Managing Absenteeism and Tardiness
One of the greatest struggles of employers is managing absenteeism and tardiness. A single employee absence from work without advanced notice can impose a financial burden on business and low morale amongst the workforce. Occupations that require employee attendance (except in situations of advance notice) include physicians, lawyers, machine operators, delivery personnel and many more. Let’s take a moment to learn about types of leave, whether or not they are required by law or optional, the importance of effective attendance policies, and the average cost of absenteeism.
Types of Leave (both optional and required)
FMLA (Family and Medical Leave Act): Required of companies with 50 or more employees within a 75 mile radius. To be eligible for this type of leave, employees must work 12 months or a minimum of 1,250 hours in the 12 months preceding the leave.
Short/Long Term Disability (STD/LTD): Required if medical excuse is provided, but position does not have to be held for employee’s return from leave. Some companies offer STD and/or LTD insurance to employees which in most policies provide income to injured employees immediately and ill employees after a waiting period (5 – 7 days is typical). It is classified as absence from work due to personal illness or non-work related injury.
Personal Leave: Not required of employers, but an optional value added benefit which allows employees to take unpaid time off for reasons such as education, travel, or family matters.
Military Leave: Required by law to allow employees to participate in military service.
Jury Duty: Required leave (except in extreme circumstances where the absence of the employee will be detrimental to business) for the duration or a jury selection and trail
Bereavement Leave: Allows employees to arrange and/or attend a funeral of a deceased immediate family member.
Vacation: Not required for employers, but a value added benefit which allows employees to take a limited period of paid time off.
Sick Time (paid or unpaid): Not required of employers. Allows employees to take time off for doctors’ appointments and recuperation from illness. This is highly recommended to prevent the spread of germs within the workplace for illnesses and also encourages employees to be healthy by seeking medical care as needed.
Importance of Effective Attendance Policies
An organization can significantly reduce the impact of employee absences by carefully planning and designing policies, managing absenteeism and its administration, and tackling the underlying causes (e.g., health issues, employee morale).
Typical policy components: Good attendance and punctuality are essential components of solid employee performance and are measured by objective standards set forth in attendance policies. Policies include the definition of absences, the procedures for reporting time off, and repercussions for excessive or unreported time off.
Rewarding good behavior: JADCO recently distributed $200 Visa gift cards to employees who had perfect attendance in a 6 month period. Other ideas for rewarding positive attendance are granting free vacation days, providing lunches, or merely presenting employees with certificates of gratitude.
Managing illness related work absences: The key to managing absences is tracking attendance. If attendance is constantly and consistently monitored, the organization’s policy will be easy to follow.
Return to work fitness for duty exams: JADCO requires employees to participate and pass Return to Work Fitness for Duty Exams before returning from a leave which resulted from a non-workplace injury, surgery, or an illness lasting more than 5 days.
Benefits: The major benefits of managing lost work time due to absences are reduction in lost production and income and improvement in employee morale.
EAP (Employee Assistance Plan): Many companies are offering employees access to EAPs, who help with a variety of work and home situations. In relation to this particular blog, EAP organizations can give employees ways to improve their attendance. JADCO recently hired Lytle EAP from Pittsburgh, PA to assist employees and their dependents. The benefits of these programs are guaranteed to outweigh the cost by a landslide!
Calculating Absenteeism Rates and Average Associated
How do you calculate the absenteeism rate? The example below shows a clip of an Excel spreadsheet with formulas to calculate the rate. You must record the number of lost days due to absence in the given month, the average number of employees in that month, the number of work days, and the spreadsheet does the rest! The Absenteeism Rate is then calculated like this…
How do you calculate the average cost of absenteeism?
According to an October 2008 Mercer survey the estimated cost of employee absences amounts to an average of 36 percent of an organization’s payroll.
The following example for calculating absenteeism cost is provided by SHRM (Society for Human Resource Management)
A company with 1,000 employees paid an average of $50,000 per year would have a payroll cost of $50 million. If the total absence cost mirrors the average of 36 percent identified by Mercer, this company could have a total absence cost as high as $18 million when all types of absences are factored into the calculation:
1,000 employees x $50,000/year pay = $50 million payroll cost
$50 million x 0.36 = $18 million total absence cost
When planned absences for desirable benefits such as vacation time and holidays—which average 27 percent of payroll—are removed from the calculation, this sample company would have a much lower, but still high, total absence cost of $4.5 million.
$50 million x 0.09 = $4.5 million total absence cost
Even a modest reduction in unplanned absenteeism can result in tremendous savings for such a company: A 1 percent reduction in the cost of absence equals nearly half a million dollars.
Posted on 09/14/2012 at 12:00:00 AM