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What is Employee Absenteeism? How Can You Manage It?

Shanzaib Malik
an image depicting employee absenteeism

The show must go on, as they say, even when your employees don’t show up. A few days of “sick leave” is manageable—even a planned vacation or two won’t sink the ship—but when employees’ absences become habitual, you have a bigger problem on your hands: absenteeism.

What is employee absenteeism and how can you deal with it effectively? Let’s break it down and find out.

What is Employee Absenteeism?

Employee absenteeism is the recurring absence of an employee, usually done with short or no notice. They could be dealing with a serious illness, depression, or so stressed, they don’t want to come into work. But whatever the cause, the effect is clear: their desk is regularly empty, they make frequent excuses, and their absence is slowing down your business’ productivity.

How Does Employee Absenteeism Affect Your Business?

Chronic absenteeism sinks into your business’s profitability, for the simple fact that fewer employees means slower production.

How much does it cost? Different studies give different numbers, but one thing unites them: it’s a lot.

The CDC, for example, says absenteeism costs U.S. employers about $1,685 per employee, which comes to about $225.8 billion each year. The Integrated Benefits Institute, on the other hand, puts the number a little higher: they found that absenteeism related to poor health costs U.S. employers around 1.5 billion days, which translates to around $575 billion.

Money’s not everything, however. Absenteeism also takes its toll on your staff: when an employee doesn’t show up, someone has to pick up the slack. And if you’re frequently giving out additional responsibilities, employees not suffering from absenteeism will start to feel overworked, especially if they’re forced to do jobs they don’t know well.

The feeling that you’re always on call, coupled with the frequent absence of specific people, can wear employees down fast, leaving employers with not only a team of low morale, but higher retention rates, too.

What Causes Employee Absenteeism?

First off, let’s be clear: employee absenteeism is not a personality trait. To say that Derrick doesn’t show up to work because he’s “that kind of person” is to oversimplify the problem and vastly ignore underlying issues that are keeping Derrick, and others like him, from working at their highest potential.

So, what’s causing it? Most cases of absenteeism have five underlying causes: health problems, financial stress, disengagement, burnout, and family issues.

1. Health Problems

By health problems, we’re not talking about the common cold or the flu (or even coronavirus). Health problems associated with absenteeism are chronic: back pain, carpal tunnel syndrome, heart conditions, high blood pressure, diabetes, obesity, and lung conditions from smoking can keep even the best of employees from coming into the office.

Chronic health problems cost U.S. employers around $36.4 billion a year, says the CDC. What’s worse—most of the time, these health problems can be treated or prevented, but employees are too strapped for cash to get treatment.

2. Financial Stress

It’s no secret: employees who stress excessively about money perform worse and take more time off than those who are financially stable. From paying off debt to managing stacks of medical bills to not saving enough for retirement, most employees stress about money more than anything else—including their jobs.

Employees who feel financially stressed are twice as likely to use sick time when they’re not sick, says a report by Lockton Retirement Services. And considering that one in four employees say their financial situation has worsened since the pandemic, absentee rates from financial stress will only get worse.

3. Disengagement

Employee disengagement is a big problem in itself, costing U.S. employers, according to Harvard Business Review, around $450 to $550 billion a year. But one of the obvious signs of disengagement is—yep—frequent absences.  

It makes sense. Employees who feel underappreciated or undervalued will feel less motivated to come into work. Coupled with a lack of respect for a manager or leader, as well as the feeling that they don’t quite fit into the culture, and you could have a chronic absenteeism on your hand.

4. Burnout

Herbert Freudenberger, who first coined the term burnoutin his book, Burnout: The High Cost of High Achievement, defines it like this: the extinction of motivation or incentive, especially when one’s devotion to a cause or relationship fails to produce the desired results.”

You can imagine what that does to absenteeism: When employees feel constantly overworked, unhappy, stressed, bored, or stuck in their role, it becomes increasingly difficult for them to show up.

5. Childcare & Eldercare

Employees who have young children or elderly adults living with them may skip work more frequently to take care of their families. USA Today, in fact, found that, in 2020, the number of absences related to family care skyrocketed by 250%, with roughly 67,000 people per month saying child care led to an absence at work.

How Can You Reduce Employee Absenteeism?

One way to reduce absenteeism is to offer the right mix of employee benefits. Not only will this show employees that you care about their concerns, but it’ll also help them solve their individual problems.

Which employee benefits should you offer? Here are five big ones.

1. Flexible Work Schedules

Often employees don’t show up to work simply because they can’t fit their personal responsibilities and obligations around their mandatory work hours.

For these employees, cutting absentee rates may be as simple as offering more flexible work options. Remote work, allowing employees to choose their hours, and even offering shorter work days can motivate employees to come into work more often, as they’re not constantly excusing themselves to take care of their personal matters.

2. Salary-Linked Loans

Financial stress arises, above all, from a deep fear of not having enough money. And at a time when employees are stressing about money on the clock three times more than their jobs themselves, it’s time to offer them some security: a healthy loan option.

Don’t underestimate the power of a healthy loan. If you don’t provide a safe way to borrow money, employees will turn to high interest credit cards, loans with ridiculous fees, or, worse, their 401(k), all of which keep them in debt longer and exacerbate financial worries.

A salary-linked loan, on the other hand, allows employees to borrow from future paychecks, typically at a lower interest rate than personal loans. This helps employees deal with emergencies when they happen, leaving them less stressed about their finances and more motivated to come work for you.

3. Childcare & Eldercare Assistance

Employees who act as caregivers miss around twelve hours per month because of caregiving responsibilities, says a report by Bank of America.

So how can you help? Harvard Business Review, in their excellent study on caregiving in the workplace, suggests creating a “culture of care.” That means providing employees with “accommodative benefits” (flextime, work from home options, maternity and paternity leave), as well as “appropriative care” (subsidies for child or eldercare services, caregiving support groups, counseling services, provider services).

At the very least, ask your employees what caregiving problems they have. Then, depending on their answers, work with them to create an effective solution: the more you help them take care of their kids or elders, the less likely they’ll make excuses to leave.

4. Workplace Wellness Programs

To treat the large portion of absentee employees struggling with health problems, consider offering wellness benefits, such as health coaching, subsidized gym memberships, addiction recovery programs, healthy catered food, or health seminars and classes.

Pay attention to mental health problems, too: depression and anxiety can be just as potent as physical health problems. To help combat these, offer reimbursed counseling sessions, as well as encourage employees to speak to one another about their mental health. Sometimes, all you need is a good listener and a strong community to feel better about yourself.

5. Unlimited PTO

Now, we know what you’re thinking: wouldn’t unlimited paid time off encourage absenteeism? How could giving employees unlimited PTO going to brink absentees back?

It’s an odd paradox, sure, but according to many employers, unlimited PTO hasn’t led to a mass exodus of vacationing employees. Most employees take the same amount of vacation, some a little more, and others, believe it or not, take even less time off.

The real value of unlimited PTO is that it gives absentee employees time to fix whatever is distracting them from working. Not only that but it can also help employers navigate missing people, since employees still have to request time off from their managers.

How Stately Credit Can Help Employee Absentee Rates at the Workplace.

Absenteeism isn’t going away soon. In fact, it’s getting worse.

USA Today reports that, in 2020, an average of 1.5 million people per month missed work due to medical problems, up by 45% when compared to the last two decades. Even more shocking: 2.5 million missed work for unspecified reasons, which was double the monthly average from 2000 to 2019 (1.27 million).

To deal with absenteeism, you need an arsenal of benefits, especially ones that can help employees deal effectively with financial stress.

That’s where we come in.

At Stately, we offer a low-interest, salary-linked loan that helps employees deal with expensive emergencies without causing a financial crisis. Our loans have no hidden fees, and since they come at no cost to you, they’re one of the least expensive financial benefits you can offer.

Apply today to get started, and let’s help your employees deal with the financial stress that keeps them from working at their best.

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