How to Assess the Cost of Absenteeism in Your Workplace

The costs associated with long- and short-term absenteeism are difficult to quantify. It will be necessary to consider a variety of different factors when assessing the losses from unscheduled absences. There are direct and indirect costs with the indirect ones being the most complex and hardest to assess.

Workers who are routinely absent can cause thousands or even millions in losses for their employer. Furthermore, the costs associated with unscheduled absences are increasing.

According to Forbes Magazine, the cost of absenteeism has been calculated to cost each salaried employee $2,650 on a yearly basis and costs hourly paid employees $3,600. Even for a small business owner, the expenses from absent workers can rapidly escalate to the point where they may make up as much as 4 percent of annual payroll expenses. Here are some areas where absenteeism can affect a business.

Direct Costs of Absenteeism

Impacts on Productivity

Your business relies on its full-time employees. These are the people with the most experience when it comes to performing the essential day-to-day tasks. As a result, it is not possible to replace an absent full-time worker with a temporary employee and see the same level of productivity. It is therefore important to factor in the effects on productivity when calculating the cost of absenteeism.

Increased Overtime Salary

When members of staff are required to complete their own tasks as well as those of absent workers, they will spend more time at work. As a result, overtime pay is one of the direct costs of absenteeism.

Indirect Costs

Low Morale

Absenteeism is a factor in problems like poor morale and the lack of a team culture within a workforce. Workers who are incapable of performing the tasks in their job description add to their coworkers' workloads. Teams are unable to accomplish objectives because of missing members. Absent workers make the work environment more stressful for other employees and lessen employee engagement.

Poor Customer Service

Another effect of regular absences is the fact that customers may not be able to contact their customer service representative. In addition, they may have to deal with temporary workers who are unable to answer their questions in a timely manner. This tends to result in unhappy customers and lost sales, which you will have to include among the costs of absenteeism. 

While it is impossible to eliminate absenteeism, it is controllable. With the use of time tracking devices & absence management software, you can mitigate the impact of absences on your organization to keep things running smoothly.