Workplace no-shows' costs to employers rise again - Update

HR Magazine, Dec, 2002 by Julie Britt

Unscheduled absences cost a surveyed group of employers an aggregate average of $789 per employee in 2002--up 5 percent from the previous year--and employers expect the trend to continue. Those are among the findings of the 2002 CCH Unscheduled Absence Survey, commissioned by CCH Inc., a Riverwoods, Ill.-based company that provides tax and business law information geared to various professions, including HR.

Although rates of absenteeism have remained essentially stable--2.1 percent in 2000, 2.2 percent in 2001 and 2.1 percent in 2002--the costs of paid unscheduled absenteeism have risen sharply, not just this year but also in 2001, when they jumped to $755 per employee from $610. (The dollar averages are calculated against total employees, not just those who have had unscheduled absences.)

The most commonly cited reason for last-minute absences was personal illness, at 33 percent. Family issues ranked second in the 2002 study, at 24 percent, and personal needs accounted for 21 percent. Rounding out this year's reasons were stress, at 12 percent, and "entitlement mentality," 10 percent.

Among other key findings of the 12th annual survey:

* While paid-leave banks have been shown to reduce unscheduled absences, less than half of the organizations surveyed said they offer such benefits.

* Employers said that on average they earmark 5.1 percent of their company's budget to pay for unscheduled absenteeism, up from 4.2 percent in 2001.

Per-employee costs reflect direct payroll costs and do not include the costs of overtime pay for workers, temporary employees who cover for absent workers, lost productivity or low morale, according to CCH. Respondents were asked only for information about the direct payroll costs for absent employees, says Lori Rosen, a CCH workplace analyst.

The key to reducing the costs of unexpected absences may be flexible scheduling and other work/life programs. Specifically, alternative work arrangements and compressed workweek programs can help reduce unscheduled absenteeism, respondents said. Other prevention programs receiving high ratings included leave for school functions, on-site child care, employee assistance plans and telecommuting.

"If an employee's only option for being absent is taking a sick or vacation day," he feels as though he can use only an unscheduled absence to, for example, have an annual physical or close on a new-home purchase, says Rosen. "When time off is flexible enough to allow employees to miss work for personal business, then those days or hours off can be scheduled and the employer can be prepared to cover the employee's duties while he or she is away.

The CCH study was conducted this past summer by Harris Interactive, a market research firm based in Rochester, N.Y. The firm polled 333 HR executives in a variety of U.S. companies and organizations. Mean absence rates were calculated by dividing total paid unscheduled absence hours by total paid productive hours. Scheduled absences, such as vacation, legal holidays, jury duty, personal time and bereavement leave, were not included.