Companies expect employees to use some sick days from time to time. Life happens, and family issues, injuries and sickness will interfere with the work schedule of a company's employees.

However, excessive absences can quickly become costly for employers. Even a single sick day may reduce productivity, but when absenteeism becomes an extensive problem, the effects may negatively affect the morale, productivity and finances of a company.

To combat this problem, its important to understand the costs of absenteeism, its common causes and the best ways to manage the problem to reduce company losses.

The Costs of Employee Absenteeism

Many companies fail to realize that absenteeism can negatively affect a business in several ways. Excessive absences cost companies in lost productivity, overtime wages, compensation to absent employees, reduced employee morale and a reduction in overall customer satisfaction.

Other indirect costs that may result from absenteeism include safety issues that result in accidents, poor quality services or goods and excess manager time. According to Forbes, a Circadian workforce solution company publication found that unscheduled absenteeism costs about $2,650 each year for salaried employees and about $3,600 each year for hourly workers.

Although the absence of employees results in many expenses for a company, the biggest costs are those that come from the reduction in morale, company profitability and company productivity.

Each year, the U.S. Bureau of Labor Statistics estimates that 2.8 million workdays are lost due to employee illnesses and injuries. All of those absences, even when legitimate, add up to create a severe financial burden on companies of every size. Lost productivity alone costs companies billions of dollars annually.

Common Causes of Absenteeism

Since employee absenteeism is so costly, its important for employers to understand the common causes of this issue. After understanding those causes, companies are in a better position to manage the problem. Although there are many reasons why individuals miss work, some of the most common causes include:

  • Low morale or employee burnout
  • Disengagement with the job or company
  • Depression, alcohol and substance abuse
  • Illnesses and medical appointments
  • Difficulty finding childcare or eldercare
  • Acute and chronic injuries
  • Working partial shifts, which includes taking long breaks, leaving early or being tardy

Managing Absenteeism to Reduce Company Losses

When companies become more aware of the causes of absenteeism, it becomes easier to come up with a good plan to manage absenteeism, reducing the losses of the company due to excessive absences.

The first step to managing employee absences is to be proactive, working to prevent the problem. Start by providing employees an engaging workplace, which improves workplace morale by making them feel important and respected. When work is engaging and fun, employee absenteeism wanes.

Offering flexible schedules, the ability to telecommute and shorter workweeks may also help prevent the problem, allowing employees to have the time to meet demands outside of work. Focusing on employee safety also helps, resulting in fewer injuries and absences.

Clear absence policies also provide an excellent way for companies to manage absenteeism. A good absence policy should define the workday, provide limited sick time, require early call-ins and clearly outline consequences of chronic or excessive absenteeism.

Finally, companies must respond to absences when they occur to minimize the overall cost of excessive nonattendance. Focus on recording absences, addressing absences with employee discussions and offering return-to-work programs to help returning workers get back on the job.