The true cost of Absenteeism and how to reduce it
Absenteeism is a problem that can sometimes slide under the radar, especially in larger organisations with hundreds or thousands of employees, and is often thought of on an individual level, with the true cost being somewhat overlooked.
The fact is that lost working hours can lead to significant financial loss and affect a business’ bottom line.
The UK’s largest annual survey of sickness absence rates and costs showed that, in 2015, the average employee took 5.8 days’ sickness absence – equivalent to 2.6 per cent of their potential working time. While the report, compiled by XpertHR, does show that absence rates are falling – with the percentage of working time lost being 3.5 per cent 10 years ago – any financial director will see room for improvement!
The same report found that the average cost of sickness absence in 2015 was £455.95 per employee. In manufacturing and production, this was £523.32, and the sum was significantly higher for public sector employers, who recorded a cost of £819.63. Times this by your hundreds or thousands of employees and you’ve got a pretty hefty figure on your hands.
Of course, many cases of sickness absence will be unavoidable and related to medical complaints. However, it’s worth considering other contributing factors that can be tackled by management, such as workplace bullying, issues related to childcare and general lack of motivation and job satisfaction. By implementing certain procedures and improving the workplace culture, employers can help to avoid unnecessary absence, increase productivity and save money.
Here are four ways to reduce levels of absenteeism.
- Attendance incentives
Rewarding employees for 100 per cent attendance in a year is tried and tested yet gentle method of motivating staff to clock in each day. It’s important, however, not to go the other way and berate or punish employees for absence. We’re increasingly finding that this is counterproductive – not only because it’s not encouraging, but also as it leads to fear of staying off while genuinely unwell, which in turn leads to the spread of illness throughout the company and further absence.
- Effective HR software
Investment in comprehensive absence management software can enable businesses to accurately track levels of absence and identify trends easily so that, where possible, appropriate measures can be put in place. It also gives your employees responsibility for checking their leave allowance, recent clockings and flexitime entitlements. Such autonomy and control over their own leave is likely to inspire improved attendance levels, while freeing up HR departments to concentrate on the wider people strategy.
- Flexible working
Rigidity of working hours and on-site attendance can naturally lead to instances of absence. For the sort of jobs where this is possible, it may be worth offering more flexible hours or opportunities to work from home. Those who have children to take to and from school, or have other family care commitments, for example, could benefit greatly from a change in scheduled work hours and actually have more time and energy to focus on their role while working an alternative shift.
- Improved working environment
It’ll come as no surprise that an engaged workforce who feel valued are more likely to be motivated to come into work each day and contribute to the organisation. You can find out more about this on our blog on the importance of strong people management.
Of course, absenteeism is just one cause of lost income and there are lots of other ways to reduce costs; however, the figures above show the acute financial impact it can have on organisations, so try where possible to implement some of the above and you might just see your attendance – and profit – skyrocket.
To chat to us about managing time and attendance in your business, give us a call on 01904 565 919, or get in touch via email.