What is employee absenteeism costing your company?
Workplace absenteeism is a major concern these days– and with good reason. Even casual absenteeism costs Canadian employers billions of dollars a year. And that doesn’t take into account disability costs, lost productivity or the demoralizing impact on the workplace.
Absenteeism is not only a source of concern and irritation for employers but it can also be costly. According to Statistics Canada, since 1997, absenteeism for personal reasons, such as illness or disability, and personal or family responsibilities, is on the rise. On average approximately 5.5% (484,000) of all full-time employees were absent from work for all or part of the week for personal reasons. By 2006, the rate had risen to 8.2% (896,000) of all full-time employees.
The actual cost an employer incurs as the direct result of a casual absence, or short/long-term disability absence, is complex and often difficult to quantify. There are many factors to take into consideration, such as hard or direct costs, and soft or indirect costs to the organization, the latter being the most difficult to quantify and measure.
Causes of Absenteeism
- serious accidents and illness
- low morale
- poor working conditions
- boredom on the job
- lack of job satisfaction
- inadequate leadership and poor supervision
- personal problems (financial, marital, substance abuse, child care, etc.)
- poor physical fitness
- transportation problems
- inadequate nutrition
- the existence of income protection plans (collective agreement
- provisions which continue income during periods of illness or accident)
- employee discontent with a collective bargaining process and/or its results
Cost of Absenteeism
Decrease in Productivity
- employees may be carrying an extra workload or supporting new or replacement staff
- employees may be required to train and orientate new or replacement workers
- staff morale and employee service may suffer
- payment of overtime may result
- cost of self-insured income protection plans must be borne plus the wage costs of replacement employees
- premium costs may rise for insured plans
- staff time is required to secure replacement employees or to re-assign the remaining employees
- staff time is required to maintain and control absenteeism
Trends in Absenteeism
- The higher the rate of pay and the greater the length of service of the employee, the fewer the absences
- As an organization grows, there is a tendency towards higher rates of absenteeism
- Women are absent more frequently than men
- Single employees are absent more frequently than married employees
- Younger employees are absent more frequently than older employees but the latter are absent for longer periods of time
- Unionized organizations have higher absenteeism rates than non-union organizations
Tips for Absenteeism Management
- Create an absence policy and communicate it
- Record and measure absence
- Reduce absenteeism by enforcing and managing the staff absence policy
- Follow employee absence with return to work interviews
- Proactive absence management – reward excellent attendance
- Be realistic – plan for unscheduled staff absence
- Consider unpaid leave or options to buy more holiday time
- Minimise absence by improving their working conditions
- Make controlling absenteeism a business priority
- Keep your staff absence policy up-to-date
Interested in learning what the Silverberg Group can do to help you with employee absenteeism? Email us!
Silverberg Group specializes in employee benefits consulting for companies of all sizes, and is Alberta owned & operated. From employee benefits programs to executive packages, we translate industry information into innovative options and solutions that best suit your organizational goals. Since 1996, over 800 clients have put their confidence in our industry expertise and our exceptional service. Let us become part of your company’s human resources team.