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In The News: Employee absenteeism takes large toll on productivity, revenue, study shows

While it has long been known that employee absences takes a toll on workplace productivity and even revenue, a new survey by the Society for Human Resource Management (SHRM) and Kronos actually puts a price on the losses.

According to the Total Financial Impact of Employee Absences Survey, the direct cost of paid time off for full-time employees in 2013 (including wages, overtime and replacement workers) was equivalent to 15.4% of payroll. However, when indirect costs such as lost productivity were included, the total cost of paid time off was between 20.9% and 22.1% of payroll. Unsurprisingly, the survey reveals that unplanned absences had the highest overall cost.

Specifically, the survey reveals that supervisors spent an average of 4.2 hours a week or a whopping 5.3 weeks a year, dealing with employee absences, including finding replacements, adjusting workflow and providing training.

In terms of productivity, supervisors were perceived to be 15.7% less productive and co-workers 29.5% less productive when providing coverage for a typical absence day. Replacement workers used to cover for an unplanned absence resulted in the highest average loss of productivity with 36.6%.

The survey also showed that overtime was used to cover 47% of employee absences. Other popular options include hiring temporary staff and dispersing projects among other employees or placing them on hold.

Looking at employee absences, between 58%-71% of survey respondents reported having a formal, written attendance policy. Further, two-thirds of respondents said their employees request time off by using a form or sending an email. Most organizations use technology to track employee time and absences, with 35% reporting using an integrated system as part of a broader HR system and 29% using automated third-party software. Meanwhile, 15% of organizations report still using a manual process.
Commenting on the survey, SHRM’s director of survey programs notes that “these results show that tracking paid time off is important not only for ensuring that employees are treated consistently but also for controlling costs related to paid absences.”

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