Absent employees represent a chronic problem for U.S. employers, especially as businesses contend with today’s tepid, slow-growth economy. The total annual costs related to lost productivity due to absenteeism in the U.S. totaled $84 billion, according to a recent Gallup-Healthways Well-Being Index.
To make that staggering multi-billion-dollar figure more meaningful, conservative estimates put the cost of absenteeism at $3,600 per hourly employee per year, and $2,650 per salaried employee per year, according to research by Circadian Technologies, Inc. If you have hundreds or thousands of employees, the costs add up.
The U.S. Bureau of Labor Statistics defines absences as instances where persons who usually work 35 or more hours per week (full time) worked less than 35 hours during a week for one of these reasons: personal illness, injury or medical problem; child care problems; other family or personal obligations; civic or military duty; and maternity or paternity leave. (Fifty percent of leave takers gave no advance notice of leave, according to the Employment Policy Foundation.) Excluded are work days missed due to vacations or personal days, holidays, labor disputes, and other issues.
Yet most employers don’t have an accurate picture of how absenteeism cascades through their business, creating a variety of negative, disruptive consequences—even though on any given day about one in ten employees will be absent, according to Circadian. Some high-stress industries such as healthcare and emergency services have higher rates of absenteeism.
Why is there little clarity about the impact of absenteeism compared to other costs, such as healthcare? Well, healthcare can easily be examined as a line item in a budget. Absenteeism rarely appears in any report that organization leaders see on a regular basis. Information may be reported piecemeal—with metrics detailing occupational injury and illness incidence rates, lost-workday accident cases, and workers’ compensation cases. About one in five organizations track disability/extended leave and Family and Medical Leave Act (FMLA) absences.
Without the benefit of a robust absence management program, business leaders won’t see the invisible impact of high absenteeism:
• Higher turnover. Turnover is 7.8 percent per year in facilities with low to average absenteeism and 10.6 percent in facilities with high absenteeism, according to Circadian.
• Poor quality of goods or services due to fatigue caused by excessive overtime.
• Reduced ability to meet demand, leading to dissatisfied customers.
• Lower productivity—idle time is 4.1 percent in facilities with low or average absenteeism, and 7.7 percent in facilities with high absenteeism, according to Circadian research. Temp replacements unfamiliar with work practices and equipment slow down production. And absences can have a domino effect, with co-workers being less productive due to added responsibilities. Supervisory productivity suffers when replacements must be obtained and oriented, and when work flows must be readjusted. These productivity drags are particularly common in manufacturing, education, retail, and health services—industries that typically rely on replacement workers or employee overtime to fill the gaps.
• Safety and health hazards created by poorly training replacement workers; fatigued employees working excessive overtime to make up for absent employees; and slips, trips, and falls caused by employees rushing and taking shortcuts to cover for absent co-workers.
• Poor morale—other employees having to cover absences leads to resentment. Absenteeism is 7.5 percent per year in facilities with good morale versus 9.4 percent in facilities with poor morale, according to Circadian.
• Degraded employee physical and mental health caused by working excessive overtime. Employees who work too many hours tend to get less sleep and have a greater prevalence of cardiovascular and gastrointestinal disease, diabetes, and musculoskeletal disorders. There is an association between working more than 55 hours per week and a threefold likelihood of cardiac issues, and a four times greater chance of diabetes, according to the Circadian Health in Extended Hours of Operations study.
• Poor management of employee absences can lead to a vicious cycle of rising stress levels that negatively affect employee health and morale, and lead to even more days of work missed.
Total Absence Management Programs minimize the impact of all types of employee absences on your operations, customer service, quality, production, organizational culture, and workforce health and well-being. These programs emphasize monitoring all absences, tracking outcomes, expediting return-to-work in a safe and timely manner, and communicating about issues and solutions (such as wellness programs and EAPs) to ensure that employees remain engaged and knowledgeable about the varied and transparent impact of absences.
