Organisations are built upon the solid foundation of their employees. This means that with higher absenteeism, the foundation can begin to crack, which can create a distinguishable impact on the organisation’s labour costs.
The average absence rate within Australia falls between 3.5% to 4.2%, with an increasing trend due to the effects of COVID-19. As a result, employee absenteeism can directly cost an organisation on average $3,500 per employee per annum.
Over time, the impact of this cost can cause a great detriment to the profitability of a business and their overall growth, which is why 84% of businesses are aiming to spend more resources and focus on this issue in an attempt to reduce its impact on the organisation.
Employee absenteeism can be a vicious cycle. Due to the absence of one employee, this results in other colleagues receiving more work and stress, which detriments their mental health leading to burnout.
It is therefore important to determine the root cause of absenteeism, to strategize how to employee absences and improve the organisation’s overall workplace culture. Continue reading this Legal Kitz blog to find out more.
What is employee absenteeism?
Employee absenteeism is defined as the consistent, unplanned absence of an employee without valid cause or justification. This excludes any planned absence or justified reason such as illness or transport issues.
What is the true cost of absenteeism?
When an employee is absent without good reason, it causes a shockwave of ramifications across the organisation impacting productivity, profitability and efficiency.
Productivity
When an employee is absent from work, this results in other workers gaining a larger workload, which gives them less time to work on their own tasks. As a result, the business experiences lower output, which can also diminish the coworkers health, leading to burnout or burden. This can result in employees performing less work, as they are not at their most productive state.
Profitability
Absenteeism impacts profitability in a multifaceted way – both through the increased cost and reduced output. Increased costs to the organisation derive from the need to increase overtime pay or hire expensive contractors to cover employee absence. Along with this, the company will most likely experience lower productivity, which will result in decrease in revenue and reduced profit margins. Reduced output results from the reduction of productivity, meaning employees have less time and resources to reach their goals.
Efficiency
Reduction of staff in the workplace may require coworkers to complete other tasks that they are not familiar with such as operating machinery or dealing with important tasks. As a result of their lack of training in this area, there is a higher risk of mistakes which may lead to severe health and safety risks. For example, someone in the medical industry may be required to work 2-day shifts to cover a colleague. No matter their skill, this mental and physical exhaustion will result in lack of focus and increased mistacts.
What are the causes of absenteeism?
Employee absenteeism may occur for a variety of reasons at different impact levels. The two impact levels are short term and long term.
A hubspot survey found that short term absenteeism is the most problematic, as it accounts for 90% of all absence cases. According to this survey, these were the most common absence drivers.
Short term
- Personal illness
- Carers leave
- Taking a sickie
Long term
- Prolonged illness
- Mental health problems
- Work and non-workplace injuries
A large driver of workplace absenteeism is related to the working environment itself and the entitlement mentality within the workplace. This entitlement mentality relates to an employee feeling a sense of deservingness or special treatment. For example, an employee may feel like they have been working so hard that they deserve a day off, even though everyone else has been working hard too.
Although not all absenteeism can be managed by the organisation, there are several workplace influences that are proven to contribute to absenteeism that can managed within the working environment including:
- Work relationships.
- Increased workload.
- Flexibility arrangements.
- Rigid workforce planning.
- Poorly designed or mundane work.
- Lack of management.
- Bullying and harassment.
- Stress and burnout.
By managing these influences, there is a high probability that the workplace culture will improve, resulting in less absences. In order to determine the main pain points within your workforce, you must be able to recognise the early signs of absenteeism and adapt your strategies accordingly.
How to identify employees most likely to have a high rate of absenteeism?
The traits of employees who are connected to more absenteeism at work include those with the following personality traits: extroverted, lack conscientiousness, have a high use of substance abuse, suffer from depression, and are young. Although this is not a distinct guide to which employees will be most absent, there is a proven trend that these types of people are most likely to have high absenteeism.
How to determine excessive absenteeism in the workplace
If an employee constantly takes unexcused absences, there is a number of measures that will identify the extent of the issue, including:
- How much working time has been lost.
- The length of the absence.
- Type of absence.
- How often the employee is absent.
- If there is a pattern of absence.
- Is there evidence to justify the absence.
If you find these statistics excessive, you must consider the company’s policies and procedures for time off and the expected level of absence from an employee. Most companies should have an attendance policy, which defines the standard of attendance. If an employee fails to meet the requirements of this policy, there is fair reason to consider termination.
It is important to sit down with the employee to discuss the issue, allowing you to gather their side of the issue. If there are changes that can be made which are mutually agreeable, e.g. less hours a week as they are experiencing burnout, then termination may not be required.
After the conversation if you still believe that the employee is not the right fit for the organisation, termination may be most suited. This article will outline the best way to handle employee termination.
What strategies can be used to reduce absenteeism in the workplace?
Reducing employee absenteeism will result in a range of benefits for both the organisation as a whole and employees. A well-structured absence management program is the most sustainable and efficient way to reduce absenteeism and promote a healthy and positive workplace. The following considerations should be made when designing the program:
- Employee wellness
The biggest determinant of whether employees are able to show up to work is their overall wellbeing. Poor mental and physical health will inhibit their ability to work. Prioritising wellbeing through strategic programs and practices will encourage employees to come to work, and make them feel valued within the organisation.
To improve wellbeing in the workplace, you may implement strategies such as increasing physical activity, providing nutritional advice and/or providing free health assessments. An organisation can also get creative by creating a competition or fun work day to encourage wellbeing such as bringing in healthy food, or reaching a certain number of steps.
- Paid time off or vacation days
Due to a significant number of employees taking absence due to stress or burnout, there is a need for employees to take time off to reset and rest to ensure they come back to work, at their best ability. By encouraging employees to take days off, either through their contract or through different company policies, it will allow the employee to have a greater work-life balance, resulting in less absentees.
- Implementing flexible working arrangements
Allowing the employee to work in a way that suits their lifestyle will maximise their willingness to work and increase their overall productivity. These flexible working arrangements may include working days from home or working less days during the week. Following the COVID-19 pandemic, remote work has become increasingly more accessible and desirable, with many employees preferring to work from home due to convenience and safety. Although this is a preferable way to work for employees, this may not be feasible for every organisation, such as those requiring manual labour or face-to-face contact. Talking with the employee to discuss their preferred working arrangement will significantly increase their desire and ability to work.
- Policy for attendance
Open communication from the recruitment stage is of vital importance to ensure employees are aware of their responsibilities and expectations prior to commencing their positions. Creating a policy regarding employee attendance and clearly outlining these details when the employees are onboarded will allow each employee to clearly know when it is appropriate to take time off, and the potential consequences for not following the policy.
Legal advice
If you have an employee who has demonstrated an unreasonable amount of absenteeism, and want to understand the legal ramifications of dismissing an employee based on these grounds please do not hesitate to contact Legal Kitz to discuss your issue further. You can contact us by phone on 1300 988 954 or email to [email protected]. We offer a FREE 30-minute consultation for all your legal needs.