Employee Absenteeism | 4 mins read

Cause and Effect- How Much is Employee Absenteeism Really Costing You?

cause and effect how much is employee absenteeism really costing you
Michelle Jaco

By Michelle Jaco

Absenteeism, also known as the bottom line killer, can result in lost productivity for any business. The following addresses the causes of employee absenteeism and how to fix the problem.

Employee absenteeism puts a financial strain on many businesses. With more employees absent it creates a loss of productivity. To find a solution for absenteeism, employers must find out where the problem is coming from, to begin with. Employers should start by measuring the absenteeism rate of their business. An absenteeism rate calculates the ratio of absences to workdays in a given period of time (annually or quarterly). If excess absenteeism is found, this can indicate issues within the inner workings of a workplace.

Main Causes of Absenteeism

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Many people miss work, for valid reasons or not. Here are some of the most common causes of employee absenteeism-

Bullying
Employees who are bullied or harassed at work are more likely to call in sick to avoid further harassment in the workplace.

Employee burnout, stress, and low morale
Heavy workloads, stressful deadlines, or feelings of being under-appreciated can cause employees to avoid coming into work.

Childcare or eldercare
Employees may be forced to miss work to take care of children or sick and aging parents.

Depression
Depression can be a common cause of absenteeism in the workplace. Depression can lead to substance abuse or fatality if not addressed promptly. Employers just have employees seek help if symptoms become unsafe.

Disengagement
Employees who don't feel valued at their job or just aren't committed are more likely to miss work. By management showing appreciation for hard work and commitment, it may improve employee engagement and morale.

Illness
Illness can include injuries or medical appointments and are most the commonly reported reasons for skipping work. It then comes to no surprise that during the colder seasons, absenteeism typically increases.

Injuries
Whether it's minor or major injuries, they result in an absence. Many office employees who sit for long hours may suffer longterm ailments or injuries, bringing tension to the neck and back area, which can develop into a major issue of concern.

Job hunting
Employees may call in sick to attend a job interview or training.

Partial shifts
Arriving late, leaving early, or abusing break times are all considered forms of absenteeism, which can affect the productivity and morale of all employees.

The Cost of Losing Productivity

A survey conducted by Gallup-Healthways surveyed 94,000 workers across 14 major occupations in the U.S. Of the 77 percent of workers who fit the definition of having a chronic health condition, such as heart disease, cancer, or diabetes, the total annual costs to lost productivity totaled to $84 billion.

Unscheduled absenteeism (absences that were not previously approved, like vacation days) costs can cost a business more than $3,500 annually. Costs can be reflected in the following-

  • Wages paid to absent employees
  • Poor quality of goods/services from overtime fatigue or understaffing
  • Lower productivity
  • Excess manager time
  • Safety issues
  • Poor morale amongst employees who have to cover for frequently absent employees

What Employers Can Do to Fix the Problem

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Employee absenteeism can be hard to target because there can be both excused and unexcused absences. This is challenging for employers to monitor, or to know if an employee is actually sick or just calls in sick to avoid his or her shift. Because of this discrepancy, many companies have adopted mandatory paid sick leave policies. This is where an employee receives a certain number of days each year to use when sick.

Opponents of mandatory sick leave say it will cost businesses more and believe that employees might use the sick days when they're not needed. But by providing mandatory sick leave, this stops the problem of sick employees coming into work in fear of losing their jobs. Advocates argue that paid sick leave will help stop the spreading of disease and illness in the workplace. Advocates believe this would ultimately result in less absenteeism in the long run.

The Center for Disease Control, for example, states that paid sick leave could have a significant impact on the service industry. The CDC found that all those responsible for handling food, while ill, are also typically the catalyst behind 53 percent of norovirus outbreaks. Norovirus, also known as the stomach flu, is a highly contagious illness and can easily be contracted from consuming contaminated food or water, or by touching contaminated surfaces. Working while sick - even if it's just one employee - has the potential to infect a large number of consumers and coworkers. It can also result in a larger number of absences that could have been avoided if sick employees just stayed home.

In an effort to reduce absenteeism, many companies offer incentives for going to work. This can include earned time off or lotteries and drawings for a chance for employees to win additional time off.

Other companies may include a more proactive approach by putting health policies in place. Before putting policies into place, companies must conduct a workplace health assessment and consider factors such as employee lifestyle choices or work environment. Then planning a program can take place, following implementation, and then evaluation of the success of these policies. Common company policies include-

  • Company policies that promote healthy behaviors such as tobacco-free work zones
  • Providing healthy food options at vending machines or workplace cafeterias
  • Access to local gyms
  • Employee health insurance coverage
The logic behind these approaches is if an employee is healthier and happier, then employees will be motivated and willing to show up to work each day. And with improved attendance comes increased productivity and higher employee morale.

Many of these employee wellness policies limit frequent absenteeism, which increases productivity and therefore a positive effect on a company's bottom line.