A new study tries to pinpoint exactly what companies are losing when employees don’t show up for work.
Measuring both direct costs (i.e., pay employees receive when they’re not working) and indirect costs (lost productivity and pay for other workers to fill in), absenteeism eats up about 35% of the average company’s payroll, according to a recent study by HR consulting firm Mercer, LLC.
Planned absences, such as vacations and sick time scheduled in advance, are most common and cost 26% of a company’s payroll. But unscheduled time off is a lot more damaging on a per-day basis, costing companies a total of 6% of their payroll budgets.
Of course, employees will always need time off, both planned and unplanned. But employers can take steps to mitigate some of the damage unscheduled absences cause. Mercer recommends companies:
- Review absence policies to ensure employees are providing notice whenever possible
- Make sure managers discipline consistently when those policies are broken, and
- Look at the possible root causes of absenteeism, such as poor health and low morale.