People

The Impact of Absenteeism

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It's common for employees to miss work from time to time. However, absenteeism can weigh heavily on productivity, employee experience and even profits. Here's a close look at the impact of absenteeism in the workplace as well as effective ways to mitigate the consequences of unplanned absences.

People miss work for a variety of reasons. Much of the time away that employees take is for planned vacations or personal days. However, when unexpected circumstances require unplanned time off, the impact of absenteeism can weigh heavily on productivity, employee experience and even profits.

According to the Bureau of Labor Statistics, the absence rate from work for full-time wage and salary employees across all occupations is 3.6%. This means that, on average, 3.6% of the workforce is absent from work on regular workdays.

The impact of absenteeism is certainly a big enough problem that organizations should understand how it affects individual, team and organizational performance. Here's a look at what absenteeism means and the different types of it that leaders may encounter.

What is absenteeism?

In general, absenteeism refers to the frequent nonpresence of an employee. Although contributing factors may include scheduled vacations, occasional illnesses and family emergencies, absenteeism due to "no call, no show" can be more detrimental to a company's bottom line as it hampers workplace productivity. Management and teams are usually left scrambling to find ways to cover for the absence. Other behaviors contribute to absenteeism as well. For instance, arriving to work late, taking extra-long lunches and leaving work early.

Absenteeism, in a way, can even include employees who are physically present at work but are doing the bare minimum. This behavior has been referred to as "quiet quitting." Quiet quitters still perform their jobs but don't make the effort to go beyond of what is required of them, such as staying late, showing up early or attending meetings that aren't explicitly mandatory. However, these behaviors may be due to the workplace itself. According to Gallup's State of the Global Workplace: 2022 Report, employee stress is at an all-time high. The report further shows engagement and well-being trends are low and stagnant, and most employees do not find their work meaningful or feel hopeful about the future.

To better grasp this issue, leaders should consider redefining core job responsibilities to identify what work is actually required and what qualifies as extra. This way, leaders can focus on encouraging their workers to perform essential job functions at a high level while allowing the time and space needed to foster well-being.

Impact on individual productivity

Absenteeism can affect individual productivity. Logically, if someone works less, they're likely to be less productive overall. Employers should consider root causes, such as burnout and disengagement, as well as those that may require accommodations, such as child care or illness. If an employee frequently appears "checked out," it could be a sign of low morale and a lack of passion for their work. Organizations should address these issues immediately.

Leaders can mitigate the impact of absenteeism on productivity by actively listening to their employees to gain key insights into the employee experience. This will allow for targeted investments to meet the employees' unique and varying needs, whether it's having a flexible schedule, finding career development opportunities or achieving a higher salary. Furthermore, employees should feel comfortable in expressing any concerns that they may have, and employers should create an environment or a forum where those issues can be heard and addressed.

Impact on team performance

As missed work time increases, other employees in the office may have to make up for the work not performed by employees who are absent, which also lowers overall productivity. This affects managers' productivity, too, as they spend hours per week adjusting workflows to keep things moving.

To counteract the effect of employee absenteeism on team performance, leaders can build morale through team-building exercises, facilitate opportunities for employees to engage with each other and recognize (and reward) workers with strong attendance records to encourage others to follow the same path. Employers should also establish a written policy on absenteeism and communicate it to ensure all employees are aware of company rules and the consequences of unplanned absences.

Impact on profits

Absenteeism has the potential to reduce profit margins in at least two ways:

• Increased costs reduce profit margins unless revenues increase. For example, if organizations are spending more money on overtime pay and contract workers, direct costs go up, and profit margins are likely to shrink.
• Absenteeism can decrease revenue if employees with specific roles aren't present. Employees who sell services or build and deliver a product — such as workers in manufacturing, software engineering, consulting or sales — simply have less time to hit their goals when absent, potentially decreasing revenue.

The impact of absenteeism is felt directly by individuals, teams and the organization as a whole, putting pressure on productivity and profitability. In fact, according to Absenteeism: The Bottom-Line Killer by Circadian, unscheduled absenteeism costs roughly $3,600 per year for each hourly worker.

To mitigate this, HR leaders should focus on organizational performance and employee morale by discovering and addressing the root causes of absenteeism — such as workplace burnout, mental health issues and childcare challenges — and making strides to address those issues with clear attendance policies and wellness programs. This can be done by motivating workers to fulfill their core job responsibilities while creating a culture that welcomes feedback and discussion of employees' concerns and unique needs.

Getting ahead of absenteeism

One way to discover the potential for absenteeism and address it beforehand is for leaders to schedule one-on-one weekly check-ins with each of their direct reports. These check-ins can be in whatever format works, such as a recurring 1:1 meeting, a brief email or text message or through a platform like StandOut.

Why are these frequent touchpoints important? It's simple: improved employee engagement. Highly engaged team members are more likely to come to work, period.

Take this recommendation from Amy Leschke-Kahle, Vice President of Performance Acceleration at The Marcus Buckingham Company, an ADP company, who counsels ADP customers on practical solutions for today's biggest employee engagement challenges: "Really checking in with someone to make sure that there's alignment on what is the most important work that needs to get done" and providing the resources and support they need is critical. At the same time, Leschke-Kahle says, "This provides the opportunity to ask an employee what's on their mind, what challenges they have and to get a read on how they're feeling about their job. That's key insight that could provide a warning if something's not right if the employee needs a schedule adjustment or another type of accommodation, etc. That gives the leader and the employee the chance to address the challenge or need before it affects attendance."

Learn more

Discover better employee engagement today with ADP's StandOut, a user-friendly platform that helps build engaged, high-performing teams and improve local team connectivity with strengths-based assessments, frequent team check-ins and personalized coaching for leaders.