Absenteeism is an employee's intentional or habitual absence from work. While employers expect workers to miss a certain number of workdays each year, excessive absences can equate to decreased productivity and can have a major effect on company finances, morale and other factors. This article looks at the causes of absenteeism, the costs of lost productivity and what employers can do to reduce absenteeism rates in the workplace. Causes of Absenteeism People miss work for a variety of reasons, many of which are legitimate and others less so. Some of the common causes of absenteeism include (but are not limited to):
Costs of Lost Productivity The Gallup-Healthways Well-Being Index surveyed 94,000 workers across 14 major occupations in the U.S. Of the 77% of workers who fit the survey's definition of having a chronic health condition (asthma, cancer, depression, diabetes, heart attack, high blood pressure, high cholesterol or obesity), the total annual costs related to lost productivity totaled $84 billion. According to the survey, the annual costs associated with absenteeism vary by industry, with the greatest loss occurring in professional occupations (excluding nurses, physicians and teachers); the 14 occupations and corresponding costs of lost productivity are shown in Figure 1. According to Absenteeism: The Bottom-Line Killer, a publication of workforce solution company Circadian, unscheduled absenteeism costs roughly $3,600 per year for each hourly worker and $2,650 each year for salaried employees. The costs can be attributed to many factors including:
Other indirect costs and effects of absenteeism include:
What Employers Can Do Absenteeism is an especially difficult problem to tackle, because there are both legitimate and poor excuses for missing work - and it can be challenging for employers to effectively monitor, control and reduce absenteeism. Unless a company requires a written excuse from a doctor, for example, it can be difficult to determine if an employee is actually sick when missing work. At the same time, however, it is important for employers to consider the added costs associated with a sick employee who spreads an illness that gets the whole division - or a lot of customers - sick. To address problems like this, some companies, cities and states have moved toward a mandatory paid sick leave policy, where each employee receives a specified number of days each year to use when sick. Opponents of mandatory sick leave argue that it will ultimately cost businesses more money and lead to increased layoffs. In addition, opponents have concerns that employees will use all their sick days whether or not they need them. Advocates of such a move, however, argue that paid sick leave makes economic sense because it will help stop the spread of communicable diseases in the workplace and in schools - resulting in fewer instances of absenteeism in the long run - and that sick employees will be able to recover sooner. The Centers for Disease Control, for example, states that paid sick leave could have an especially significant impact in the food service industry, where it estimate that sick food handlers are responsible for 53% of norovirus (a particularly nasty form of stomach virus) outbreaks. - One sick food handler could theoretically infect dozens or even hundreds of people, resulting in a large number of absences that could have been avoided if that employee had simply stayed home. Unfortunately, workers often either need the money or are worried about being terminated for calling in sick - even if it's unpaid leave - so they go to work even if they know they are contagious. In an effort to reduce absenteeism, some companies offer incentives for going to work, such as earned time off or lotteries for workers who do not have any unexcused absences within a certain period. Other firms might try a more proactive approach, putting policies in place to focus on responses to employee health concerns, including:
The logic with this approach is that healthier, happier employees will be more able and motivated to go to work each day, resulting in increased productivity and higher morale for the individual workers as well as the entire team. Although these employee wellness strategies may be expensive to implement and maintain, they can have a net positive effect on a company's bottom line - and that's good for business. The Bottom Line Absenteeism costs U.S. companies billions of dollars each year in lost productivity, wages, poor quality of goods/services and excess management time. In addition, the employees who do show up to work are often burdened with extra duties and responsibilities to fill in for absent employees, which can lead to feelings of frustration and a decline in morale. Occasional absences from work are inevitable - people get sick or injured, have to take care of others, or need time during business hours to handle personal business. It is the habitual absences that are most challenging to employers, and that can have the greatest negative effect on coworkers. Because missed work days have a profound financial effect on a company's bottom line, it is beneficial for most businesses to implement strategies to equitably monitor, reduce and respond to absenteeism. -- Also From Investopedia: 4 Ways To Take Your Career To The Next Level No Finance Degree? No Problem! Top 10 Ways To Jumpstart A Career In Finance
There are a number of factors that can make or break a company. One of them is its workforce. Having a great workforce can spell the difference between success and failure. The happier and healthier employees are, the more likely it will be that the company will be successful. But that isn't always a guarantee. That's because there are a number of employee-related issues many businesses face that can chisel away at their success. One of those is absenteeism—when employees miss work beyond the scope of what's expected. Keep reading to find out more about absenteeism, the root causes of this phenomenon in the workforce, and how it affects employers.
Absenteeism refers to an employee's habitual absence from work—usually intentional and without any good reason. It goes beyond any absences related to things like occasional sickness, vacations, and other personal time. While a few absences here and there don't normally pose a problem, absenteeism can, especially when an employee doesn't show up to work unexpectedly for extended periods of time. While employers generally expect workers to miss a certain number of workdays each year, excessive absences can equate to decreased productivity and can have a major effect on company finances, morale, and other factors. People miss work for a variety of reasons, many of which are legitimate. Others generally are not. Some of the common causes of absenteeism include, but are not limited to:
The Gallup-Sharecare Well-Being Index surveyed 94,000 workers across 14 major occupations in the U.S. Of the 77% of workers who fit the survey's definition of having a chronic health condition (asthma, cancer, depression, diabetes, heart attack, high blood pressure, high cholesterol or obesity), the total annual costs related to lost productivity totaled $84 billion. According to the survey, the annual costs associated with absenteeism vary by industry, with the greatest loss occurring in professional occupations (excluding nurses, physicians, and teachers)—the 14 occupations and corresponding costs of lost productivity are shown below. Annual cost of lost productivity by major U.S. occupations
According to Absenteeism: The Bottom-Line Killer, a publication of the workforce solution company Circadian, unscheduled absenteeism costs roughly $3,600 per year for each hourly worker and $2,660 each year for salaried employees. The costs can be attributed to many factors including:
Other indirect costs and effects of absenteeism include:
To address problems like this, some companies, cities, and states have moved toward a mandatory paid sick-leave policy, where each employee receives a specified number of days each year to use due to illness or injury. Opponents of mandatory sick leave argue that it will ultimately cost businesses more money and lead to increased layoffs. In addition, opponents have concerns that employees will use all their sick days whether or not they need them. Advocates of such a move, however, argue that paid sick leave makes economic sense because it will help stop the spread of communicable diseases in the workplace, resulting in fewer instances of absenteeism in the long run, and that sick employees will be able to recover sooner. The Centers for Disease Control, for example, states that paid sick leave could have an especially significant impact in the foodservice industry, where it estimates that sick food handlers are responsible for 53% of norovirus outbreaks. One sick food handler could theoretically infect dozens or even hundreds of people, resulting in a large number of absences that could be avoided if that employee simply stayed home. Unfortunately, workers often either need the money or are worried about being terminated for calling in sick—even if they aren't compensated for the missed hours—so they go to work even if they know they are contagious.
Many employees still go to work even when they're ill because they fear they may be terminated or need the money. Absenteeism is an especially difficult problem to tackle because there are both legitimate and poor excuses for missing work. It can be very challenging for employers to effectively monitor, control, and reduce absenteeism. Unless a company requires a written excuse from a doctor, for example, it can be difficult to determine if an employee is actually sick when missing work. At the same time, it's important for employers to consider the added costs associated with a sick employee who spreads an illness that gets the whole division or a lot of customers sick. In an effort to reduce absenteeism, some companies offer incentives for going to work, such as earned time off or lotteries for workers who do not have any unexcused absences within a certain period. Other firms might try a more proactive approach, putting policies in place to focus on responses to employee health concerns, including:
The logic with this approach is that happier, healthier employees will be more able and motivated to go to work each day, resulting in increased productivity and higher morale for the individual workers as well as the entire team. Although these employee wellness strategies may be expensive to implement and maintain, they can have a net positive effect on a company's bottom line—and that's good for business. Absenteeism costs U.S. companies billions of dollars each year in lost productivity, wages, poor quality of goods/services, and excess management time. In addition, the employees who do show up to work are often burdened with extra duties and responsibilities to fill in for absent employees, which can lead to feelings of frustration and a decline in morale. Occasional absences from work are inevitable—people get sick or injured, have to take care of others, or need time during business hours to handle personal affairs. It is the habitual absences that are most challenging to employers, and that can have the greatest negative effect on coworkers. Because missed workdays have a profound financial effect on a company's bottom line, it is beneficial for most businesses to implement strategies to equitably monitor, reduce, and respond to absenteeism. |