Published: Jul 03, 2019

Absenteeism can not only affect day-to-day operations but also an organization’s bottom line. According to the Center for Disease Control (CDC), missed work can cost organizations over $225 billion each year. Needless to say this is a pressing issue and, although it affects many companies differently, it’s worth looking into a bit more deeply. Here are a few things to consider if you’re trying to get a practical handle on your organization’s status with unplanned absences:

car on road rubber hitting road with unplanned absence concept

Understanding your absence number

First things first, you need to understand what your annual average absentee rate is. How do you do this? Well, if you have an automated HCM solution you should be able to run some reports or analytics to get this number. But if you’re not lucky enough to have such tools then dust off your trusty scientific calculator and use the following formula to calculate your annual average absentee rate:

((# of unexcused absences)/12) X 100

So what’s a good absentee rate? Don’t say zero, that’s not realistic. However, a good practice would be to benchmark your rate against other companies within your industry, which is possible thanks to the Bureau of Labor Statistics.

Why are employees calling out?

The next step is to take a deeper dive into your absence data to get to the bottom of why employees may be calling out. Again, an automated HCM solution should help you dig into your data and even visualize it to make it easier to identify trends. You might start to see a spike in absences during certain times of year or events like big show finales or the super bowl or even warmer weather. Once you’ve isolated the trends that are important for your organization, it becomes easier to prepare your schedules accordingly to absorb the absence impact or even come up with some incentives or engagement plans to encourage more employees to stay at work during those peak times.

What can you do about it?

Every company’s culture and employees are different, so you have to determine what works best for you.

  • First, take a good hard look at your existing policies and ask yourself if they may be causing unexpected absences. For example, if your policy allows employees 5 sick days and after that disciplinary actions are taken – what happens to the employee who gets a bad case of the flu and needs to take more sick time that they are allowed? With that scenario in mind, there may be a way that you can provide more flexibility while maintaining the proper amount of allocated time off per employee. For example, combining all PTO into one bucket will give employees more flexibility around how their time off is used.

  • Perhaps you find that your rules a pretty flexible, but you are still seeing spikes in unexcused absences. That’s when you can take a two-pronged approach. Implement a points system to track unexcused absences and determine the threshold at which disciplinary action should be taken. Also implement some kind of incentive program to reward attendance. This doesn’t have to be very costly; you could recognize the employee via email or a newsletter and also provide a $20-$25 gift card for gas, the movies, a local café, etc.

The key to making any changes you want to implement successful is to clearly communicate them to employees, so spread the word.

The bottom line is that absenteeism is costly and although it’s not totally controllable there are things you can do to minimize it. Before you make any changes to policies or roll out new programs you’ll want to understand your annual average absentee rate as compared against your industry peers. You may find that you’re in line with industry standards or that you’re not, but either way it will be valuable for your to dig into your absence data and take a hard look at why your employees are calling out. Armed with that information, you can begin to review policies to see if you can create some flexibility to address absenteeism or implement some disciplinary and reward programs. Then communicate any changes early and often.

A unified HCM system can help you do all of this in one place, so if you see the value in addressing your organization’s unplanned absences, it’s worth it to see the other kinds of value you can gain from adding the right HCM technology to your organization’s ecosystem.