A New Process for a New Year

January is HR Month. Start the year off right by improving employee absence management tracking.

According to analysts, the average annual cost to employers of unexcused absenteeism is measured in the millions of dollars. These costs affect organizations of all sizes — from the largest Fortune 500 firms to Mom and Pop businesses.

In fact, unscheduled absenteeism has climbed to a five-year high.

Direct and Indirect Costs

Research shows that the total cost of employee absenteeism is greater than the direct payment of wages and benefits paid during an employee’s absence. This is because organizations face indirect cost of staffing, scheduling, re-training, lost productivity, diminished moral, and turnover.

The true costs of absenteeism take into consideration a range of indirect costs including a decrease in productivity. Consider that:

• employees may carry extra workload or support new or replacement staff;
• employees may train and orientate new or replacement workers; and/or
• staff morale and employee service may suffer.

Taking Action

Many companies reduce the costs of unscheduled absenteeism by putting into place an absence management program that accurately identifies attendance trends, monitors employee absenteeism, and fairly applies an organization’s HR policies regarding absenteeism.

But success depends on instituting a process or system that monitors such a program.

An effective system will track whether long-term or short-term absences are more common; monitor the percentage of employees with excessive absences; and let employee attendance patterns trigger attention to individual employees when their absences become excessive.

Setting a Policy

Forward-looking organizations have taken such steps, establishing a company-specific policy that assign “points” to specific attendance “incidents” such as unexcused absence, tardy, early departure, unscheduled leave and others.

As a result, these companies have lowered unplanned absenteeism rates and reduced costs.