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by Jen Leigh on February 9, 2021

How to Manage Employee Absenteeism, Improve Revenues and Culture

Employee absenteeism is one of the most significant challenges facing companies, especially amidst today's talent shortage, because it affects productivity and the company's bottom line. In fact, employee absenteeism costs U.S. companies billions of dollars yearly in wages and lost productivity due to poor quality of goods and services.

Due to the multiplying effect of employee absenteeism in the workplace, management must find the root cause in order to properly manage absenteeism in the workplace. Is there a legitimate reason for an absence? Is the employee seeking ways to avoid work? Managers must be aware of patterns of absenteeism and learn how to address them effectively.

Employee Absenteeism and Its Impact on Revenue and Culture

While employee absenteeism is an overall primary contributor to company culture as well as revenue and profit, it more specifically affects four characteristics of a business. 

Employee Absenteeism Kills Productivity

Excessive employee absenteeism can kill and, at times, make your productivity disappear. While it may be the most obvious, the loss of productivity and performance due to excessive employee absenteeism is the biggest consequence due to absence. 

Findings from the Gallup-Healthways Well-Being Index showed that employee absenteeism costs businesses across all industries close to $84 billion in lost productivity annually. Simply put, your employees aren't being productive if they aren't showing up to work.

Employee Absenteeism Can Blemish Your Company Image

The image of a business suffers when the rate of employee absenteeism gets too high. The workload becomes excessive for those who show up, and this can result in rash career path decisions due to added stress and bandwidth. Depending on the industry, it can severely slow down productivity, causing customer dissatisfaction that results in a poor employee experience. 

All of this results in two common occurrences that reflect poorly on company culture, no matter the actual culture of the business. Firstly, it causes applicants and potential new hires to suspect that there is a reason employees don't want to come to work. Even if there isn't one. 

Employee absenteeism also can cause a max exodus from your company. Worst of all, it's the employees that do show up and are tired of being left short-handed that leave. In this way, employee absenteeism is one of the bigger contributors to things such as "The Great Resignation". 

Employee Absenteeism Reflects Poor Workforce Management

Excessive workplace absenteeism could create an impression of poor workforce management from the employers, and any managers working under them. While the presence of poor management can affect things such as productivity and issues with retention and talent attraction, it can also lead to apprehension among employees. Top-performers can suddenly shift into lazy disgruntled workers, that don't respect their employer or manager.

Employee Morale and Employee Absenteeism Go Hand-in-Hand

Excessive absenteeism leads to excessive workload and loss of confidence for employees who show up because they have to stand in for those not available. This could result in anger, resentment, and loss of patience when dealing with co-workers and customers.

How to Manage Absenteeism

Many unforeseen circumstances could result in absenteeism, and this makes it very challenging to tackle. However, you can put in place policies that can minimize this and encourage staff to want to show up in the office. Some of these include:
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Create an Absence Management Policy

According to the Employment Policy Foundation, 50% of leave takers do not provide prior notice. Creating an absence management policy with expectations for all employees that are clearly outlined is a great way to reduce employee absence,

Employee absence policies should include procedures for reporting leave. An accrual management solution is a great way to ensure that. Employers should look for a leave and absence management solution with reports that include who to report to, the purpose of the leave, the number of days permitted, paid or unpaid leave and more.

This will minimize the occurrence of staff staying out without prior notice.

Encourage a Healthy Work-Life Balance

An employee is only as happy as their work-life balance is healthy. So it is essential that employers do whatever they can to promote a healthy work-life balance in order to minimize absenteeism due to illness.

This will allow employees time to attend to other important things and will reduce the rate of employee exhaustion because of excessive workload.

Implement a Mandatory Paid Sick-Leave Policy

This is a practice in many companies. A paid sick leave policy or an unpaid sick leave policy can help give employees more allotted time to take off from work, which will decrease the number of unexpected or last-minute absences. While it won't necessarily decrease absences overall, less unexpected absences is a great first step towards tackling the previously mentioned four challenges of employee absenteeism. 

It is important to also ensure you know your state's leave laws, as your policy may differ as a result. For instance, here is a sample sick leave policy that was designed for Arizona Sick Leave Law.

Provide Support to Employees

You can minimize absenteeism by offering support to your employees with personal challenges, such as bereavement or having mental health problems. Support can be offered during the period of absence and after returning to the office. This would make such an employee feel loved and will want to return to work earlier.

Reduce Employee Stress

Stress can be healthy or counterproductive. Some pressure is needed to bring out the best in your employees, but when it's excessive and toxic, it can lead to burnout resulting in a mental or physical breakdown.

Final Thoughts on Employee Absenteeism and Workforce Management

Creating a workplace as a place where every employee feels respected, wanted, appreciated, and valued remains the best way to manage employee absenteeism. A culture built on these foundational tenets adds value, retention, and loyalty to the company's brand and future revenues.

Employers who are struggling with managing employee absenteeism may want to consider turning to a payroll and HR company in order to better manage their workforce, with a solution such as cloud-based time and labor. To learn more about how Inflection HR is already helping countless businesses with employee absences, contact us today. 

Arizona Leave Management Solution

Jen Leigh

Jen Leigh is a Senior Product Specialist with Inflection HR's Cloud Based HR and Workforce Management Solutions. Connect with Jenni and the rest of the Inflection HR Team on Twitter, Facebook, or LinkedIn.