The Causes and Costs of Absenteeism

What Is Absenteeism?

Absenteeism refers to an employee’s habitual absence from work. It goes beyond any absences related to things like occasional sickness, vacations, and other personal time. While a few absences here and there don’t normally pose a problem, absenteeism can, especially when an employee doesn’t show up to work unexpectedly for extended periods of time. Absenteeism can be due to a variety of factors, including preventable workplace injuries, chronic health conditions, and employee mental health.

While employers generally expect workers to miss a certain number of workdays each year, excessive absences can equate to decreased productivity and can have a major effect on company finances, morale, and other factors.

Key Takeaways

• Absenteeism refers to an employee’s habitual absence from work beyond the expected need for sick days or time off.
• Some of the main reasons for absenteeism include workplace harassment, family-related issues, illness, and job hunting.
• Absenteeism can result in higher costs for employers due to lower productivity.
• Other employees often have to fill in for missing employees, which can lower morale and increase costs due to unexpected overtime payments.

Causes of Absenteeism

People miss work for a variety of reasons. Some of the common causes of absenteeism include, but are not limited to:

• Bullying and harassment: Employees who are bullied or harassed by coworkers and/or bosses are more likely to call in sick to avoid the situation.
• Burnout, stress, and low morale: Heavy workloads, stressful meetings and/or presentations, and feelings of being unappreciated can cause employees to avoid going into work. Personal stressors from outside the workplace can also lead to absenteeism.
• Childcare and eldercare: Employees may be forced to miss work to stay home and take care of a child or elder relative when normal arrangements aren’t available or if the dependent is ill or hurt.
• Depression: According to the Centers for Disease Control and Prevention, a leading cause of absenteeism in the United States is depression. Depression can lead to substance abuse if people turn to drugs or alcohol to self-medicate their pain or anxiety.
• Disengagement: Employees who are not committed to their jobs, coworkers, and/or the company are more likely to miss work simply because they have no motivation to go into the office. Unpredictable schedules or a lack of control over workflow can lead to disengagement.
• Illness: Injuries, illness, and medical appointments are the most commonly reported reasons for missing work—though not always the actual reason. Each year during the cold and flu season, there is a dramatic spike in absenteeism rates for both full- and part-time employees.
• Chronic health conditions: Employees who must manage chronic health conditions are likely to miss work unexpectedly.
• Injuries: Accidents can occur on the job or outside of work, resulting in absences. In addition to acute injuries, chronic injuries such as back and neck problems are a common cause of absenteeism.
• Job hunting: Employees may call in sick to attend a job interview, to visit with a headhunter, or to work on their resumes.

Costs of Lost Productivity

Absenteeism lowers workplace productivity and can have tremendous costs to a business. Decreased productivity due to chronic diseases and injuries costs employers in the U.S. more than half a trillion dollars every year. In 2018, preventable workplace injuries alone cost employers more than $170 billion in lost productivity.

The Gallup-Healthways Well-Being Index surveyed 94,000 workers across 14 major occupations in the U.S. in 2012. Of the 77% of workers who fit the survey’s definition of having a chronic health condition (asthma, cancer, depression, diabetes, heart attack, high blood pressure, high cholesterol, or obesity), the total annual costs related to lost productivity totaled $84 billion.

According to the survey, the annual costs associated with absenteeism vary by industry, with the greatest loss occurring in professional occupations (excluding nurses, physicians, and teachers)—the 14 occupations and corresponding costs of lost productivity are shown below.

Annual cost of lost productivity by major U.S. occupations

According to Absenteeism: The Bottom-Line Killer, a publication of the workforce solution company Circadian, unscheduled absenteeism costs roughly $3,600 per year for each hourly worker and $2,650 each year for salaried employees. The costs can be attributed to many factors including:

• Wages paid to absent employees
• High-cost replacement workers (overtime pay for other employees and/or temporary workers)
• Administrative costs of managing absenteeism

Other indirect costs and effects of absenteeism include:

• Poor quality of goods/services resulting from overtime fatigue or understaffing
• Reduced productivity
• Excess manager time (dealing with discipline and finding suitable employee replacements)
• Safety issues (inadequately trained employees filling in for others, rushing to catch up after arriving as a replacement, etc.)
• Poor morale among employees who have to fill in or do extra work to cover absent coworkers

Debate Over Mandatory Sick Days

Some companies, cities, and states have moved toward a mandatory paid sick leave policy, where each employee receives a specified number of days off each year to use for illness or injury.

Opponents of mandatory sick leave argue that it will ultimately cost businesses more money and lead to increased layoffs. In addition, opponents have concerns that employees will use all their sick days whether or not they need them. Advocates of such a move, however, argue that paid sick leave makes economic sense because it will help stop the spread of communicable diseases in the workplace, resulting in fewer instances of absenteeism in the long run, and that sick employees will be able to recover and return to work sooner.

The Centers for Disease Control states that paid sick leave could have an especially significant impact in the food service industry, where it estimated in 2019 that infected food handlers were responsible for 40% of norovirus and salmonella outbreaks from contaminated food. One sick food handler could theoretically infect dozens or even hundreds of people, resulting in a large number of absences that could be avoided if that employee simply stayed home.

Important

Many employees still go to work even when they’re ill because they need the money or because they fear they may be terminated for missing work.

Overall, paid sick leave tends to save employers more than it costs them. Research has also found that offering a paid sick leave policy could save employers $0.63 to $1.88 billion per year due to reduced absenteeism.

What Employers Can Do

Absenteeism is a difficult problem to tackle because there are both legitimate and poor excuses for missing work. Unless a company requires a written excuse from a doctor, for example, it can be difficult to determine if an employee is actually sick when missing work.

However, requiring or encouraging employees to work while sick or injured can still cause businesses to lose money due to lost productivity, a phenomenon known as presenteeism. Sick employees at work can also spread an illness to their colleagues, resulting in more widespread decreases in productivity and a greater decline in the available workforce.

Rather than monitoring employee’s reasons for missing work or requiring employees to come to work when sick or injured, there are broader steps employers can take to reduce absenteeism and improve workplace productivity.

Comprehensive Health Programs

A comprehensive and proactive approach to employee well-being can improve productivity and reduce absenteeism. These approaches focus on a variety of employee health concerns, including:

• Physical health
• Mental health
• Work-home balance
• Environmental health
• Economic health
• Workplace safety

The logic with this approach is that happier, healthier employees will be more able and motivated to go to work each day, resulting in increased productivity and higher morale for the individual workers as well as the entire team. Although these employee wellness strategies may be expensive to implement and maintain, they can have a net positive effect on a company’s bottom line—and that’s good for business.

When L.L. Bean, a major retailer of outdoor clothing, shoes, and equipment, implemented a comprehensive program to address and promote employee well-being, it experienced a positive return on investment. The company reported savings of up to $5.30 for every dollar invested in the program.

Programs that help employees reduce stress both in and out of the workplace can have a significant impact on absenteeism and productivity.

Workplace Flexibility

Increasing workplace flexibility can also improve worker productivity and lower instances of absenteeism. Allowing an employee with a sick child to leave early or work from home, for example, rather than requiring them to take a personal day, can create an environment where more work can get done.

Increased workplace flexibility has been associated with increased employee loyalty, lower stress levels, and greater productivity. Costs to employers were lower in more flexible environments because workers were able to remain engaged and present when they would otherwise have to take time off work, leading to fewer missed deadlines.

Predictable Scheduling

Unpredictable or demanding schedules decrease worker well-being, leading to higher rates of stress, depression, illness, anxiety, and burnout—all factors that contribute to absenteeism. Feeling insecure in your job or a lack of control over your work also leads to lower employee engagement and higher rates of absenteeism.

Employers who provide regular schedules, by contrast, give employees a sense of control over how and when work gets done. This leads to employees feeling more engaged and increases employee well-being, both of which are associated with lower rates of absenteeism.

The Bottom Line

Occasional absences from work are inevitable—people get sick or injured, have to take care of others, or need time during business hours to handle personal affairs. But regular absenteeism costs U.S. companies billions of dollars each year in lost productivity, wages, poor quality of goods/services, and excess management time. In addition, the employees who do show up to work are often burdened with extra duties and responsibilities to fill in for absent employees, which can lead to feelings of frustration and a decline in morale.

The most effective policies for minimizing absenteeism are those that promote employee well-being and satisfaction. By providing paid sick leave, comprehensive health programs, regular schedules, and workplace flexibility, employers can reduce the costs associated with absenteeism and create a more engaged, productive workforce.

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