Absenteeism is when employees miss work due to reasons such as sickness, holidays, or personal matters.
At first glance, it may not seem such a big deal.
After all, it’s not uncommon for employees to occasionally take time off from work for a range of reasons, from dream vacations to family emergencies.
However, employee absenteeism is expensive.
In Australia, it is estimated that absenteeism costs, on average, $3,500 per employee per year.
If unplanned absences (which also include coming in late and taking extended breaks) are regular, this can seriously impact your business as a whole.
While your business may be prepared to handle occasional absences and last-minute no-shows, excessive absenteeism can lead to delays, poor customer service, and lost revenue.
In this article, we take a look at the primary causes and costs of chronic employee absenteeism and 5 key steps to help you prevent and respond to absenteeism.
Table of contents:
1. Causes and Costs of Absenteeism
Every employee gets sick every once in a while, but when your staff is taking too much time away from work, this can have a huge impact on your bottom line and productivity.
Whether your employees are disengaged or there are no initiatives in place to promote workplace well-being, absenteeism can cause more damage than you think.
As we mentioned at the start of this article, employee absenteeism can be an expensive problem.
Let’s have a more in-depth look at the data on employee absenteeism in Australia and what it has to say:
- The real cost of absenteeism falls within the range of 7% to 8% of the overall payroll expenditures (DHS)
- In 2020, the average number of days absent per employee in Australia was 8.4 days (Australian Bureau of Statistics)
- Absenteeism costs the Australian economy $33 billion annually in lost productivity and wages (DHS)
- Nearly half (46%) of Australians working in an environment they consider mentally unhealthy have taken time off from work because they felt stressed or depressed (BeyondBlue)
- PR, Advertising & Marketing is the top industry for sickies in Australia, with 23% of employees owning up to pulling a sickie (BUSY At Work)
- For an Australian business, an unexpected absence of an employee can result in a cost of up to $340 per day (Third Sector)
While it is true that employees may have legitimate reasons for being absent, such as sickness or medical appointments, there are other factors that can contribute to employee absenteeism.
Some of these reasons include childcare commitments, burnout and stress, disengagement, or simply taking a sickie (which is a common problem for many Australian employers).
Google “pulling a sickie” or “chucking a sickie” and you will come across hundreds of how-to guides that delve into the time-honoured Aussie tradition of faking sickness and taking a “doona day”. This is especially prevalent when a public holiday falls on a Tuesday or Thursday.
A DHS survey revealed that employees take on average nine unplanned days off each year, with sick leave accounting for 80% to 90% of all reported absences.
The survey also found that short-term absenteeism is the most problematic form of absence, comprising 90% of all cases.
But why is the Australian tradition of “chucking a sickie” so deeply ingrained in the national mindset?
The Fair Work Act 2009 provides full-time employees with 10 paid days of sick leave. Many claim that the high rate of absenteeism is due to a prevailing sense of entitlement among Australian employees.
This entitlement culture can lead workers to view their allotted ten days of sick leave per year as a guaranteed right, instead of a backup in the event of actual illness.
In fact, according to Daily Mail, 48% of Australians “chucking a sickie” aren’t ill. The most popular reason for faking illness and taking a day off is to cure a hangover. Other reasons may include visiting family and going to the beach.
To ensure that your team members adhere to protocols and provide advance notice for absences, it is crucial to have a clear understanding of the primary causes of absenteeism.
Continue reading to find out our 5 tips on how to reduce absenteeism at the workplace.
2. 5 Ways to Reduce Absenteeism
- Understand the causes of absenteeism
Understanding the primary causes of absenteeism can help you get to the root of the problem and give your employees the support they need.
For example, if your employees are taking too many days off due to disengagement, it is important to implement strategies to make your staff more committed to the workplace.
This can include anything from streamlining communication to improving engagement and collaboration with team-building activities.
Or, if your employees miss work due to a lack of appreciation and direction, make sure you show them how grateful you are for their efforts.
There are many creative ways to show employee appreciation, such as sending them messages to show your gratitude or creating an employee recognition program.
- Offer flexible work options
Numerous studies (such as this one) have shown that flexible work arrangements improve employee productivity and satisfaction while reducing unplanned absenteeism.
This is especially true in the digital era when a good work-life balance is more important than ever. Today’s employees seek more flexible ways to earn a living post-pandemic.
There is a clear trend to eliminate the traditional 9-to-5 workday and evolve towards virtual offices that allow workers to operate in a more relaxed and flexible environment.
With no daily commute or commitment needed when it comes to monthly lease payments, virtual offices often increase productivity and reduce absenteeism as employees are happier and feel less stressed.
If you want to learn more, you might be interested in a related blog titled: Are Virtual Offices the Future for Your Small Business?
- Utilise absence management software
Absence monitoring software enables you to keep track of your employees’ attendance and absences in real time.
Additionally, it can offer valuable insights into patterns of absenteeism and the effectiveness of specific policies, which can be used to implement policy changes.
Some absence management tools can also assist employees in planning their leaves and keep you informed of authorised absences.
- Reward good behaviour
While tracking employee absences is important, it’s also important not to overlook the efforts of those employees who consistently show up on time and contribute to the smooth running of your business.
Make sure you appreciate and acknowledge such employees.
According to Surveymonkey, 69% of employees would stay with a business if it had better recognition and rewards programs.
Making your employees feel appreciated and recognising them for their attendance and performance can be a highly effective strategy for your business, with minimal costs but significant benefits.
- Introduce a clear attendance policy
Your attendance policy should be straightforward and easy to follow. The policy should explain the number of leaves employees can take, how to record absences, and the protocol to apply for absences.
Your attendance policy serves as a guide for your employees regarding your expectations. Strive for consistency and adhere to the policy in all possible circumstances.
If your team works remotely across different time zones, your policy should outline how employee attendance will be documented and computed.
You don’t necessarily need to use time-tracking tools to monitor your employees. Instead, you can create a culture of trust and reward workers for accomplishments, not hours worked.
The Bottom Line
Every once in a while, employees may miss work for various reasons, such as illness or other personal issues, so you should expect your team members to take days off throughout the year.
But when staff start taking too many days off without advance notice, your business could hit a speed bump.
That’s why it is important to investigate the reasons why your employees are off and take measures to reduce absenteeism.
Keeping track of your business’s absence rate is critical to improving operational efficiency and keeping your business on track.
Want to create more flexibility in the workplace and unlock productivity and growth? Get started with a virtual office and build a positive and thriving working environment. Plus, you’ll save money on overhead expenses and high-priced office space. Contact us today to learn more and find out how our virtual offices in Melbourne can help you keep your team happy and productive.