Employee absenteeism is a pervasive problem that affects workplaces across industries and can have a significant impact on business operations and productivity.
There will always be a degree of unplanned absence because life happens to people, but it shouldn’t be a recurring trend.
By understanding what absenteeism is and what causes it, you can learn how it affects your organization and find ways to address them.
What is employee absenteeism?
Employee absenteeism refers to the unplanned or unannounced absence of staff on a frequent basis. It also covers partial absences like early departures, tardiness, and extended breaks.
For clarification, absenteeism excludes legitimate reasons for absences like:
What is the effect of absenteeism on employees?
Absenteeism should be taken seriously because it can negatively impact work relationships, productivity, and the organization as a whole.
If an individual is absent, they also work less, which affects their output. Other team members may shoulder the absent employee’s workload or leave things as it is, which can cause the whole team to miss deadlines or fail productivity targets.
The manager is also involved because they have to spend extra time strategizing how to reach daily goals due to the absent employee instead of performing their usual daily tasks. A Centers for Disease Control and Prevention Foundation study revealed that absenteeism costs employers $225.8 billion annually in terms of lost productivity.
Moreover, absenteeism can impact company profits. According to ADP, absences can decrease profit margins unless revenue grows. For instance, employers will have to spend on overtime pay or hire contract workers to fulfill business objectives. This can result in more expenses, which reduces profit margins.
Additionally, a decrease in revenue is likely to happen if income-generating workers are frequently absent. Employees who sell products or services (manufacturing, software, consulting industries) have less time to hit their sales targets, potentially reducing revenues.
Absenteeism can also have an indirect negative effect on employee morale. Overworking can exhaust individuals, resulting in decreased employee engagement. Not to mention the extra work can cause present members to take days off too, creating a domino effect of employee absenteeism.
How to calculate absence rate?
According to International Organization for Standardization, absence rate is calculated by dividing the number of absent days by the total number of available work days in a given period (week, month, quarter, or year) multiplied by 100.
For example:
For example:
If an employee is absent for 2 days and there are 22 working days in a month, the employee’s monthly absence rate is 9.09%.
Or if an employee is absent for 5 days and there are 63 work days in a quarter, the person’s quarterly absenteeism rate is 7.9%.
You can also automatically calculate your absenteeism rate using absence management software platforms that can be integrated with your existing systems. You’ll have access to reliable data, metrics, and analytics in real-time to identify problem areas and address them immediately.
What is considered extensive employee absenteeism?
There is no established rule when it comes to how many days of absences are considered excessive absenteeism. However, three or more unexcused absences in 90 days could be merited as excessive absenteeism.
As per Bureau of Labor Statistics, the national average absenteeism rate in the US is 3.2%. In contrast, experts said that the ideal absenteeism rate for organizations should be around 1.5%.
What causes absenteeism?
1. Burnout
If stress within the workplace is steady and unrelenting, or an employee has too much work, they can suffer from exhaustion or burnout.
Symptoms of burnout are an inability to function properly and an inclination to illness because of a compromised immune system. Employees can, however, be reluctant to discuss the problem with their manager or HR. Many people fear losing their job or to be seen as weak.
Want to know how to reduce employee burnout in your company?
2. Depression
According to World Health Organization, an estimated 5% of adults suffer from depression globally. Many people with depression feel ashamed to speak openly about it, but with access to the right help, they would be able to cope and return to productivity.
3. Toxic work environment
Being surrounded by toxic workers is mentally and physically draining. A company culture of bullying, setting unrealistic standards, or weak management, will eventually cause employees to cave under pressure. In these instances, do you have channels of communication to address these kinds of issues?
4. Disengagement
A disengaged employee doesn’t care much about their job, often with good reason. Employees can lose interest if management is disengaged, shows no appreciation, procedures are erratic, and the pay is low. Active employee engagement, performance appraisals, and quality feedback will turn the situation around.
5. Domestic problems
Domestic problems can arise suddenly, turning a star employee into an unproductive person. Financial and relationship issues, childcare, chronic illness of a child or partner, or divorce and separation significantly impact overall wellness.
An employee wellness program or confidential counseling with a trusted HR professional can help someone cope better.
6. Poor Leadership
A poor manager-employee relationship is a common cause of absenteeism. When working feels like a nightmare, it's not surprising that employees would rather be absent than deal with ‘the boss from hell’. In fact, a survey by Indeed cited that having a micromanaging boss significantly affected millennials’ work motivation over the past 12 months.
7. Inflexible work schedule
Plenty of studies indicate that many employees enjoyed the benefits of working from home. Post-pandemic, people return to the office after a long period of remote work. The long hours of commute/travel and the expenses that go with it can be demotivating. A study by Clarify Capital said that nearly 7 in 10 employees said they would rather look for a new job than return to the office.
These are only a few more common reasons previously productive employees start taking unauthorized absences. Showing care and understanding can have a positive impact, allowing remedial action to be taken and improving staff retention.
How do you solve employee absenteeism?
Here are steps HR can take to address employee absenteeism:
1. Discover the root causes of absenteeism
If you notice a trend in employee attendance, as a manager, talk to your team members and ask them why their absences are habitual. It's important to sound gentle but firm, so employees are encouraged to be honest with their reasons. If they have a valid reason, find an approach to correct it.
For instance, they may be a top performer, but with the company relocation, they’re struggling with the travel or commute. Maybe you can suggest they find a nearer place to live or help them reconsider remote or hybrid work.
However, if they’re being late or absent for no reason at all, you could inform them they’ll be subject to disciplinary action.
2. Conduct an employee survey
If you notice a widespread pattern of employee absenteeism across your organization, conduct an employee survey to find common reasons for absenteeism in your company. After reviewing the survey data carefully, implement employee engagement strategies or workplace policies to resolve organizational-level absenteeism.
3. Create absenteeism policies
If you don’t have absenteeism policies in place, make that your starting point. They must be included in your HR policies and procedures. Ensure that all managers, supervisors, and team leaders are brought up to speed on absenteeism policies. Make the details available to all existing staff in writing and through HR.
Be sure to include the absenteeism policies in all future employment contracts. Employees must understand that unauthorized absences can lead to disciplinary action and, if continued, eventual dismissal.
4. Keep track of employee absences
Document the times and dates they occur. Tag them as scheduled or unscheduled absences for your legal compliance. Suppose you need to let go of an employee due to numerous absences, you’ll have evidence to support your decision.
5. Have clear lines of communication between employees and management, and HR
Encourage staff to report toxic behaviors, weak managers, and other issues to HR. There are many internal communication tools that you can integrate with your HR systems to improve employee engagement. Ensure that each issue raised is addressed in confidence and that no employee goes unheard or is punished for speaking up.
6. Create an employee wellness program
Implement an employee wellness program that includes confidential counseling (online or face-to-face) so that people can discuss mental health issues like anxiety, burnout, and depression.
Offer mental health resources to educate your workforce on stress management, resilience building, and coping mechanisms. Consider adding mental health services to your health insurance coverage for no or low out-of-pocket costs like medications, mental health counseling, and clinical screenings.
7. Update your benefits policies
Review your remuneration and benefits policies to ensure that you offer market-related salaries and access to quality assistance.
Unsurprisingly, employees will stay motivated and even excel in their work when they know their efforts will be appropriately rewarded. Otherwise, you’ll see spikes in your absenteeism due to workers looking for jobs elsewhere.
8. Create a hybrid workplace policy
If you’ve allowed employees to work from home before and you notice a surge in unscheduled absences due to your back-to-office work policy, consider implementing a hybrid work arrangement. Let your employees continuously enjoy the perks of remote work. Not only will you make them happier with work-life balance, but you’ll also benefit from increased engagement.
Alternatively, if you notice an increase in tardiness, consider a flexible work schedule where employees can choose to work at a time they’re most productive and comfortable time.
9. Review your PTO regulations
Your PTOs may not be as reasonable as they should be. If you want well-rested and refreshed employees with fresh ideas and energy, they deserve much-needed breaks.
If you only offer parental leaves, vacation, and bereavement, consider adding floating holidays that employees can use to celebrate their cultural or religious holidays or even birthdays.
10. Reward employee attendance.
Just like how much you would reward overtime work, consider incentivizing employees with perfect attendance. Not only will you see your employee absenteeism drop, but it could also create healthy competition among employees, creating a fun work atmosphere. Incentives aren’t only limited to cash.
You could also reward employees with non-monetary perks: an extra day off, a gym membership, a cinema ticket for two, a free lunch coupon to their favorite restaurant, a discount voucher to their favorite online store, or anything that your budget can afford.
Why you shouldn’t ignore employee absenteeism
If you haven’t paid much attention to the absence rate in your organization it’s time to sit up and take note. Loss of productivity doesn’t only affect big corporations. Startups and small to medium-sized companies are equally as vulnerable.
Many people will quickly take advantage of weak policies or managers who give too many chances. Also, you might not realize that your working environment could be the trigger of absenteeism.
Regular workplace audits and inspections are essential to ensure health and safety measures are in place. Management must also be assessed, particularly in departments prone to high levels of unannounced absence.
Gather data from employee communication systems as well as performance appraisal tools. Take note of trends and give regular feedback to staff and management.
That way, you will identify triggers of unannounced absence and can implement steps to curb absenteeism so that it doesn’t become the norm.
Conclusion
Whether unauthorized or approved for valid reasons, the absenteeism rate in your company will harm staff morale, productivity, and your bottom line. No business can afford to repeatedly have an incomplete staff.
Apart from the impact on colleagues, it will quickly filter down to your customers when deliveries are late, deadlines aren’t met, or key staff are often unavailable.
Bad service is a brand killer, and your customers will soon migrate to greener pastures. Employee retention of top performers will begin to suffer too as your competitors poach them with better working conditions.
Take some time out to do an absenteeism calculation over the past year and see how it has affected your bottom line. There’s no fixed ratio to how many unauthorized absences are too many. That is something that you’ll have to gauge based on whether your company meets targets and reaches expected growth levels.
