Pulling a sickie: What are the costs of absenteeism?

Pulling a sickie: What are the costs of absenteeism?

Everyone at work gets sick once in a while, but when your workers are taking excess time away from the office, this can start to have a serious impact on productivity.

Whether your staff engagement levels are low or there are no programs to address workplace wellness, absenteeism is an issue that requires serious consideration.

What are the costs of absenteeism?

While it can be hard to calculate the exact absenteeism costs for each individual business, a report from the Society for Human Resource Management (SHRM) calculated an average figure of absenteeism expenses for Australian firms. 

77 per cent of Australian companies stated that employee absences have an impact on productivity.

The report calculated the direct costs, such as increased overtime payments, Replacement costs as well as the indirect effects like lost time due to the need to reshuffle responsibilities and lost productivity. In total, SHRM calculated that absenteeism costs a company 25.5 per cent of their total payroll.

Beyond this, dishonest absenteeism can have an effect on team morale, creating resentment when a worker is not available or leaving work that requires others to pick up the weight.

With 77 per cent of Australian companies stating that employee absences have at least a moderate impact on productivity and revenue, this is a critical issue that firms need to address, possibly through HR consulting.

How should employers deal with these issues?

With Australia day racking up high numbers of planned absenteeism, the Australian Chamber of Commerce and Industry stated that the effects of even one mass sick day can have a major impact on a business. 

Kate Carnell, CEO of the Australian Chamber of Commerce and Industry, explained that employers do have ways to crack down on the issue, but must balance this with a respectful undertone. 

"Employers have a right to request evidence from employees claiming sick leave such as medical certificates, and if workers exploit the entitlement, we will likely see more employers request these," she said

"Workplaces should operate on the basis of mutual respect and trust. Reasonable employers will not begrudge their staff having a well-earned break but it needs to be done the right way."

All workplaces must work to reduce employee absences. All workplaces must work to reduce employee absences.

However, if your workforce is experiencing a high number of genuine cases of illness, it might be good to enact a workplace wellness program. Research from Cornell University found that a reward scheme supported with "health codes of conduct" successfully encouraged workers to adopt better health habits and take regular visits to the doctor. 

Addressing the root causes of workplace absenteeism is the key to avoiding the costs of lost productivity.