How Much Is Employee Absenteeism Costing Your Company?

How Much Is Employee Absenteeism Costing Your Company?

Does your company have one or more employees on payroll who are habitually absent without a valid reason? Employees are bound to miss some days of work over the course of their tenure. Research conducted by the U.S. Bureau of Labor Statistics (BLS) shows that full-time employees miss roughly three days of work per year. While occasional absences typically aren’t a concern, it’s an entirely different story for habitual absences.

Overview of Absenteeism

Habitual absenteeism, or what’s known simply as absenteeism, is the frequent absence of an employee without a valid reason. It doesn’t account for absences with a valid reason. An employee who’s sick or injured, for instance, may not be able to work. Employees are also allowed to take time off for family matters and vacations. These are valid reasons. Absenteeism focuses specifically on employees who frequently or habitually miss work without a valid reason.

Loss of Productivity

Allowing absenteeism to go unchecked can harm your company in many ways, one of which is the loss of productivity. Employees are the driving force behind productivity. They perform the tasks that allow your company’s gears of operation to turn. When an employee is constantly absent without a valid reason, your company will lose his or her productivity.

According to the U.S. Centers for Disease Control and Prevention (CDC), companies in the United States lose a collective total of over $225 billion per year from the loss of productivity associated with absenteeism. The CDC further found that the average cost of a habitually absent employee is nearly $1,700 per year. Habitually absent employees aren’t productive. They are counterproductive, which is directly reflected in your company’s profits.

Administrative Work

Habitually absent employees may force your company to spend more time and resources on administrative work. For example, you’ll have to find a replacement when an employee fails to show up on schedule. Assuming the employee didn’t request time off — which many habitually absent employees don’t — this may be difficult. You’ll have to call employees on their day off to see if they are willing to come to work.

The increased administrative work is just another burden caused by absenteeism. Habitually absent employees are still on your company’s payroll, so you’ll have to manage them. When they don’t show up to work, you’ll have to spend time and resources on administrative tasks to keep your company’s operations afloat.

Lower Morale

Absenteeism can lead to a lower morale among your company’s workforce. As previously mentioned, finding a replacement typically involves calling an employee on his or her day off. Most employees look forward to their days off because it gives them a chance to rest and recuperate. If you ask them to come to work, they won’t be thrilled to say to the least.

Many long-term and loyal employees will oblige by coming to work on their day off. They don’t want to make their employer angry, so unless an employee has something planned for the day, he or she will likely come to work. Nonetheless, employees will have a lower morale when they are asked to come to work on their day off, and this lower morale may spread to other employees in your company’s workplace.

Higher Turnover Rate

Another way absenteeism can harm your company is by increasing its turnover rate. Keeping on habitually absent employees on your company’s payroll is a financial burden. When an employee is constantly absent without a valid reason — and assuming you’ve exhausted all efforts to correct his or her behavior — you may have to fire the employee.

Turnovers from absenteeism can be voluntary as well. Even if you don’t fire a habitually absent employee, he or she may quit voluntarily. Absenteeism is often a sign that an employee isn’t happy with his or her job. A lack of job satisfaction, in turn, increases the risk of a voluntary turnover. Habitually absent employees may simply stop showing up to work without giving you their two-week notice.

What Causes Absenteeism?

To prevent absenteeism, you must understand what causes it. Burnout is a leading cause of absenteeism. Burnout is a form of job-related stress that’s characterized by exhaustion from performing long or repetitive tasks. Employees who are burned out often lack the motivation to work, thereby increasing the risk of absenteeism. They don’t have a desire to show up and perform the burnout-inducing tasks, so they choose to stay home instead.

A negative working environment can also contribute to absenteeism. A negative work environment discourages employees from coming to work. If an employee’s peers and managers have a negative attiude, he or she won’t feel motivated to work. In turn, the employee may be absent. These are just a few possible causes of absenteeism. By taking action to prevent absenteeism, you’ll cultivate a more positive and productive workplace that contributes to your company’s long-term success.

Brent Hermansen