The Causes and Costs of Absenteeism in the Workplace — Part 2

by Kevin K. Johnson, Certified Senior Advisor (CSA)®

Over the past few years, our blog has discussed in detail, issues associated with lost productivity resulting from employee absenteeism that is brought about by elder caregiving. But what are other ‘common’ causes of workplace absenteeism? This is Part 2, the concluding information we wanted to present with an accounting of lost productivity in the workplace by occupation; a different look that we hope you find informative.

Risk ManagementCosts of Lost Productivity

The Gallup-Healthways Well-Being Index surveyed 94,000 workers across 14 major occupations in the U.S. Of the 77% of workers who fit the survey’s definition of having a chronic health condition (asthma, cancer, depression, diabetes, heart attack, high blood pressure, high cholesterol or obesity), the total annual costs related to lost productivity totaled $84 billion. According to the survey, the annual costs associated with absenteeism vary by industry, with the greatest loss occurring in professional occupations (excluding nurses, physicians and teachers); the 14 occupations and corresponding costs of lost productivity are shown in chart below.

Newsletter Graph_05Feb14According to Absenteeism: The Bottom-Line Killer, a publication of workforce solution company Circadian, unscheduled absenteeism costs roughly $3,600 per year for each hourly worker and $2,650 each year for salaried employees.

The costs can be attributed to many factors including:

  • Wages paid to absent employees
  • High-cost replacement workers (overtime pay for other employees and/or temporary workers)
  • Administrative costs of managing absenteeism

Other indirect costs and effects of absenteeism include:

  • Poor quality of goods/services resulting from overtime fatigue or understaffing
  • Reduced productivity
  • Excess manager time (dealing with discipline and finding suitable employee replacements)
  • Safety issues (inadequately trained employees filling in for others, rushing to catch up after arriving as a replacement, etc…)
  • Poor morale among employees who have to “fill in” or do extra work to cover absent coworkers

What Employers Can Do

  • Absenteeism is an especially difficult problem to tackle, because there are both legitimate and poor excuses for missing work – and it can be challenging for employers to effectively monitor, control and reduce absenteeism. Unless a company requires a written excuse from a doctor, for example, it can be difficult to determine if an employee is actually sick when missing work. At the same time, however, it is important for employers to consider the added costs associated with a sick employee who spreads an illness   that gets the whole division – or a lot of customers – sick.
  • To address problems like this, some companies, cities and states have moved toward a mandatory paid sick leave policy, where each employee receives a specified number of days each year to use when sick.
  • Opponents of mandatory sick leave argue that it will ultimately cost businesses more money and lead to increased layoffs. In addition, opponents have concerns that employees will use all their sick days whether or not they need them.  Advocates of such a move, however, argue that paid sick leave makes economic sense because it will help stop the spread of communicable diseases in the workplace and in schools – resulting in fewer instances of absenteeism in the long run – and that sick employees will be able to recover      sooner.
  • The Centers for Disease Control, for example, states that paid sick leave could have an especially significant impact in the food service industry, where it estimate that sick food handlers are responsible for 53% of norovirus (a particularly nasty form of stomach virus) outbreaks. – One sick food handler could theoretically infect dozens or even hundreds of people, resulting in a large number of absences that could have been avoided if that employee had simply stayed home. Unfortunately, workers often either need the money or are worried about being terminated for calling in sick – even if it’s unpaid leave – so they go to work even if they know they are contagious.

In an effort to reduce absenteeism, some companies offer incentives for going to work, such as earned time off or lotteries for workers who do not have any unexcused absences within a certain period.

Other firms might try a more proactive approach, putting policies in place to focus on responses to employee health concerns, including:

  • Physical health
  • Psychological health
  • Work-home balance
  • Environmental health
  • Economic health

The logic with this approach is that healthier, happier employees will be more able and motivated to go to work each day, resulting in increased productivity and higher morale for the individual workers as well as the entire team. Although these employee wellness strategies may be expensive to implement and maintain, they can have a net positive effect on a company’s bottom line – and that’s good for business.

The Bottom Line

Absenteeism costs U.S. companies billions of dollars each year in lost productivity, wages, poor quality of goods/services and excess management time. In addition, the employees who do show up to work are often burdened with extra duties and responsibilities to fill-in for absent employees, which can lead to feelings of frustration and a decline in morale.

Occasional absences from work are inevitable – people get sick or injured, or need time during business hours to handle personal business. It is the habitual absences that are most challenging to employers, and that can have the greatest negative effect on co-workers. Because missed work days have a profound financial effect on a company’s bottom line, it is beneficial for most businesses to implement strategies to contain absenteeism.

Absenteeism due to employees focused on eldercare costs U.S. employers over $33 billion per year. The absences are often uncontrollable making it extremely difficult for employers to successfully manage and control their outcomes. Here at Caring Concierge, our risk management work is designed to minimize the impact on the workplace associated with employees who have to also work through the demands of providing eldercare for senior loved ones.

 Forbes, July 10, 2013

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CARING CONCIERGE eNEWSLETTER — Readers of our blog ”Eldercare and the Workplace” may be unaware that we also have a monthly newsletter. Our electronic newsletter, simply titled “News from Caring Concierge” has been produced every month for the last 2 years. Its contents consists of articles and related resources regarding workplace productivity as it relates to the conservatively estimated +$30 billion aggregate cost lost to U.S. companies every year as their employees are challenged to address adult caregiving issues. If you would like to be included in our growing list of companies that receive this monthly eNewsletter, just send an email titled “Caring Concierge Newsletter—Subscribe” to me at kevin.johnson@caringconcierge.com. I’ll simply add you our distribution list. Should you wish, you can easily unsubscribe and please know that we never share your contact information with any other entity.

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About Caring Concierge
Caring Concierge is a risk management company providing employers throughout northeast Ohio with solutions to address business productivity loss caused by employee lost time hours resulting from the crisis of adult caregiving. The Caring Concierge model provides these solutions at no cost to employers. One motivating issue that inspired the creation of Caring Concierge is the personal challenges I've faced juggling work and trying to manage eldercare issues associated with the care and well-being of my elder parents. My efforts in the eldercare issues also extend to volunteer service. I proudly serve as Chairman of the Board of Directors of Fairhill Partners (www.fairhilpartners.org), in Cleveland, OH., a non-profit organization focused on lifelong learning, intergenerational relationships, and successful aging. In addition to academic degrees in Mechanical Engineering (undergraduate) and Business Management (graduate), I have earned the professional designation of Certified Senior Advisor.

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