Cut absenteeism costs in new financial year 2018

Cut costs by focusing on absenteeism this financial year.

Joe Wedgwood Best Practice

We all miss work days at work at some point. It’s inevitable. However, if employees don’t think work attendance is important, they may tend to take advantage of being absent. When this happens, the cost to you and your company is great. By focussing on initiatives and strategies to reduce your absenteeism rates, you will be rewarded with a healthy balance sheet.

What is meant by the term employee absenteeism?

Before we address the cost of absenteeism, let’s focus on the correct terminology used to identify it. Whilst most of us think we know what absenteeism is – it is advisable to have the official definitions so there’s no ambiguity.

It falls into two categories:

  • Planned Absenteeism: Long-term absences, annual leave and other time paid off, vacation leave, staff/workforce development leave, government service leave, routine and other planned medical treatment.
  • Unplanned Absenteeism: Unplanned/emergency absences, short-term absences (not otherwise planned).

Now we know what it is, let’s assess how costly high absenteeism rates are for your business:

The cost of UK absenteeism

According to CIPD,  UK employers can expect to pay at least £500 per member of staff annually. This comes as no surprise! According to the Office for National Statistics, “137 million working days were lost because of sickness or injury in the UK.” This is the equivalent of 4.3 days per worker. For mental health-related absences alone, businesses in the UK can expect to pay up to £8.4 billion a year.

The Department of Public Expenditure’s research on 250,000 workers in Ireland revealed that each full-time Civil Service employee took used 10.2 working days for absences. This equates to roughly €569.64 per year, per employee.

There are also other consequential costs of employee absenteeism that are not financial, but still affect profitability:

  • Low employee morale.
  • Management frustration.
  • Staff disengagement.
  • Negative customer feedback.
  • More employee overtime and workload.
  • Lack of cultural alignment.

Managing employee absenteeism strategies

It is evident that absenteeism is both prevalent and costly in today’s working climate. It is therefore important to focus on the best approaches to combat short-term and long-term absences immediately. This will free up time for you to focus on strategy and innovation, to ensure you really make the most of the new financial year!

Let’s examine some effective prevention strategies:

Create and implement an attendance policy:

To effectively communicate your expectations, it’s advisable to create an attendance policy to ensure fair treatment of all absences. This will let your people know that consistent attendance is expected behaviour for members of staff at all levels. To combat any ambiguity around terms and meanings, you should clearly define everything to eliminate any misperceptions of what is an allowable practice, and what practices may require disciplinary actions.

New-starter onboarding meetings are a good place for you to meet with new employees and discuss the attendance policy. You could enlist other staff members to assist, as it will help reinforce it to them. This is your opportunity to eliminate any misperceptions and discuss the protocols for reporting absences.

Implement return-to-work interviews:

One of the most effective strategies for managing absenteeism is the return-to-work interview. This interview allows you to show support whenever an employee is facing an issue that will require an absence. It also allows you to maintain control of managing absences because it provides a protocol to determine if the employee is ready to return to work. You should document staff absence history, so you can notice patterns and trends over time. You should follow-up with your people as soon as they return to work. This ensures you can quickly determine the nature and severity of the absences.

Create a pleasant working environment:

A carefully designed office will attract and retain staff, improve efficiency through productivity and lower absenteeism rates. A good starting point is creating an ergonomic work environment that will relieve stress, improve posture and increase performance. Ergonomic work environments decrease musculoskeletal health issues that can be catalysts for poor health. Ultimately this leads to absenteeism. When you add in proper lighting, adjustable desks and ergonomic workstations – your staff are sure to appreciate the reduced stress on their eyes and other body parts. All amenities, furnishings and furniture should encourage relaxation and facilitate collaboration and productivity.

It’s important to create an environment that aligns with the work you do. For example, if you work in the health business, then ensure you provide healthy food and you encourage your people to exercise. Failure to do this can result in you compromising your brand and sending mixed messages.

Demonstrate that you care:

People will inevitably have life issues that prevent them from attending work. You can show support by implementing Employee Assistance Programmes (EAPs) that offer referral services. The idea is to help out workers with emotional, psychological and physical needs. EAPs are an effective way to communicate to employees that their health is paramount.

When done effectively, EAPs are highly beneficial. You will create a healthier and happier workforce.  Your business will have an effective resource for dealing with complex absences. You will retain employees who may have a nonwork-related issue that can be resolved or managed with effective intervention. All of which will noticeably improve your absenteeism rates and create a healthier and happier company.

Communicate regularly:

We all have frustrations from time to time. Failure to put an effective system in place to help you understand and remedy these concerns can result in a loss of productivity. The aftermath is an increase in absenteeism. To effectively communicate with your team, you can implement a system so everyone can contact you and create an open dialogue.

By gathering staff feedback via pulse surveys, you can measure the sentiment, happiness and feeling within your organisation. This allows you to build relevant action plans to combat absences and create a happier working environment.

You can’t afford to ignore managing absenteeism

You can have the best business model and the most innovative product – but you won’t be a success if you’re staff don’t show up… Managing absenteeism highlights that you run a professional business with high standards of employee performance. This encompasses employee attendance. The cost of employee absences far outweigh the costs of the preventive measures.

Some of the references and insights were provided by Pierce Ivory on behalf of Advance Systems.


Joe Wedgwood

Marketing Executive at The Happiness Index – Joe is a published journalist and blogger with a passion for employee engagement and HR. He has previous experience working as a language teacher, counsellor and content manager at a recruitment agency.

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