Article: How much is absenteeism costing your company?

Performance Management

How much is absenteeism costing your company?

Absenteeism may cost you a lot of money

The main responsibility one has as a manager is to ensure that your staff is efficiently and reliably working towards achieving the company’s aims and objectives. There are several factors that negatively affect an organization’s productivity - employee absence being one of the most important. Even if a single member of the workforce is not present to fulfil their duties for one day, it tends to have an effect on the whole pattern of the working day. Of course, the problem is compounded if a number of your employees miss several days of work.

While a certain level of employee absence is part and parcel of organizational reality, managers need to be aware that not all absences should be accepted passively as inevitable. Absence from work can be basically divided into three categories:

  1. Authorized Leave: this includes previously agreed time off such as for holidays, training courses, family commitments etc
  2. Sick Leave: refers to individuals missing work due to health reasons, ranging from a day or two off for a common cold or a stomach upset, to longer periods away from work due to more serious or chronic medical conditions.
  3. Unauthorized Leave: this comprises of incidences of staff not reporting to work without giving prior notice of their absence. This is generally because they feel they are unable to come to work for any number of reasons like family responsibilities or because they are unhappy at work or lacking in motivation. This would also include occasions when employees take sick days off when they believe they would not get annual leave.

This article deals with issues concerning the latter two of the above. In fact most of the problem absence issues that managers have to tackle are due to short term sick leave.

Real Cost of Absence

A high prevalence of both sick leave and unauthorized leave can be a sign of unseen complications which, if not caught early on, can cause long term repercussions. Some of which are

  • Additional staff costs incurred due to the hiring and paying for temporary replacements.
  • Last minute replacement staff can only do so much to cover for the absent individual, and cannot perform to the same level as a trained and experienced employee. This inevitably leads to a drop in productivity of the department with deadlines being missed.
  • The resultant decline in efficiency and productivity has a detrimental effect on customer satisfaction levels.
  • The reputation of the company can be negatively affected amongst its customers and potential employees.
  • Conflict in the team or department affected is also not uncommon. This is mainly due to the bad feeling and low morale caused by employees having to shoulder the work burden of their absent colleagues.

By nipping the problem of high absence levels in the bud, management can minimize the above. To start it is very important that there is regular and constant monitoring of absence in the organization to establish if there is a problem in the company. By measuring and analyzing the statistics, one can specify the type of absence that is a concern. For example are certain employees prone to taking Mondays or Fridays off sick or is there a more than normal incidence of long term sick leave. A careful analysis can also highlight if there are certain departments or types of jobs more affected. By spotlighting the nature of employee absence managers can take appropriate steps to counter it.

What can an managers do to prevent illegitimate absence and support attendance?

  • Develop and introduce a clear and concise absence management policy and communicate it amongst all staff. Amongst other things this should define what is seen as excessive absenteeism and spell out the steps the employer will take to deal with it. This would underline the importance company leadership places on a good attendance record and emphasize that high absence levels are unacceptable in the organization.
  • Have a return to work interview with the absentee regardless of how short or long he/she was away from work. This serves the purpose of welcoming the individual back, checking if they have fully recovered, review their absence record and provide the employee or management the chance to air any underlying concerns which may have contributed to their absence.
  • Define and use trigger points to show employees when the company considers their conduct as unacceptable and outlines that a personal absence review is necessary. Employees need to be made aware that disciplinary action might be considered at this point.
  • Clarify who is responsible for absence management – the line manager or the human resource department. Usually it is the line manager who would be in charge of following up on such issues with the HR department getting involved if the problem is not resolved at that level.
  • Provide training to managers involved in the implementation of the policy. By its very nature this is a very sensitive sphere which needs to be handled sympathetically and with the right balance of tact and firmness. All employees taking part in the management of absence therefore need to be thoroughly coached and prepared to deal with such issues.
  • Differentiate between long-term and short-term absence because both the causes and the methods to deal with the two are very dissimilar. With short-term absence (typically less than 3 weeks) the emphasis is on notification and any managerial action to be taken. Whereas managing long-term absence (3 weeks and above) needs a more supportive and proactive approach to enable the employee to return to work.
  • Recognize and reward good attendance – this can be done by senior managers identifying and lauding individuals with particularly good attendance records with personal letters of acknowledgment and by recognizing their achievements in company-wide publications. Some firms go so far as to provide financial rewards in the form of bonuses or other prizes for employees with the least days off work.
  • Provide occupational health and other medical services on site – this can help by evaluating reasons of absence, planning returns to work and generally promoting good health. This is not a cheap option however and organizations have to ensure that these services are cost effective in the long run.

No organization can take the issue of employee absence lightly. Managers need to carefully monitor employee attendance in their organizations to identify problem areas. A clear, fair and firm absence management policy together with the implementation of the above strategies can go a long way towards reducing disproportionate employee absenteeism.

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Topics: Performance Management, Employee Relations, Employee Engagement

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