5 Ways to Reduce the Cost of Employee Absences

3 min read · 7 years ago


Employee absences carry a heavy cost for many employers. In fact, 75 percent of HR professionals say employee absences have a large impact on revenue and productivity, according to a study last April by Kronos and the Society for Human Resource Management of 700 of its members.

Despite the large costs associated with employee absences, many employers aren’t actively measuring the impact of employee absenteeism. Aon Hewitt’s “2014 Health Care Survey” discovered that only 36 percent of about 1,200 employers surveyed measure the impact of employee absences on their bottom line.

Knowing the driving factors behind employee absenteeism and how to prevent it can help employers reduce costs. Here are five ways to reduce the cost of employee absences:

Related: 4 Factors in Crafting Your Company’s Leave Policy

1. Track employee absences.

Keeping track of employee absences is the first step to reducing costs. According to the Society for Human Resource Management, only 24 percent of respondents said they think their organization accurately tracks the financial liabilities associated with paid leave. Additionally, only one-third of employers use an integrated system for tracking absences.

Use an absence-management system such as TrackSmart or WorkDay to track employee absences. This will help ensure that employees don’t abuse their sick time or go over their allotted number of approved absences.

Related: Don’t Rubber-Stamp Your Company’s Wellness Program

2. Change employee behavior through wellness programs.

There’s a strong relationship between wellness programs and productivity, according to a Towers Watson survey done in 2013 of about 900 employers in North America, Latin America, Europe and Asia. The study found that high-effectiveness organizations with wellness initiatives experienced lower unplanned absences (just 3.3 days as opposed to four days).

Wellness programs can help employees maintain healthier lifestyles so that they don’t miss work. Take steps to create a culture that focuses on healthy living and give employees the tools they need to keep in optimal health.

3. Help employees return to work.

Returning to work after an illness or injury is difficult for people. Yet 64 percent of 50 senior HR professionals across the United Kingdom surveyed last year by QBE said employers aren’t doing anything to help their employees return to work after a health-related absence.

Modify the workplace to accommodate employees struggling with an illness, injury or disability if permitted to do so by their health care provider. Give employees the opportunity to telecommute if needed and provide flexible work schedules.

4. Reduce office stress.

Workplaces are the biggest source of stress according to a 2013 American Psychological Association survey of 1,950 adults in the United States. Not only does stress cause people to miss work, but unplanned absences can create more of it in the office. The Society for Human Resource Management survey discovered that 61 percent of the respondents believed unplanned absences increase workplace stress.

The best way to address this problem is to aim to eliminate stress in the workplace. Create an environment where employees feel comfortable talking to managers about stressful situations and provide tools for decreasing them.

5. Offer a generous paid time-off policy.

Paid time off is a huge benefit for workers. Unfortunately, most American workers aren’t getting the vacation time they need. In a 2013 Expedia stud, 59 percent of Americans said they felt vacation deprived.  

When providing paid vacation time, determine the most common days that people are likely to request. Mondays, Fridays and days before national sporting events or public holidays are the most popular days for unplanned absences, according to 72 percent of the respondents in the Society for Human Resource Management survey. Having an awareness about these popular days will make it easier to budget for paid time off and unplanned absences.

What steps will you take to reduce the cost of employee absences?

Related: Taking Care of Business When an Illness Strikes

Relevant Tags