5 Ways to Reduce the Cost (and Impact) of Employee Absence


HR Insights for ProfessionalsThe latest thought leadership for HR pros

Monday, January 31, 2022

Employee absence may be eating into your bottom line, but there are steps you can take to cut the costs.

Article 5 Minutes
5 Ways to Reduce the Cost (and Impact) of Employee Absence

No workforce can operate at 100% capacity each day of every week; with the best will in the world, people get sick, need vacations and experience unforeseen emergencies that take them out of the office.

However, many businesses may be unaware of the true cost of all this cumulative absence. According to the Centers for Disease Control and Prevention Foundation, productivity losses stemming from absenteeism cost US employers an average of $225.8 billion a year.

That's potentially a lot of money coming off your bottom line that finance and management teams may not even be considering when balancing the books.

So what can be done to reduce the cost of time off and its impact on other members of staff, as well as the business as a whole?

1. Plan ahead

Although everyone has their own role in any office, it's vital not to make them so indispensable that the whole company grinds to a halt when they're not there. A plan to provide cover during absence is essential, particularly when key players are down or there's more than one absence at once.

For example, all employees should be required to keep detailed records of their work that can quickly be shared with anyone who needs to pick up the pieces in an emergency, perhaps in the form of 'cheat sheets' in company digital spaces.

Shadowing could be another way of ensuring there are other people around who know each other's roles, while action plans to assign tasks should help to avoid downtime and lost productivity.

Having a pool of freelancers ready to go might be worthwhile, although the average cost of $21 per hour will need to be taken into account if this is the case.

2. Prevention is better than cure

Ensuring employees stay healthy, happy and engaged is another good tip for reducing the costs associated with absence, so make their physical and mental health a priority.

One way of doing this could be to implement workplace wellness programs, as studies have shown strong links between them and productivity. Indeed, according to research by Optum, 79% of employers offer holistic wellness schemes to improve absenteeism, with this type of program reducing absences by as much as 37%.

Aim to create an environment that is as stress-free as possible and ensure workers have the tools to deal with triggering situations as soon as they arrive, whether that's talking to a manager or taking a break.

Paid time off is another essential to prevent presenteeism creeping in, as staff will be less tempted to work when they're ill and won't pass anything contagious around the office.

Even something as simple as making workspaces more homely could help to reduce absenteeism, as a recent study found putting a plant on workers' desks significantly reduced anxiety when compared to measurements before such interventions.

3. Help employees return to work

In instances where someone being absent is unavoidable, having plans for them to return is sensible if you want to keep costs under control. For example, if they're off with a short-term illness, they may be able to work from home after a certain point without any negative impact on their health, lessening their time out.

When they do come back, flexible working hours could ensure they have time to do their job but don't feel too much pressure compared to a full working week.

In cases where long-term absences must be taken into account, workplace modifications might be necessary when employees return. This is particularly important in cases of disability or chronic illness, as the member of staff may be keen to go back to their job but feel unable to do so due to constraints within the office.

4. Beware unauthorized absenteeism

A certain level of absence is unavoidable, but increasing and unusually high rates of absenteeism could indicate employees are taking time off because they're bored, disengaged or just don't want to go to work some days.

The National Institute for Occupational Safety and Health defines absenteeism as absence from work extending beyond what might be considered reasonable, and its rate can be calculated by taking a person's number of absence days or hours and dividing them by the total time of work available, then multiplying it by 100.

Around 1.5% is considered normal, but anything above that could mean staff are taking advantage. Looking for the root causes of this problem and addressing them will help to reduce the costs associated with absence.

5. Set expectations early

Finally, having a clear policy in place with regard to absence and communicating it from the get-go is a great way to ensure employees know what to expect. Let them know you may be tracking their time off using an absence tracking system, for instance, and make it clear that managers must be notified of unscheduled time off as early as possible to prevent unnecessary downtime.

Having follow-up meetings might also help nip absenteeism in the bud and ensure any special requirements are catered for after unscheduled time off.

You might not be able to keep all your staff in the office all the time, but having a clear, carefully monitored plan to manage employee absence will help you stay on top of this challenge and stop the costs from spiraling out of control.

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