Employee absenteeism can have a severe impact on the workplace. Not only does it affect employee engagement and retention, but it also comes at a huge financial cost. In fact, the Center for Disease Control and Prevention (CDC) reports that absenteeism in the U.S. costs employers $225.8 billion annually in productivity losses.
That’s $1.685 per employee.
A pretty scary number, right?
Given this high cost, it’s vital for you as an employer to understand how to manage and minimize employee absenteeism. In this post, we will discuss what it is and what the most common causes of employee absenteeism are. We will also share a few strategies and tips to help you address absenteeism and enhance retention in your company.
- What is employee absenteeism?
- Causes of absenteeism in the workplace
- How to calculate employee absenteeism
- How much unexcused absenteeism is acceptable?
- Impact of termination on absenteeism
- How to address absenteeism with an employee
- Strategies to reduce employee absenteeism and enhance retention
Employee absenteeism refers to habitual workplace absence that is typically unplanned and without valid cause. This might be due to personal or family emergencies, or short-term absences resulting from stress, burnout, injury, or ongoing illness. It does not include planned absences due to authorized annual or parental leave or occasional instances that can’t be controlled, such as an employee experiencing car trouble. The crucial difference is that with absenteeism, an employee was scheduled to work.
Whilst occasional absences don’t normally pose a problem, frequent absenteeism can have a detrimental impact on your company. Failure to address underlying issues can lead to a loss of profit and productivity and low employee morale. Excessive absenteeism can also indicate problems within the workforce or organizational culture.
Although every worker misses work from time to time, it’s crucial to know the difference between absenteeism and other types of absences when creating your leave of absence policy.
Let’s start by taking a look at some of the most common causes of employee absenteeism as well as a few tips to help you tackle the root causes in your company.
Injury and illness
Injury, illness, and medical appointments are the most commonly reported reasons for employee absenteeism. In fact, according to the National Institute of Mental Health, the leading cause of absenteeism in the United States is depression. Chronic conditions including back and neck injuries are also a common cause of absenteeism in the workplace.
Invest in good health and safety practices to help reduce absence rates due to injury and illness. You might also consider implementing a wellness policy to promote a healthy work-life balance and support the mental health of your employees. This can have a drastic positive impact on absence rates.
Stress and burnout
Closely linked to injury and illness are stress and burnout.
When employees feel overworked or overwhelmed, they become less engaged and less productive. And if you fail to address employee stress levels, it can lead to sickness and mental health issues.
If you have noticed a drop in performance with certain employees, it might suggest underlying issues with stress or burnout. To be sure, you should arrange a meeting with the employee in question to find out if there is any way you can support them. If you fail to address signs of stress and burnout then it could result in long-term absences. Which, in turn, further impact the rest of the team who are left to pick up the slack. This can lead to a vicious cycle of stress and workplace absenteeism.
Bullying and harassment
Another common reason for employee absenteeism is bullying and workplace harassment. Whether verbal or physical, harassment can have a dramatic effect on an employee’s well-being and engagement.
If you detect issues with bullying and harassment, then you need to implement strategies to improve employee relations so that each employee feels safe at work. Make sure you have clearly defined policies for preventing and resolving disputes between employees and managers. Provide training where needed and make sure you have procedures in place to manage disputes between employees, leadership issues, and personality clashes.
And most importantly, make sure all employees understand that HR is there to support them at all times.
Low workplace morale & engagement
If you have high rates of employee absenteeism in your company, then it could suggest that there is an underlying issue with employee morale and engagement. This is because if employees don’t feel a strong sense of organizational commitment and motivation it can have a huge impact on performance and productivity. It can lead to weak office relations and an increase in unscheduled absences.
Lack of a flexible work schedule
Another common cause of employee absenteeism is a lack of a flexible work schedule. Flexible and remote work has become increasingly popular over the past few years, especially since the start of the Covid-19 pandemic.
Many companies are now realizing the importance of promoting a healthy work-life balance. Allowing employees to manage their own work schedules and focusing on performance and output rather than fixed schedules results in happier and more productive employees. It also impacts absence rates as employees are able to manage their personal commitments without taking time off work.
If you haven’t already done so, you might want to consider implementing a flexible and remote work time tracking policy in your company.
Calculating employee absenteeism is a fairly straightforward process. First of all, make sure that you have a clear way of measuring and tracking employee time off. Some employers use excel employee timesheets to do this, while others automate and simplify the process with digital time clocks or timesheet software.
Once you have records of unexcused employee absences on hand, you’re ready to calculate the average absenteeism rate over a period of time. Then, you divide the number of absences by the time period and multiply that number by 100.
Absenteeism rate formula
Here’s what the formula for employee absenteeism looks like:
Employee absenteerism rate (%) = (# of unexcused absences/amount of time) x 100
To get a more accurate picture of employee absenteeism in your company, it’s especially important to only include unexcused absences. That way, you can target the underlying causes and find the best possible solutions for employee absenteeism in your company. The amount of time that you plug into the formula is completely up to you. Whether you want to calculate employee absenteeism for a year, a month, or even a week, you can use the same calculation.
To get a better idea of how to calculate employee absenteeism, let’s take a look at an example.
Let’s say that company X has an employee who has had 4 unexcused absences within a month (20 working days).
The absenteeism rate calculation for this employee would look something like this:
0.2 = 2 unexcused absences/22 working days
20% = 0.2 x 100
Employee absenteeism rate = 20%
According to the Bureau of Labor Statistics, the average absence rate for full time employees in the United States was 3.6 days in 2022. This number includes absences due to illness, injury, and other reasons.
Ideally, you’ll want for your employee absenteeism to be as low as possible. While unplanned ansences are bound to occur, you’ll want to try to promote physical and mental wellness in the workplace as a preventative solution.
If you have an employee who is regularly absent, its best to look at performance reviews and schedule one-on-one meetings. This will help you to get a better understanding as to why they are missing so many days. If there’s no progress or if employees have an absenteeism rate that exceeds 8 days per year, then it might be time to take disciplinary action.
If an employee is repeatedly absent from work, you might be tempted to terminate their employment, especially if you live in a state that has legalized at-will employment, where employees can be dismissed without “just cause”. However, bad firing practices can still put you at risk for a wrongful termination suit.
For one thing, you need to be aware of the impact of firing someone due to sickness or injury. These absences are often covered by the Family & Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA). To ensure compliance, you should make sure you keep a written record of all absences. Time-keeping software can be a great solution for this. A software solution also ensures you are complying with overtime and time and a half requirements as well as wage and hour laws in your state.
Another major reason for not jumping the gun is the negative impact termination can have on the rest of your workforce. It can affect the morale of the company as a whole and lead to increased stress if the workload of other employees is affected. All this can result in disengagement and further issues with employee absenteeism.
If you are having issues with an employee’s time and attendance, then you need to address it as soon as possible. The first step is arranging a meeting to discuss any potential issues with employee absenteeism. Make sure you approach this as a fact-finding exercise, not a disciplinary process as this could result in further stress. Convey empathy and avoid judgment until you know the full story.
Try to establish the underlying reason for an employee’s frequent absences. Are they stressed or overworked? Do they have the right support from management? Are they experiencing issues with bullying or workplace harassment? Are they unmotivated?
Offer them support and make sure they are aware of your absenteeism policy. Once you understand why they are taking so much time off work, you can work together to find a solution.
In order to reduce employee absenteeism and enhance retention in your company, you need to address the underlying reasons for unplanned absences. More often than not, it is due to an issue with morale and engagement. You also need to make sure you have a solid absenteeism policy in place.
The best way to increase employee morale and engagement is to invest in an effective people management solution. With the right solution, you can gather regular feedback from employees to establish if there are any areas of concern that might be impacting morale and engagement. You can also implement a reward and recognition program to keep employees focused and motivated. All this will have a positive impact on absence rates.
Finally, you need to have the right tools at hand to make sure you are tracking and keeping a record of all absences. Although simple attendance templates can be used to keep track of time and attendance, a time and expense tracking app or an automated system can streamline and speed up the process.
With Factorial’s employee time tracking software, you can track your employees’ working hours, increase productivity, and reduce absenteeism. Plus, geofencing technology helps you keep track of overtime and time and a half to ensure compliance with timekeeping requirements and wage and hour laws.
Sign up now and start improving your HR management with Factorial.