Absenteeism carries a hefty price tag of thousands of dollars each year. According to a 2005 “Shiftwork Practices” study by Circadian, unscheduled absenteeism costs $3,600 per year for each hourly worker, and $2,650 for each salaried employee.
The good news is that you can stop absenteeism from hurting your bottom line by taking a proactive approach to attendance management and addressing issues before they get out of hand.
The costs associated with workplace absenteeism are direct and indirect. The direct financial hit comes from:
Then there’s the matter of indirect costs, which may include:
Although you have to expect workers to miss a certain number of workdays each year, you’re dealing with a different situation if that time is unscheduled, excessive or not properly captured. Scheduled absences, for example, consist of vacation or personal time – whether part of a PTO plan or calculated separately. Normally this type of time off is budgeted as a payroll expense and doesn’t pose a problem. However, unnecessary costs arise when time is taken but not deducted from the PTO bank. It’s estimated that the average employee takes three days of unreported PTO annually.
By tracking absences and dealing with attendance problems head on, you can control costs and avoid the drain on your business.
Unscheduled absences, on the other hand, may include arriving late to work, leaving early, taking longer breaks or lunches than allowed, or not showing up at all. In the typical workplace, unscheduled absenteeism can range from 5 to 10 percent, meaning as many as one in 10 workers is absent when he or she should be working. Though this varies by industry, with healthcare and retail experiencing the highest rates of absenteeism, unscheduled absenteeism disrupts the flow of any business and leads to many of the indirect costs mentioned earlier.
By tracking absences and dealing with attendance problems head on, you can control costs and avoid the drain on your business. Here are some pointers:
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