How Much Does Employee Absenteeism Cost?
- Christian Ocariz
- Sep 10, 2024
- 2 min read
Employee absenteeism is at a rate of 7%, but do we really know how much it costs us? And, more importantly, what can we do to stop it?
Employee absenteeism is a growing problem that affects not only company productivity but also its finances. But are we truly aware of the cost it imposes on organizations?
The Hidden Cost of Job Dissatisfaction
Studies show that job dissatisfaction is a major cause of absenteeism. According to a Gallup report:
70% of Employees are Disengaged or Actively Demotivated, Leading to a Significant Increase in Absenteeism. The reality is that each day an employee is absent, the company incurs both direct and indirect costs that go beyond just their salary.
Is This Situation Sustainable?
Companies need to question whether the current model for managing absenteeism is viable in the long term. The cost of #absenteeism includes not only the hours not worked but also the additional burden on present employees and the potential loss of clients or projects. A study by the Society for Human Resource Management (SHRM) reveals that absenteeism can cost companies between 1% and 3% of their annual revenue.
The Society for Human Resource Management (SHRM) reveals that absenteeism can cost companies between 1% and 3% of their annual revenue.
Additionally, companies often have to adjust their budgets to cover these costs, which may lead to cuts in other areas, including salaries and benefits. This raises a critical question: how can business owners continue to sustain this situation without taking drastic measures?
Necessary Measures
As absenteeism continues to rise, business owners may be forced to adjust their budgets and reconsider their compensation strategies. Measures could include salary adjustments to compensate for lost hours or restructuring employment policies to minimize the impact of absenteeism.
According to author and human resources expert Michael Hyatt, “Organizations that do not address employee absenteeism proactively risk compromising their financial stability and internal morale.”
Recommendations for Reducing Absenteeism
To combat absenteeism effectively, it is crucial to implement strategies that enhance employee satisfaction and engagement. This can include wellness programs, professional development opportunities, and a work culture that values work-life balance. By investing in employee satisfaction, companies not only reduce absenteeism but also improve overall productivity and morale.
