How to Reduce Employee Absences: Vital for SMBs During a Pandemic

In a normal year, roughly 2.8% of the workforce is absent from work daily, including planned and unplanned absences. Productivity losses from absenteeism cost U.S. employers $225.8 billion each year, or $1,685 per employee. This is in a typical year, not during a pandemic.

Unplanned absences typically include legitimate illnesses, family responsibilities, and stress and include workers making false claims of injuries and illnesses, essentially gaming the system. Variances from the 2.8% mean are greater in smaller organizations, many of which have been plagued by absences, and that was before COVID-19.

“Hard costs” of absent employees include lost production, decreased quality, interrupted workflows, delayed schedules, overtime pay for other employees, and the expenses of hiring temporary replacement workers. Just as important are the “soft costs” of reduced morale, increased stress, and individual job dissatisfaction. Both costs are especially problematic for smaller companies, which have fewer resources to pick up the slack when an employee is absent from work.

If employee absenteeism was a problem to white knuckle your way through in the past, now it’s something you can no longer afford to ignore. Here are four proven strategies to reduce unplanned absences:

Develop a strong, enforced attendance policy

Most small and medium-sized businesses have a generic policy in writing. These typically don’t go far enough in expressing the importance of attendance to the business, promoting adherence, and detailing consequences for taking advantage of the policy.

An effective policy indicates acceptable and non-acceptable patterns of absences and details how these are monitored, flagged, and addressed. For example, disciplinary action may be taken if three absences within a narrow time frame occur on Fridays or Mondays.

When new employees are onboarded, the attendance policy should be discussed at length, including how attendance factors into performance reviews. It should be prominent in the employee handbook and on the employee portal, and it should be brought up in company meetings when absenteeism spikes. Keeping your policy top-of-mind serves as notice of its importance and strong enforcement.

Track attendance with software and send employees notifications

ERP software typically contains modules and features that enable managers to monitor absences and keep employees aware that they are being monitored. Software that requires employees to track their time actively keeps managers and leadership informed of employee absences in real-time, enabling more effective contingency planning. Employees know they are being held accountable as they see a daily updated visual representation of their attendance record, including their logged hours and requests for time off. This automated oversight results in more advance notice for absences and more open dialogues about health issues that could cause absences.

Well-meaning employees like these systems, which let them track their absence records for the year to date, compared to where they should be, given the maximum allotments. By providing visibility into problematic trends in their own attendance records, the software helps keep them on track toward attendance expectations. When used in conjunction with a strong and specific absence policy (viewable from this software), the deterrent factor can be powerful.

Reward exemplary attendance rates

Incentives for attendance can be enacted in various ways, and they can be tested and improved over time to have the greatest possible impact. You may want to try increased PTO or bonuses as a reward, paid hours off after exemplary attendance objectives have been achieved, or merit increases tied to attendance. You can also make attendance a factor in promotions if your absentee rates start to trend upward.

Provide a healthcare plan with a focus on preventative care and wellness

Fortunately, you’re not alone in the battle against absenteeism. Most major health care plans include incentives to help employees remain productive by improving good health behavior, managing stress, reducing weight and improving fitness, and regulating blood pressure, cholesterol, and glucose. These measures produce incremental improvements, but a comprehensive approach to wellness produces a compounded effect of better health, vitality, productivity, and longevity. Wellness plans are not a solution but should be a component of your overall approach. Harvard researchers examined the ROI of wellness programs as they affected absenteeism and demonstrated that employers could save $2.73 in the costs of absenteeism for every dollar spent.

The first step in reducing absenteeism is to track your daily, weekly, and yearly rates and trends. If you’re heading in the wrong direction, head off a potential crisis by enacting these strategies to make an immediate impact. With so many COVID-related absences to be expected, now is the time to make sure your overall absentee rate remains in a normal range.