According to statistics released by the U.S. Bureau of Labor, businesses in America experience 2.8 million absences each year. The cost of these absences both direct and indirect is more than $74 billion. The DOL did a study released in 2010 that estimated that 3-5% of an employers workforce is absent on any given day. Fortunately, employee absence management systems like Advance Systems Time and Attendance Software (Mitrefinch TMS) can help reduce costly absenteeism.
If you’re like most of today’s organizations you know that absenteeism is having an effect on your bottom line. Every time a person is absent, you need to fill that persons shoes so the work gets done. Assuming the person who is absent is using a sick or personal day, you must pay that person, as well as that persons replacement. If the replacement has worked more than 40 hours per week, you may need to pay overtime.
Excess overtime can lead to fatigue, injuries, and illness, which can result in even more absenteeism and overtime. Its a vicious circle! And you don’t know how to stop the bleed! When all is said and done absenteeism results in lost productivity, high-cost replacement workers, and expensive and unnecessary excess staffing.
Absenteeism can have a serious effect on employee engagement, and several studies indicate that organizations with higher rates of absenteeism also have higher rates of turnover, which can also be very costly to the organization.
So how do you rein in the excess costs associated with absenteeism? Simply put, the only way to reduce costs is to reduce absenteeism. There are three steps you can follow to reduce the high costs of absenteeism at your organization.
1. Stop guessing and start tracking.
The only way to accurately determine the effect that absenteeism is having on your organization is to track absenteeism rates and patterns. Automated employee time tracking software can track and collect all absences in one easy-to-use interface, and can identify frequency, patterns, and causes. Administration can then use this information to make decisions.
2. Reduce overtime costs
Employee absence management software puts the control back in the hands of administration. When absences occur, administration can use the system to select replacement employees based on hours worked during the week. This not only cuts costs, it decreases the likelihood of overworked employees, and therefore reduces injuries, illnesses, and additional absences.Time and Attendance Software (Mitrefinch TMS) can also be configured to notify administration when overtime hours exceed the budget.
3. Control productivity
A reduction in absences ensures that workloads are consistent for other employees, and results in happier, more productive workers. Automated employee time management software makes it easy to set and enforce absenteeism policies, and to address issues before they become real problems for your organization.