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We all know that people will miss days at work at some point, but if employees don’t think work attendance is important, they may tend to take advantage of being absent.  When employees take advantage of being absent from work, the cost to the company is great.

What is Meant by the term Employee Absenteeism?

Before we address the cost of absenteeism, let’s look at the terminology used to identify employee absences. In a broad sense, employee absenteeism falls into two categories:

Planned Absenteeism: long-term absences, annual leave and other time paid off, vacation leave, staff/workforce development leave, government service leave, routine and other planned medical treatment.
• Unplanned Absenteeism: unplanned/emergency absences, short-term absences (not otherwise planned)

The following are some of the main reasons why people stay out for short- and long-term absences.

Illness: the most common reason for short-term absences is illness. It can be as simple as a cold or more complex like the flu. Ongoing medical issues are usually responsible for some long-term absences.  
Stress: the most common reason for long-term absence among office personnel—especially when stress starts to negatively impact mental health. According to the Sainsbury Centre for Mental Health, 40% of the time the typical worker takes off each year is due to mental health-related issues. 
Injury: both work-related and other injuries. Musculoskeletal injuries are prevalent injuries among those who do manual labour personnel, and backpain is common among office personnel.
Family and Other Personal Issues: child/elder care issues, personal emotional/mental issues, grief over the loss of a loved one, etc.

The Cost of Absenteeism

Research done by the U.S. Department of Labour in 2015 predicted that the percent of a company's staff absent daily was at least 3 percent. According to the Bureau of Labour Statistics, the Labour Force Statistics from the Current Population Survey,  there was a total of 2.8 thousand days missed among the 113,154 full-time wage and salary employees found in the US in 2017.  The amount per employee has changed little since 2015, in which the cost per employee was roughly $1,685 a year. For mental health-related absences, employers in the UK can expect to pay up to £8.4 billion a year.

For instance, employers in the UK can anticipate paying at least £500 per employee each year in absenteeism costs.  And here’s no wonder. According to the Office for National Statistics, 137 million working days were lost because of sickness or injury in the UK in 2016, or the equivalent of 4.3 days per worker.

In Ireland, an employer can expect to pay roughly €569.64 per year per employee.  The Department of Public Expenditure’s research on 250,000 workers in Ireland revealed that each full-time Civil Service employee took used 10.2 working days for absences.

Absenteeism in the workplace is a severe problem in Australia. Research reveals that 5 percent of the total Australian workforce will be absent of any given day, and the total yearly expense for handling planned and unplanned absenteeism is as high as $33 billion.

There are also other consequential costs of employee absenteeism that are not financial (but may indirectly affect profitability):
• low employee morale
• management frustration
• negative customer feedback
• more employee overtime and workload

Managing Employee Absenteeism Strategies

Although companies differ on their thoughts of which employee absenteeism management approaches work best for short-term and long-term absences, most will agree that the more popular approaches are proving to be the more successful approaches to handling employee absenteeism.

Strategy 1: Create and Implement a Clearly-Defined Attendance Policy

To communicate employer attendance expectations, it’s best to establish an attendance policy to ensure equitable treatment of all employee absences. Also, establishing a clearly-defined policy lets employees know that consistent attendance is expected employee behaviour.  One of the major obstacles businesses face when handling absenteeism is the ambiguity of the definition of absenteeism. Therefore, definitions of pertinent terms like tardiness and injury-related absence help eliminate any misperceptions of allowable workplace practices and practices that may require more disciplinary action.

New employee orientation meetings are a good place for employers to meet with new employees and discuss the attendance policy. This is the chance to eliminate any misperceptions about acceptable attendance practices and to discuss the proper protocol for reporting absences.  Employees should leave the orientation understanding how attendance is criteria for measuring employee performance.

Strategy 2: Monitor Time Taken Off

One of the best strategies for managing employee absenteeism is to have a protocol for monitoring employee absences. One popular strategy for monitoring absenteeism is the return-to-work interview. This interview allows the employer to show employee support whenever an employee is facing an issue that requires a short- or long-term absence. It also allows management to maintain control of managing absences because it provides a protocol to determine if the employee is ready to return to work, and it documents an employee’s absence history for easier detection of absentee patterns.

The goal of the employer is to follow-up with the employee as soon as the employee returns to work to determine the nature of the absences. Thanks to a defined attendance policy, the employee knows to have an explanation of why the absences had to occur. At this point, the manager will determine if the absences were legitimate reasons or instances that may require extended follow-up (like disciplinary action or referral for support services). This strategy is highly effective because when employees know you are documenting patterns, they realize you mean business.

Strategy 3: Maintain a Pleasant Work Environment

Most business critics will agree that creating an ergonomic work environment will relieve stress and improve work performance. Also, ergonomic work environments can decrease musculoskeletal health issues that often cause absenteeism. With the proper lighting and ergonomic workstations, employees are bound to appreciate the reduced stress on their eyes and other body parts. Also, employers need to consider having breakrooms structured to provide more than just a lunch space. The furniture and amenities should encourage relaxation and foster an environment that is a different world from the regular workspace.

Strategy 4: Offer Rewards

Offering a paid hour off at a decided upon timeframe (like 3 days or a whole week) is a good strategy for rewarding those who have perfect monthly attendance. Those who observe others getting this benefit will desire to have this benefit themselves and will strive to perform better in their attendance.  Another attendance incentive is to offer a bonus for employees who had no unexpected absences for an entire year. 

Another incentive is to incorporate attendance performance on the employee’s annual review. This sends the message to employees that consistent attendance is not only important to the organization, but it is also appreciated.  Moreover, rewards for appropriate attendance practices reinforce an environment of professionalism and employee support.

Strategy 5: Establish a Work-Life Balance

People sometimes have life issues that pose a challenge to coming to work. Employees can help show support by providing programs that offer referral services to help employees with various physical, emotional and psychological needs. These programs—often referred to as employee assistance programs (or EAP)—are an effective way to communicate to employees that their overall well-being is just as important as their work performance.  The benefits to a company are numerous. For starters, the employer gains an effective resource for handling complex absence issues. It also allows the employer to retain high-quality employees who may have a nonwork-related issue that can be resolved or managed with the proper treatment or intervention.

Your Business Can’t Ignore Managing Absenteeism

No business can expect to be successful without having a team of employees that are dedicated to doing their job. Therefore, it’s important for employers to establish work performance expectations that show employees they value their time and input into the daily operations of the business. Managing absenteeism lets employees know that the employer runs a professional business with measurable standards of employee performance—including employee attendance. The cost of preventive absenteeism will far outweigh the costs of unnecessary employee absences.

Author Bio

Pierce Ivory is the Marketing Director at Advance Systems, a company that provides world-class enterprise workforce software. Involved in digital since 2010, Pierce completed a Master’s degree in digital marketing getting first class honors. He specializes in the field of people operations and HR management for B2B software companies. You can find Pierce on Twitter (@pkivory) and Linkedin.