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To run a business successfully, there are a few building blocks that help build a strong foundation. The majority of these building blocks, however, are your employees. And if they’re not solid and present, your business risks falling apart.
Employee absenteeism is one of the most pressing issues in why these blocks become shaky and unstable. This doesn’t mean that your employees aren’t allowed time off and should work every working day of the year. But if a once in a while absence becomes a recurring thing, let’s say once a week even without a proper reason, then it becomes a pattern that hinders your business.
Not only does this put a financial strain on the business, but managers and coworkers also suffer elevated levels of stress and low levels of productivity for having to cover up and do extra work to make up for an employee’s absenteeism.
It’s important for business owners, managers, and leaders to acknowledge that showing up every day to work is not easy for all employees. Some suffer from a number of uncontrolled issues, like illness, commuting trouble, emergencies, and more. But if you suspect that you are dealing with employee absenteeism, then you would have to look at some numbers.
If you aren’t sure how you can calculate the absenteeism rate of an employee, a team, or even an organization, then LeaveBoard mentions a formula that you can use. All you need is data from your Humans Resources department. If you have software that already tracks your employees’ vacation days, paid leave, and absences, then this part becomes automated and you wouldn’t have to go through every physical or digital timesheet.
The formula is as follows: Absenteeism rate = (Number of absent days/number of available workdays in a given period) x 100
If you wanted to calculate the yearly absenteeism rate for an employee, for example, you would have to look at the total working days (minus weekends and public holidays). Let’s say that from 365 total days in a year, 104 are weekend days and there are 11 public holidays. You would end up with 250 working days.
On top of that, you would also have to exclude any vacation days and/or paid leave. Being late also doesn’t count as an absence.
So let’s look at Lara, an employee who works full-time in a gardening business in the US. If she worked for the full year of 2021 and had 20 vacation days, she would have 230 workdays. If she was absent for 10 days, then:
Yearly Absenteeism Rate for Lara = 10/230 X 100 = 4.3%
Before we get into the causes and cures for employee absenteeism, let’s look at how it affects businesses.
How Much Does Employee Absenteeism Cost Businesses?
Unexpected and unscheduled absences from work have a negative effect on both employers and employees.
Employees begin to lose their value as diligent members of the organization after seeing a smaller paycheck because of their absences and may even risk losing their job. The business begins to suffer low productivity, increased costs, and lower revenue. There is even the risk of a high employee turnover and increased labor costs since these absences will most likely lead to new hiring.
The Shift Absenteeism: The Bottom-Line Killer publication even mentions that employee absenteeism costs roughly $2,660 per year for each shift worker. Even if this doesn’t seem like a large number, when you put it into a perspective of a large company with 500 shift workers, then absenteeism would cost the business around $1,333,000 every year.
According to a survey of 94,000 workers from 14 major occupations in the U.S carried out by the Gallup-Sharecare Well-Being Index, $84 billion was the cost of 77% of workers who had a chronic health condition (such as asthma, cancer, depression, diabetes, heart attack, high blood pressure, high cholesterol or obesity). These costs were all related to a loss of productivity within the businesses because of absenteeism. The survey also found that the greatest loss was among professional occupations:
The annual cost of lost productivity by major U.S. occupations
Occupation - The annual cost of lost productivity due to absenteeism (in billions)
Professional (excluding nurses, physicians, and teachers) - $24.2
Managers/executives - $15.7
Service workers - $8.5
Clerical/office - $8.1
Sales - $6.8
School teachers (K-12) - $5.6
Nurses - $3.6
Transportation - $3.5
Manufacturing/production - $2.8
Business owners - $2.0
Installation/repair - $1.5
Construction/mining - $1.3
Physicians - $0.25
Farmers/foresters/fishers - $0.16
The Most Common Causes of Employee Absenteeism
While there can be a variety of reasons that employees miss work, not all are part of absenteeism. Let’s look at some of those most common reasons that result in a high employee absenteeism rate.
Not enough show of appreciation and direction
If a company or organization doesn’t do enough to guide and show appreciation for its employees, then they will feel as if they’re not valued. Employees will feel more inclined to call in sick even when they aren’t. Being underappreciated and with no goals will make them thin that they are easily replaceable.
About 75% of people who quit their jobs do so because of their managers and leaders. While it may be difficult to put the blame on those in leadership roles, it sometimes is the case. If you see a rise in absenteeism, low motivation, and productivity, then it is worth looking at your leadership.
Another common cause for a high employee absenteeism rate is the overwhelming workload that causes burnout. It is also a factor that is commonly overlooked because it is slowly developed and not always considered as an issue.
Personal or family issues
Sometimes personal or family issues are unavoidable and employees are forced to miss work. While this is not a reason to fire an employee because they’re ranking up a number of absence days, it is a reason to prepare for it at an organizational level.
Conflict and harassment in the workplace
When an employee is being harassed or has conflicts with other employees, their mental and emotional health suffers as a consequence. Especially since most cases of harassment go unreported, this can lead to employees not wanting to work and avoid the workplace.
Headaches, stomach aches, cases of flu, and other minor illnesses are often the case of absenteeism. Frequent migraines, for example, hinder the employee from doing their job effectively. And if they don’t rest, they risk prolonging the migraine and not being able to be productive for longer than a day.
Mental health issues
All of the causes mentioned above can also be a symptom of an underlying mental health issue. An annual survey carried out by CIPD states that one of the biggest causes of employee absenteeism is stress and mental health. Even if a condition is treatable, a lot of workers would rather choose to skip work to recover.
How To Reduce Employee Absenteeism?
Now that we know the major causes of employee absenteeism, it’s time to learn what you can do about it. It’s important to note that if your business or organization is attempting to improve your employees’ work life, then it won’t go unnoticed. Below we’ve compiled a few ways that you can reduce the number of employee absences at work.
Set clear expectations on attendance
Creating a policy that all employees, even managers, need to follow in order to report absences, the procedure on navigating through these absences, and even tracking them. When employees are fully aware of their actions and know that you will follow up on repeated absences, then they will be more mindful when they request time off.
Track employee absence
Tracking your employees’ absence days should not be considered micromanaging, and you as an employer should make that clear. Your business needs to have a detailed overview of its workforce since important decisions are often based on this data. If you have integrated time tracking software, then this process will be automated and you won’t have to look like you’re micromanaging your employees. You can just log into your dashboard and quickly generate timesheets and data.
Promote an inclusive team culture
Having a sense of belonging and a feel of being part of a team is often all it takes to reduce the number of employee absenteeism. Employees who are valued and considered as part of the company (rather than just a worker for it), then they will respect the company more and will have more motivation to do their job. Try organizing team activities outside of the regular working hours to promote inclusivity and build on those relationships.
Sometimes the only thing you can do is offer support to your employees. Especially if the issue is personal or family problems, then they really are factors that you can’t influence. All you can do as a company is support them through their tough time. This can also be in the form of offering them to work remotely or flexible working hours. Knowing that they feel supported by the organization will let them know that they are valued at work and that you support a healthy work-life balance.
Let’s Wrap It Up
While employee absenteeism can be a major issue for a company’s growth and success, it doesn’t have to be. Dealing with absenteeism may take a little while to mitigate, but the results will be long-lasting.
It’s important to remember that as a business, you can’t always handle everything. Sometimes it just is the flu. Especially now as we are living in a pandemic, missing work because of an illness is completely normal.
What you can do as a business is to prepare and manage your reaction. Everyone is human and compassion and understanding can go a long way. And since humans almost always need a little direction and guidance, you can set clear policies in place to deal with employee absenteeism.
Even Douglas Contant, an internationally renowned business leader, New York Times and Wall Street Journal bestselling author, keynote speaker, and social media influencer with over 40 years of leadership experience at world-class global companies, once said:
“To win in the marketplace, you must first win in the workplace.”