Absenteeism at work: Cost analysis and strategies

Playback time: 8 minutes
23/05/2024

The cost of absenteeism at work

Explore the cost of absenteeism at work and discover solutions to reduce its impact on your business.

25 billion euros: the average cost of absenteeism for French companies in 2023 (€3,500 per employee, according to Axomove).

Trend in lost-time prescription rates (Source: Malakoffhumanis)

Despite a drop in the absenteeism rate nationwide, we are seeing an increase in very small businesses, from 38% in 2022 to 40% in 2023, with numerous consequences for the company: financial health, productivity...

That's why we're going to look in detail at the direct and indirect costs of absenteeism at work, and the strategies you can adopt to minimize its impact.

Absenteeism from work is the unplanned or unjustified absence of employees during working hours.

Direct costs of absenteeism

Direct costs correspond to expenses directly associated with absent employees:

- Wages paid to absent employees

- Costs related to temporary replacements

- Payment of overtime worked by other employees due to increased workload

- Insurance and benefits costs related to absenteeism

Indirect costs of absenteeism

Absenteeism also has an indirect impact on a company's bottom line. A reduced workforce often means lower productivity. And then, one problem after another cascades down:

- Accumulation of project delays

- Reduced quality of work

- Customer dissatisfaction and loss of competitiveness

- Stress, frustration and low employee morale

Absenteeism impacts not only the company, but also the employees present, who feel more pressure and stress due to the increased workload. The fast pace of work often leads to a loss of motivation and commitment. This can further reduce productivity and, ironically, increase absenteeism. One man's absenteeism is another man's absenteeism.

In a hospital, for example, the workload for other employees is made much heavier, resulting in not only longer delays in patient care, but also additional costs associated with replacing absent staff or compensating for overtime worked by other employees.

There are also other "hidden" costs to consider.

The HR department is also affected by absenteeism, as it has to manage absences, which wastes time.

Absenteeism also leads to organizational dysfunction within the company. The reorganization of the company also wastes time.

Presenteeism costs

What is presenteeism? It's the fact of being present at work but less productive, due to an illness or ill-being such as an RSI, an injury or a mental disorder(burn-out, depression...). It leads to losses estimated at €2,740 per employee per year in the United States(Causes and costs of absenteeism).

You now have an overview of the direct and indirect costs generated by absenteeism. Understanding these costs enables companies to better manage absenteeism by anticipating its management and thus reducing its financial impact.

Strategies to minimize the impact of absenteeism on employees and the company

The best way to reduce absenteeism costs is to avoid it! Here are some effective strategies for doing just that.

Prevent absenteeism

To do this, you'll need to put in place a strategy within your company that will enable you to prevent and anticipate it, so you're ready to face it head-on. The aim is to make it less damaging to your business.

Prevention is better than cure!

How to avoid absenteeism?

By taking care of your employees! Here are just a few of the ingredients needed to keep your employees happy and fit:

- Be flexible for a better work-life balance

- Prevent RSI with ergonomic equipment

- Prevent workplace accidents with safe premises and equipment

- Set up psychological support and stress management programs

- Promote team cohesion for a good working atmosphere

- Support physical activity at work

Time to promote! 😉

SPART can help you introduce physical activity into your company to enhance your employees' well-being.

An employee who is healthy and fulfilled at work is much less likely to be absent (apart from illness).  

Managing absenteeism

How do you manage absenteeism?

An employee is absent and panic ensues. How do you distribute the tasks assigned to him? How to remain productive despite his absence?...

Anticipation is the key! Here are our ideas for managing an employee's absence in advance:

- Allocate a budget for absentees so that you can recruit or pay overtime.

- Establish a clear process for managing absences, redistributing tasks and finding a replacement

- Rely on the versatility of your employees (when possible): by training them in several positions, they can easily replace those who are absent.

- Use collaborative tools and shared storage spaces so that everyone has access to documents, even in the absence of an employee

- Prioritize tasks: differentiate between urgent and secondary tasks

- Communicate the absence of your employees and the new distribution of charges to avoid any misunderstandings

- Evaluate and adjust strategies that have worked and those that need improvement

The main cause of absenteeism is illness:

Reasons for work stoppages by duration (Source: Malakoffhumanis)

Of course, you can't really prevent your employees from catching the flu or gastro, unless you monitor their every move (not sure that's legal 🤔 ). On the other hand, you can encourage them to be careful by displaying prevention messages and reminders about the importance of hand washing, etc.

Preventing psychological disorders and RSI is also essential to reducing absenteeism.

That said, you can't totally escape absenteeism. That's why it's crucial to effectively manage one person's absence to avoid another's.

Promote employee health and well-being

To support existing employees and reduce the impact of absenteeism, set up programs to promote health and well-being:

- Mental health awareness sessions

- Nutritional advice

- Yoga or meditation classes

- Encouraging the adoption of a healthy lifestyle

- Promoting sport in the workplace(SPART 😉)

Be flexible

This is a crucial element in mitigating the effects of absenteeism on employees and the company. You can set up flexible working hours or allow employees to telecommute. This will help you maintain productivity by making it easier for employees to deal with unforeseen events in their personal and family lives. All the while preserving their mental health and maximizing their well-being at work.

Control task redistribution

Reorganize responsibilities and distribute them fairly among the employees present. You can also train temporary replacements or use temporary workers to fill the gaps left by absences. The idea is to relieve existing employees of the burden of absenteeism.

The importance of encouragement and recognition

It's essential to recognize the efforts of present employees, who often face greater workloads and pressures due to absenteeism. Publicly recognize and encourage their contribution to maintaining morale and commitment in the face of challenges.

Training and professional development

Investing in training and professional development for employees can help them cope with intense work situations when absenteeism occurs. Additional skills or better organization can compensate for staff losses without reducing productivity.

Offer your employees psychological support

Absenteeism can have an impact on the mental health of employees, who may feel overworked or stressed. Support them by offering psychological support or consultations with occupational psychologists, to help them deal with these tensions.

Be patient with your employees and give them time to readjust, avoiding any pressure. Understanding comes first during periods of absenteeism.

The same applies to employees returning after an absence. Returning to work can be a source of stress and anxiety, so it's best not to add to it.  

By adopting strategies that promote well-being at work, you can mitigate the effects of absenteeism and maintain the productivity and morale of your teams.

We're here to help you build a healthy and dynamic working environment.

Contact us today to start your journey to a more productive and fulfilling workplace! 🚀

By Candice Lhomme

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