What would be the result on a bottom line if you could reduce employee absenteeism by 1 day?

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Employee absenteeism is a major problem among blue-collar companies, but white-collar companies are also familiar with it. Find out how absenteeism can be reduced, measured, and tracked with technologies available today.

We know that employee absenteeism is a major problem among blue-collar companies, but white-collar companies are also familiar with it. It is important to understand how absenteeism can be reduced, measured, and tracked – with technologies that are available today.

Absenteeism in numbers

In my opinion employee absenteeism is the most straightforward index, since it has clear mathematical formulas. Meaning that it is not complicated to figure out the results on the bottom line. “Simplyhealth” conducted a research with 1.4 million respondents to discover reasons and results of absenteeism in theUK. According to them on average 7 days are being lost by all employees, what is 2% of all working time per year. That costs €767 per employee on average among all industries (Simplyhealth, 2014).

PwC’s research showed that in UK companies, absence costs accounted for €39 billion. Using the last Labour government's ‘Building Schools for the Future’ program, the average cost of a secondary school was €31m. That would mean absenteeism in the UK costs 1250 secondary schools per year!

Absenteeism is growing rapidly - companies are losing millions

Deeper analysis showed that high absenteeism mainly occurs in public sector and big organizations. Also, manual (blue-collar) workers tend to skip more working days than non-manual (white collar) workers. The gap between the absence levels of manual and non-manual employees appears to be increasing. In 2011 manual employees had an average of 0.2 days more absence per year, in 2012 1.0 day more, in 2013 1.4 days more and in 2014 2.5 days more than non-manual workers.

Among our studied companies there are both white-collar and blue-collar orientated businesses. They have varying absenteeism levels and it requires particular methods to decrease absenteeism in different industries. We didn’t make a distinction between industries, just applied fixed assumption for all organizations, we tried to find out how much companies can save if they reduce absenteeism by one day. We have made estimations for our selected companies, by reducing absenteeism by 1 day - HSBC could save up to €24,7 million and BP €31 million annually. Same calculations were made for Finnish and Danish companies. Danske bank could save almost €5 million, Maersk - €9,5 million. Nokia could reach gain of €2,8 million and Neste oil €0,8 million. Overall almost €74 million might be saved just from these six companies. Imagine the amount on a global scale!

Causes of absenteeism

Before taking any actions to reach these gains, you need to find out the major absence causes. Main reasons for short-term absenteeism vary between industries. Blue collar workers usually omit work for musculoskeletal injuries (for example neck strains and repetitive strain injury), back pain, injuries/accidents related to work or due to non-genuine ill-health ('pulling a sickie') way more often than white collar workers. Non-manual employees (white collar) absence causes occur more often due to minor illness (for example colds/flu, stomach upsets, headaches, and migraines), stress, mental ill-health (for example clinical depression and anxiety), pregnancy-related absence, home/family/career responsibilities comparing to manual employees. Whilethe majority of the reasons are not directly related to work, and it is relatively difficult to control and take some actions towards it, stress remains the absence reason that might be directly influenced by themanagement team.

“Simplyhealth” survey discovered main causes of stress at work, it includes: workloads/volume of work, management style, relationships at work, considerable organizational change/restructuring, pressure to meet targets, long hours, lack of employee support from line managers, poorly managed organizational change/restructuring, lack of control over how work is carried out, job insecurity, lack of training/consultation and other reasons. Several methods to enhance the stressful atmosphere in a workplace are: promoting ahealthylifestyle among your employees, re-thinking and re-organizing your management, flexible working options, improving work-life balance. These actions are generally well known, legit and clear, but how to be sure they will bring some positive results?

Actions to consider

All in all, what you have to do is to identify the real and exact issues that haze specifically your employees. Annual employee surveys are outdated and do not provide any value in discovering quickly changing behavior and feedback. Modern organizations understand that it is important to track how your employees feel, what they think, what problems they face on daily basis. This information will lead to the underlying cause of their absenteeism, not too formal, non-genuine excuses. Gathering honest feedback is not easy. Many companies move towards more frequent surveys that are carried out monthly or quarterly.

Nonetheless, HR leaders forget that employees are same people who hate being distracted by e-mail and notification based surveys. Simple question – when was the last time you responded to a hotel or airline survey? Why should employees respond to a distracting survey on monthly basis? In addition to that, HR departments should consider that even monthly questionnaires are outdated for today’s rapidly changing environment. Although, what would happen if employees could respond on a daily basis? Gathered feedback facilitates the ability to act immediately with applicable quick fixes or communication to the employees. Daily communication through a distraction free feedback tool that could engage with employees while they are waiting for print, elevator or coffee, may change the way HR departments engage with employees. Communication through such a tool may allow not only to gather feedback, but also inform, educate, and understand the patterns and trends within the organization.

Just think: if you understand the key drivers of employee absenteeism and provide solutions to them on monthly or bi-weekly basis rather than yearly, it will reduce employee absenteeism, resulting in major gains on the bottom-line.

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