Success in business — regardless of your industry and the size and nature of your organisation — always depends on people.

You need a strong, reliable workforce if you want to deliver for your clients, stay one step ahead of competitors and keep up with the latest trends, challenges and opportunities in your sector.

For this reason, tracking and managing absenteeism in the workplace should be a priority for employers. Workers taking unscheduled time off (in other words, not including annual leave and holidays) is an unavoidable aspect of running a business. Still,excessive, unexpected absenteeism has several undesired effects, including lack of productivity and loss of morale.

To understand the scope of your absenteeism problem, you must first review attendance metrics. Then explore the reasons why your employees are calling off work. Only then can you create a strategic action plan to reduce worker call-offs and improve your bottom line.

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absenteeism: understanding and managing a critical issue.

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measuring the absenteeism rate

The formula for absenteeism compares available workdays to absences over a set period. You can record employee attendance data on an individual, departmental or geographical level. Here’s a simple case study for one employee who was expected to work 260 days last year. (When counting available work days, ignore any holidays or planned vacations.)

During the year, the employee called off 15 days.

15 / 260 x 100 = 5.7% absenteeism rate

Absenteeism rates vary by industry, region and time periods. BusinessNZ and Southern Cross Health Insurance have unveiled the findings of their biennial Workplace Wellness Report and the data reveals that if you’ve observed a higher rate of absence in your workforce, you’re not imagining it. The report found that the current rate of employee absence now stands at an average of 5.5 days per employee, equating to a total of 10 million working days lost annually. 

You can quickly spot unwelcome trends in your business by tracking the absenteeism average rate for your employees. You’ll also be able to compare your workforce to others of similar size and industry.

Whether you have a current employee attendance problem or want to proactively work at lowering your rate, you need to understand the main causes of absenteeism before you can work to reduce it.

physical injury and illness

Physical complaints of some description — commonly in the form of injury or illness — account for a large proportion of workplace absences. The COVID-19 pandemic provided an extreme example of how physical illness can have a devastating impact on workforces. 

However, despite vaccines and work-from-home strategies, workplace absences are still increasing. According to a January 2022 report from the U.S. Bureau of Labour Statistics, approximately 7.8 million workers were absent from their job due to a medical issue, whether it was an illness, injury or appointment. 

According to 2022 statistics in New Zealand, the count of employed individuals taking sick leave, absent due to illness or injury, surged by a remarkable 67% compared to the corresponding quarter of the preceding year. When considering additional factors contributing to absenteeism, such as mental health issues, personal family matters, burnout, stress, low morale, disagreements with management decisions, and even instances of denied annual leave, the cumulative impact on a business can be substantial.

With worldwide obesity on the upswing, impacting almost 39% of adults in 2019, its associated health risks are also rising, increasing absenteeism and presenteeism in the workforce. For example, 2022 statistics found that Brazilian workers cost companies, on average, 2.21 billion U.S. dollars in absenteeism costs due to obesity. Spain and Mexico were just slightly behind at 1.84 and 1.68 billion, respectively.

Furthermore, research among working adults in Portugal found that obesity and its related health risks were a contributing cause of reduced employee attendance, with workers missing 66% more days of work than their non-obese counterparts.

how to help employees stay healthy

Taking active steps to help your employees remain physically fit could be just as beneficial for your business as for individual workers. Consider strategies such as:

  • introducing incentives or gamification schemes that encourage employees to walk or cycle to work
  • making sure people with sedentary jobs take regular movement breaks
  • promoting health awareness days and events like World No Tobacco Day
  • providing healthy snacks for free or at a low cost
  • staffing a workplace clinic for on-site health visits
  • including wellness programmes in employee benefit packages

One example of a company working to improve employee health is Nomura International. The Tokyo-based banking firm was a 2022 winner of Britain’s Healthiest Workplace, an honour it has received several times.

Some of the company’s progressive programmes include an on-site gym and clinic staffed with various health professionals, smoking cessation support, healthy food options at economical prices, cycle bays for commuters and mindfulness awareness sessions. 

Not only does Nomura reap the benefits of healthier employees and consequently reduced absenteeism, but it also uses these wellness programmes to recruit and retain top talent.

mental health difficulties

Gone are the days when physical illness was seen as the only legitimate reason for people to take unscheduled time off work. In recent years, there has been increasing recognition that good mental well-being is just as important as physical health for people to do their jobs well. 

Recent statistics from the World Health Organisation estimate that 12 billion working days are lost due to mental health concerns like depression and anxiety. This equals a loss of productivity amounting to 1 trillion U.S. dollars.

A report from the Australian Productivity Commission set the annual figure for the cost of absenteeism and lost productivity at AU $17 billion (U.S. $13.6 billion).

Gallup’s State of the Global Workplace 2022 found that worker stress has reached an all-time high. And while not all stress is caused by work, it most certainly is present while at work. Daily emotions of anxiety, worry, anger and sadness take a toll on workers and, consequently, their coworkers and overall productivity.

McKinsey Health Institute cites that 25% of global workers are experiencing burnout, a significant cause of employees quitting or missing work. Additionally, 59% of workers surveyed admitted to at least one mental health challenge.

Man showing a paper to a woman
Man showing a paper to a woman

So, what can you as an employer do to acknowledge the importance of this issue and help your employees stay mentally well? 

how to reduce mental health absenteeism

Follow the steps below to support good mental health in the workplace. You’ll likely recoup any investment in mental health resources for your workforce with improved employee attendance. What's more, presenteeism — when employee productivity declines because people come to work despite being unwell — will also become less common.

  1.  frank and honest conversations about the subject can reduce stigma and encourage workers to speak to their colleagues or managers when they need help
  2. make sure your workplace isn’t contributing to mental health difficulties and excess stressors. That means addressing toxic behaviours immediately and decisively
  3. support your staff with resources like workshops, seminars and online materials around mental health
  4. include mental health treatments and counselling in benefit packages
  5. encourage healthy practises like regular exercise and eating well

Download our comprehensive guide to find out more about absenteeism. 

bullying and harassment

If bullying and harassment exist in your workplace, you'll also see higher-than-average rates of absenteeism because people experiencing these issues may take time off because of the resulting stress and anxiety.

Unfortunately, this is a pervasive problem in the workforce. Monster.com, the global recruiting site, found that 90% of those polled reported a bullying problem at work at one time or another. And unfortunately, more than half (51%) of the respondents said they had been bullied by a boss or manager, the person who is supposed to lead and encourage them. 

how to stop bullying at work

This issue requires a strong response from the HR department. Consider the following measures to discourage workplace harassment:

  • draw up dedicated policies that state what behaviours are considered bullying or harassment and how the company will respond to those behaviours
  • specify channels and methods people can use to report incidents or concerns with complete confidentiality
  • have a straightforward investigation procedure, including timelines that must be followed every time a report or complaint is made
  • regularly review and collect feedback on bullying and harassment policies to ensure they're fit for purpose

job hunting

Another common reason people take unscheduled time off is to attend an interview for another job. Employees may also call in sick to give themselves time to look for other jobs and update their CVs.

Suppose you're struggling with high absenteeism rates in the workplace and think job hunting is a contributing factor. In that case, it could be a sign that you need to look at employee engagement, opportunities for growth within your company and the availability of a flexible work environment.

For instance, Randstad’s Workmonitor 2023 report found that an increasing number of workers desire and expect flexibility in their work life, whether it’s the ability to adapt schedules (83%) or choose work locations (71%). So if you’re not competitive in this area, you could lose workers to more progressive employers.

what to do about job-seeking employees

This is another instance where you need to have clear policies in place, so workers know what the company sees as acceptable reasons for absence from work.

Some employers might be willing to give their staff the flexibility to attend job interviews during regular working hours. While this may raise concerns about enabling a high rate of staff turnover, trusting your people with a certain level of freedom could boost job satisfaction, making them less likely to want to leave in the first place.

Conduct exit interviews to learn why employees are leaving. If you notice a trend, whether it's complaints about a manager or coworker or an uncompetitive pay scale, you can react accordingly.

caregiving

Today’s workers are caught in the middle of caring for two distinct segments of society, children and older adults. Childcare is expensive, with some families devoting one-third of their earnings to two children, according to the World Economic Forum. And when children are sick, childcare facilities expect them to remain at home — with mom or dad.

Caring for elderly parents can also cause worker absenteeism. Besides instances of temporary illnesses, older adults can have chronic conditions that necessitate therapy visits and regular medical treatments.

McKinsey Health Institute reports that while life expectancy has increased substantially, the proportionate amount of time adults spend in poor/moderate health has not changed. This leaves employees caring for mom or dad for an extended period.

how to support employees with caregiving responsibilities

According to our Randstad Workmonitor 2023 survey, 94% of employees place a high value on work-life balance, and almost half would quit jobs that interfered with their enjoyment of daily life. To keep employees engaged and loyal, you need to address ways to improve this dynamic, especially among employees with caregiving obligations. 

On-site child care is a welcome perk to employees; however, it doesn’t solve the problem of what to do with sick children or address the needs of employers taking care of elderly parents. One solution is flexible scheduling.

Review your time-off policies and look for opportunities to make them more worker-friendly without compromising productivity. For example, offering PTO in increments other than full days can make it easier for workers to manage doctor’s appointments without being absent all day.

Consider if a four-day workweek is possible for your company, giving employees a day to cope with other responsibilities without missing work. LDLC, a French company, found that switching to a four-day workweek reduced absenteeism while increasing productivity. In addition, employees appreciate the flexibility and come to work with less stress.

A hybrid work model is another strategy, permitting employees to work from home so they can manage sick children or watch over elderly parents. Again, the key is adaptability, so your employees aren’t finding it a struggle to work and meet the needs of family.

effects of absenteeism on the workplace

While it might seem that implementing the above strategies could raise labour costs, in actuality, the long-term costs of employee absenteeism could be much higher. 

decreased productivity

Unless you’re overstaffed (a problem in itself), it’s impossible to maintain workflow when employees take off without warning. Then, it’s a short step to unfinished deliverables, annoyed clients and reduced cash flow.

financial loss: for company and employee

Losing a client or business partner due to missing deadlines caused by absenteeism can be critical to a business operating on tight margins. Likewise, from an employee’s standpoint, once they’ve used up holiday and PTO, they’ll soon feel a financial pinch.

negative company culture

Employees with good attendance records often end up picking up the slack for those who don’t. Eventually, this can lead to burnout, frustration and anger. In the worst-case scenario, they’ll leave, and you’ll be left with the absentee employee. 

To help you get a handle on absenteeism in the workplace, we’ve produced a short guide that looks at the subject of employee attendance and absenteeism in greater detail and highlights ways for you to approach this challenge.

We have produced a short guide that looks at the subject of workplace absenteeism in detail and highlights ways for you to approach this challenge

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about the author
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a bearded man wearing a suit while smiling and looking to the right

richard kennedy

country director

Richard is responsible for leading the continued growth of Randstad New Zealand. An empathetic and relationship focused business leader, Richard works closely with his talented team of recruitment professionals who are passionate about shaping the future of work.

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