The High Cost of Absenteeism for Employers

The High Cost of Absenteeism for Employers

#2 In a series of 3

For employers, absenteeism is both a financial burden and a logistical one. Even short term authorized absences sometimes necessitate hiring temporary staff to cover for absent employees. Costs to companies for absenteeism on an annual basis are staggering.

There are three main types of absenteeism, and it is important to understand how they impact your company’s bottom line.

Authorized Absences
When employees have had their absences “authorized” by their managers, these absences are recognized as necessary and approved. Vacations fall into this category, as do maternity and paternity leave, public holidays, training days, medical appointments or procedures, and family weddings.

Unplanned Absences
In the category of unplanned absences, employees might need to be absent due to a minor illness, mental health, an injury, stress, anxiety, depression, an emergency such as one with a child, spouse, or elderly parent. Other unforeseen circumstances might be a car accident, a flight delay, a death, and/or a funeral.

Unauthorized Absences
Some employees take time away from work without letting a manager know, and not because of legitimate grounds to be absent. Their unauthorized absences might be a reflection of their dissatisfaction with their job, their lack of motivation to work in an understaffed environment, or because of conflict with their colleagues or boss. Workplace bullying or harassment can be a factor. Or the employee might be looking for another job. Repeated unauthorized absences from the same employee should be addressed with the intention to find out the underlying causes for the behaviour. Similarly, employees who are consistently late should be questioned about the reasons for that behaviour too.

The Real Costs of Absenteeism
In 2021 Sun Life of Canada issued a report on absenteeism in Canadian organizations and estimated the direct cost to the Canadian economy was $16.6 billion. Some statistics on absenteeism in Canada since then indicate that there has also been a spike post COVID with absenteeism. During COVID, absenteeism was primarily evidenced with workers in the health care and social services sectors where the workers were hit largely due to their exposure to COVID patients, and the stress of a lot of overtime in understaffed workplaces.

The Mental Health Commission of Canada found in 2016 that mental health issues in Canada costs the economy $20 billion per year. Post-COVID, that number is most certainly higher too.

For employers, the costs of absenteeism included the loss of work hours, the disruption to the colleagues or team members of the absent employees, the potential additional costs to hire temporary staff, the inability of the company to meet specific goals or deadlines which results in fines or extra expenditures.

Meanwhile, in 2021, only 46% of employers tracked absenteeism and 15% calculated the direct cost of it. Tracking absenteeism is crucial to being able to make the appropriate changes in the workplace to reduce it. Keeping track of how many absentees there were per month, and what kind of absentees, can help you create a plan to mitigate them.

Ways to Reduce Absenteeism

1. Write an Attendance Policy
Make sure your employees know the company expectations around attendance, such as, what constitutes “late.” What is the process for getting an “authorized absence”? How many absences are allowed per month or per year? What are the consequences of going over those limits?

2. Reward Good Attendance
As an added incentive to avoid unauthorized absenteeism, and lateness, reward employees who maintain a good attendance record.

3. Provide Employee Support through EAP Programs
Employees who have unauthorized absences might need to access the services provided through EAP programs. Employees are often wary of accessing EAP as they believe it could impact their opportunities for promotion. Make sure your\ EAP program is regarded as a resource they can access without fear of it
impacting their evaluations or their future in the company.

4. Improve Employee Engagement
Employees who are engaged at work are proud of the work they do and feel that they are contributing to a vibrant and healthy company. They also feel that their work is appreciated, valued, and acknowledged.

5. Track Employee Absenteeism Monthly
Find a way to track when employees are absent, they types of absences, and the reasons provided. What gets measured can be improved.

At Health Risk Services, we help managers of benefits plans make strategic decisions to craft cost-effective personalized plans that can assist you and your organization to address the “Absenteeism” challenge. Whether the solution of preference for your company is adding additional support programs, renovating your existing coverage, or crafting intentional messaging, Health Risk is here to help!

To schedule your Complimentary Consultation with Health Risk Services, please call 403-236-9430 OR email: [email protected]