The Cost of Absenteeism

The Cost of Absenteeism

the cost of absenteeism

Absenteeism is an employee’s intentional or unscheduled habitual absence from work.

Imagine a world where all our employees report for duty every day.  There would be no last-minute calls or SMSs feigning illness [cough cough], personal catastrophes [I’m stuck in my garage] or the traumatic passing of a grandmother [again].  You would be able to forecast and plan labour costs accurately, service your customers, deliver products, and achieve unbelievable productivity.

However, in the real world, employees aren’t always going to be able to come to work.  There is no question that employees need sufficient time to rest, to manage a healthy life/work balance, and to handle the inevitable curve balls that life throws at them.  But when absenteeism gets out of control, your ability to accomplish your company objectives is thwarted, and the costs of doing business increase.

The cost of absenteeism is often misunderstood and immeasurable, while being dismissed as a negligible amount – otherwise known as the cost of doing business in South Africa.  According to the International Management Association for Human Resources, the cost of absenteeism represents a growing burden on employers and has a negative effect on the bottom line.  The survey found that the direct costs of paid time off for employees in 2014  – accounting for salaries, overtime and replacement workers – was equivalent to at least 15.45% of payroll.  When indirect costs such as lost productivity and opportunity costs were added, the total bill rose significantly to 20.9% of the payroll.

While employers can expect workers to miss a certain number of work days each year, excessive absenteeism can equate to decreased productivity and have a negative effect on employee morale and overall company service delivery.

Common causes of absenteeism that are often not taken into consideration are:

Bullying: Employees who are bullied or harassed by co-workers or bosses are more likely to call in sick to avoid the situation.

Childcare: Employees may be forced to miss work in order to stay at home to take care of a child or elder when normal arrangements have fallen through.

Depression:  Accordingly to the National Institute of Mental Health, the leading cause of absenteeism is depression.  Depression can lead to substance abuse if people turn to drugs or alcohol, and if they self-medicate in order to manage their pain or anxiety.

Disengagement:  Employees who are not committed to their jobs, co-workers, or the company – and who do not share the company values – are more likely to miss work simply because they have no motivation to be present.

Companies that implement a leave-of-absence policy (a formal system to manage absenteeism consistently) and who track and understand the reason for absenteeism – while providing an opportunity to proactively counteract any trends and implementing an Employee Wellness Program – are most likely to measure and reduce the impact of absenteeism in the work place.

However, the real issue of disengagement is potentially an intangible cause of absenteeism that may only be addressed if the employees’ and company’s mutual values are aligned. Value-driven recruitment is a certain way to reduce disengagement and consequently reduce absenteeism.

If you are not sure how to increase your employee engagement and productivity through a value-driven recruitment processes, we’ll be happy to offer some additional suggestions that will work for your unique circumstances. Contact us straight away on (011) 760 1021 or and take the first step in optimizing your Recruitment process.

By | 2015-11-24T17:59:50+00:00 November 24th, 2015|Recruitment Tips|0 Comments

About the Author: