is absenteeism harming your workforce productivity?

Human capital leaders are forever seeking ways to increase workforce productivity, so it’s common to see them championing initiatives such as worker upskilling, investing in AI-enabled tools and implementing LEAN processes to raise efficiency. There is, however, one undertaking that companies often overlook that can significantly enhance output without spending a lot of resources or budget.

Absenteeism, which can have a detrimental impact on any organization, is well within the control of human capital leaders. Employees missing work due to illness, stress, family issues, job discontent or just wanting an extra day off may be an indicator of a larger workforce satisfaction issue or related concerns. Whatever the cause, companies can raise their workforce productivity through a range of actions designed to encourage and reward workers for excellent attendance.

The result of poor workforce attendance can have an impact on business and morale. For instance, unplanned absences can have an impact on other workers, who may have to put in overtime and work harder when a colleague fails to come to work. When customer-facing employees are unavailable, it can disrupt the client relationship. Delays in projects and decision-making are inevitable results of absenteeism.

According to the U.S. Centers for Disease Control and Prevention, American employers lose $225.8 billion a year from missed work – an average of $1,685 per employee. The IZA Institute of Labor Economics estimates that an increase of 1% in the rate of sickness absenteeism results in a productivity loss of 0.24%. Just in the U.K. alone, 15.4 million working days were lost last year due to work-related stress, anxiety and depression at an estimated cost of £13.5 million, one report found.

While your business may not have experienced a significant loss of productivity from absenteeism, you can still take steps to identify, measure and address the most common causes for missed work days. These may require changes to your workplace culture, management approach and internal communications, but the effort is well worth it since it can have a far-reaching impact beyond attendance. You might find higher engagement and retention over time, which could boost business performance and growth. 

is there a problem?

Most organizations don’t regularly examine employee attendance practices unless a problem arises, but that shouldn’t deter you from scheduling regular assessment. Just because line leaders haven’t noticed an issue doesn’t mean there isn’t one. Some telltale signs may be a spike in temp staffing spend due to unexpected absences, a sharp rise in the use of sick leave, growing family leave requests and higher health insurance costs among other signs. Furthermore, missed days may precede a spike in voluntary quits, which indicates a larger problem with management.

So the first step you should consider is defining what are planned versus unexpected absences. While this may seem like a simple exercise, it can be more complicated than you may think. For instance, expecting parents on maternity or paternity leave typically qualify as planned, but those who don’t return to work after their leave or have requested extended leave should be categorized as unexpected. If an hourly worker can only complete a portion of his shift due to any number of reasons, should you categorize the remaining time as unexpected? There are many other scenarios in which missed work isn’t clearly defined, but you should track these to determine if a pattern exists.

Once you have identified unplanned absences, use the data to determine how they affect your organization. Do you need to resort to temporary staffing to fulfill the work needed? Are project delivery dates being pushed back? Are your sales affected? Even in small ways – such as whether conference calls or meetings should be rescheduled due to one or more team members being out sick – should be considered in your broader assessment.

From there you can begin measuring the extent of the problem. Start with a baseline – monthly number of missed days, for instance – to track the extent of absenteeism across your workforce. Then look at business units or functional groups that may exhibit particularly high levels of unscheduled absences. To get more granular, identify and follow individuals who have spotty attendance records.

All the steps above will help you understand why workers fail to show up when scheduled and determine the best remedies. Reasons can include stress, mental health, employee engagement, job satisfaction, workplace discrimination and bullying, inadequate compensation, leave policies and health and wellness. Let’s examine how you can address some common drivers of poor attendance:

job stress

One of the most common reasons why workers go missing is feeling stress from their job. Whether it’s having too much or not enough work, staying at the office for too long, enduring pressure to perform or any other stresses, employees need regular respite from their jobs. Research shows that more days are lost due to stress and anxiety than physical injuries or illness. Both HR and line managers must be trained to look for signs that a worker is overly troubled and discreetly offer ways to alleviate their workload. Provide other support mechanisms such as mental health counseling or additional resources to help them perform their jobs.

worker engagement/lack of interest

According to Gallup, just 13% of workers worldwide are engaged at work. Additionally, companies scoring in the top quartile of workforce engagement have 41% lower absenteeism rates than those in the bottom quartile. Gallup notes that with results like this, employers need to help raise interest in the workplace. You might consider how giving workers more decision-making power and ownership of projects can drive a greater sense of purpose. By raising empowerment across your entire workforce, you also raise your workforce engagement.

family care

Labor regulations on family leave differ around the world, but your organization may want to consider benefits that are more generous than what’s required by law. Taking time off to take care of children, family members and spouses is unavoidable so examine whether your current policy adequately meets the needs of your workforce. Also consider alternative work arrangements for new parents such as work-at-home time, which gives your employees flexibility on the hours they work.

employee wellness

Illnesses are unavoidable but you can encourage healthier lifestyles through a robust wellness program that not only reduces absenteeism but also enhances performance. In addition to boosting physical wellness, don’t forget that feeling good mentally is important so make sure your program addresses the psyche also.

bullying/harassment

Addressing instances of bullying and harassment should be a high priority for your organization. Not only are they demoralizing to workers, but each infraction can put you at significant civil and criminal risk. Provide workers a safe hotline or some other discreet way to report these episodes, and take immediate action when alerted.  

Absenteeism can be a significant or minor workforce management challenge for your organization. The degree to which it can affect company performance depends solely on how you assess, track and remedy the issue.