinstar Inc., for example, have long offered free flu shots. But this year, it seems more companies are recognizing that there is “a positive ROI in giving people flu shots,” says Helen Darling, president of the National Business Group on Health. For example, Graham Corp., a Batavia, N.Y.-based manufacturer of industrial equipment, sponsored an on-site inoculation program this fall for the first time.

“The cost of the shot is de minimis,” says CFO Ronald Hansen, estimating that inoculating 170 of the company’s workers cost “a couple of thousand dollars.” But while Hansen believes that the investment was well spent, he says the ROI can’t be determined until he sees how many sick days are used this winter.

Other firms are making provisions to care for the children of sick employees so the employees can recover more quickly. Although just 34 percent of businesses with 5,000 or more employees provided on-site or near-site child care in 2004, says George Faulkner, a principal with Mercer Health and Benefits, many others are now contracting with outside agencies for emergency day care.

If the avian flu does turn pandemic, of course, such measures may prove ineffective. Corporate absentee policies may then be trumped by government-imposed quarantines. In the meantime, however, experts recommend that companies review their short-term-disability policies to see if they extend to pandemics, and formulate emergency-travel policies, such as requiring employees who are returning from abroad to stay home for several days. It’s common sense, says Robert Wilkerson, global practice leader for corporate preparedness at Kroll Inc., that “anybody with a long supply chain with a lot of international travel and internationally produced goods will be more susceptible.”

Whatever the intensity of the flu season, contingency planning is essential to keep business moving, says Dr. Brent Pawlecki, associate medical director at Pitney Bowes. A multidisciplinary team has been formed at the Stamford, Conn.-based company to formulate responses to an avian flu outbreak, such as customizing work-at-home options. After all, he says, “there is a difference between wanting employees to perform their work and wanting them to come to work.” In this environment, he adds, common sense should rule. “If you’re sick,” he says, “don’t come to work.”