Study pinpoints the true toll of employee absences

You may think it’s impossible to know exactly how much absenteeism hurts your company in terms of costs and lost productivity. But a recent survey did just that.

Unlike previous studies that dealt mainly with only certain absences like vacations and holidays, the Mercer 2008 Survey on the Full Financial Impact of Absenteeism may be the first study aimed at identifying the full financial impact of absences, based on the employee’s class and the type of absence — incidental, planned and extended leaves.

The study measured:

• Direct costs to absent employees

• Indirect costs (lost productivity and replacement worker expenses), and

• Administrative expenses.

The study revealed that the total costs (direct and indirect) of all absences are 36% of a company’s base payroll. Other key findings include:

• Incidental unplanned absences amount to 21% in lost productivity (missed or postponed work that isn’t covered by others) per day

• Planned absences account for 15% in lost productivity

• Extended absences account for 17% in lost productivity, and

• The combined total costs of incidental and extended absences are 9.2% of payroll.

Since incidental unplanned absences hurt the most, it’s a good idea to take on the underlying causes of these absences, whether it’s health-related or poor morale.

The absenteeism study was based on responses from 455 organizations in all major industry segments, sizes and regions throughout the country.