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How Much Is Employee Absenteeism Costing Your Company?

How Much Is Employee Absenteeism Costing Your Company?

Do you have one or more employees that are habitually absent?

Employees are bound to miss some workdays 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 are usually not a concern, it’s an entirely different story for habitual absences.

Habitual absenteeism is the frequent absence of an employee without a valid reason. An employee who’s sick or injured, for instance, may not be able to work.   Employees may also take time off for family matters and vacation.  These are valid reasons.  Absenteeism focuses specifically on employees who frequently or habitually miss work without a valid reason.

Impact on 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.  When an employee is constantly absent, your company will experience loss of productivity both individually, the personal impact of coworker absence, and collectively, the impact on the team when a peer or associate is absent.

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 are not only counterproductive, their lack of performance is reflected in your P&L.

Finding Additional Resources

Habitually absent employees can cause you to spend more time and resources.  Finding a replacement when a team member fails to show up on schedule, or meeting deadlines when the employee did not schedule time off, disrupts workflow.  Covering for habitual absent team members causes strain on the whole team, to ensure they can maintain individual productivity when a member is under performing and to avoid company wide performance deficits.

The increased workload caused by habitual absenteeism is often added burden on some individuals and when left unmanaged it can cause turnover of top talent.  Ongoing compensation for absent team members can put pressure on individual performers, and over time decrease your team’s willingness to do what it takes to meet deadlines.  Habitually absent employees must be explored to identify the reasons for their absence and manage change.  Protocols can be designed to help managers resolve the core issues surrounding habitual absenteeism.  Additionally, continual investment of time and resources to keep your operation on track is a costly and not a long-term solution.

Lower Morale

Habitual absenteeism can lead to a lower morale among your workforce.  Finding a replacement typically involves costly resolution; finding coverage internally or externally, and bartering with other employees who may already be managing a heavy workload.  Covering for habitual or chronic absenteeism can also mean you are asking for extra time from salaried employees. Making up the work on the weekend in order to meet deadlines is risky.  Most employees look forward to the weekend to rest and recuperate.  If you find yourself frequently asking your team to work overtime because a member is habitually absent, the risk of burn out and reduced morale increases significantly.  Many long-term and loyal employees will oblige. They are committed, but everyone has his/her threshold.  The strain on employee work-life balance will create noticeably lower morale and negative workplace culture.

Higher Turnover Rate

Another way absenteeism can harm your company is by increasing turnover rate. Keeping habitually absent employees on your payroll is a financial burden that can have a broad reaching effect on your business performance.  When an employee is constantly absent without a valid reason, you need to think about saving your team.  Assess the pressure and impact on other members.  Determine solutions that will alleviate undue pressure on your high performers while you explore the reasons for habitual absence.  Loss of good people, loss to top and bottom line, and loss of market share are inevitable when habitual absence is unmanaged.

Don’t get blindsided.  Turnover from absenteeism can be voluntary.  Even if you don’t separate from a habitually absent employee, he or she may quit voluntarily.  Absenteeism is often a sign that an employee isn’t happy with a role, a relationship, or is suffering from a personal struggle.  A lack of job satisfaction increases the risk of a voluntary turnover.  Avoid getting blindsided by a habitually absent employee that stops showing up to work without giving notice.

Common Causes Of Absenteeism

To prevent habitual absenteeism, we 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 over time.  They may continuously exceed the workday hours and impede personal time.  We find burnout when employees work long periods of time on tasks that are against their natural problem solving method of operation, or MO.  Employees who are burned out often lack motivation and enthusiasm for their work, and if the situation has been long term, the employee may have compromised decision making ability.  Burnout can be prevented and corrected with open and frequent dialogue that targets alignment of responsibilities with personal strengths.

A negative work experience can also contribute to chronic or habitual absenteeism.  A negative work environment can be due to strain and tension of a management relationship or other leaders.  Strain and tension discourages employees from doing their best work.  The inability for a motivated employee to perform their best will show up as misaligned efforts, lag time in meeting deadlines and eventually the inability to continue with your company.  You can recognize the signs of a flight risk employee with frequent planned conversations, to maintain role satisfaction and alignment.  By taking action to prevent and correct habitual absenteeism, you can cultivate a positive employee experience and a productive work environment.

Maria Forbes