Absenteeism is a familiar and unavoidable challenge for all businesses. Employees will always need to take time off, primarily because of minor illnesses, injuries and medical appointments, but also due to factors like stress, family commitments and job dissatisfaction.

Since the consequences of absenteeism can, directly and indirectly affect your business, you need a well-planned effectual attendance policy to prevent loss of profits and customers.

Fortunately, you can employ steps and strategies to manage absenteeism, starting by identifying why people take unscheduled time off. Once you’ve determined your problem areas, it’s time to take action.

Read further to learn how you can proactively prevent gaps in your workforce instead of simply reacting to staff shortages as they arise. 

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how you can manage absenteeism to keep your business running smoothly

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costs of absenteeism

The difficulties businesses are likely to face when absenteeism increases significantly became evident during the pandemic, as shutdowns and sick-related absences caused considerable impact in production, delivery and service industries.

While some of the repercussions of prolonged absenteeism affect companies universally, others are specific to certain industries or unique to a business. No one knows your business better than you, and as such, you must determine where absenteeism will hit you the hardest. 

A recent survey by Gallup concluded that an absent employee costs the business, on average, $340 per day in direct and indirect costs.

direct costs of absenteeism

When employees are absent, someone has to fill their shoes. This means you might have to pay overtime to a regular employee or rely on emergency help through a staffing agency. Either way, you have extra wages — along with reimbursing the employee, depending on your attendance policy.

Additionally, you must pay a supervisor to handle the staff shortage and HR personnel to document everything.

indirect costs of absenteeism

However, the above direct costs are just a portion of what you’ve lost due to an unscheduled absence. The fill-in employee will need time to get up to speed, review what needs to be accomplished and determine where the prior worker left off.  If you’re relying on overtime or replacement employees from another department, there’s the possibility of more errors, slower than usual production time and safety issues.

Finally, your other employees, those who are picking up the slack, may feel frustrated and overworked, leaving you with lowered workforce morale.

The combination of higher-than-usual expenses and lower productivity inevitably leads to income loss.

absenteeism costs to the employee

When individual employees call off repeatedly, they’re adversely affected, as well.

First, once they’ve used up all their allotted paid time off, they’ll receive reduced paychecks. Second, and more importantly, continuous absenteeism is often a symptom of a bigger problem. For example, the employee in question could be facing a chronic illness, a worrying family situation or problems at their job.

For example, one study by Harvard Business School reported that almost two-thirds of all employees are engaged in caregiving for a child, parent, or other family member or friend.

While you, as an employer, can offer support for personal situations, job-related issues are 100% your responsibility.

By learning some common reasons for increased absenteeism, you can institute an employee attendance improvement plan that offers solutions and support to your workers.


look for the root causes of absenteeism

Before you begin proactive planning for your absenteeism policy, you must understand why people take time off.

private reasons for increased absenteeism

According to the United States Bureau of Labor Statistics, 71% of the total yearly absences among workers in 2021 were attributed to illness or injury, resulting in a rate of 2.3%.

Similarly, in the United Kingdom, the sickness absence rate reached 2.2% in 2021, an increase after several years of decline.

Acute illnesses, including colds and the flu, may cause your absenteeism rate to increase, especially during the winter months. However, these types of call-offs are usually self-limiting. Repeated health-related absences from the same individual may result from a long-term health condition or chronic illness.

High blood pressure and diabetes, along with risky behaviors like smoking, physical inactivity and overeating, are significant contributors to repeated absenteeism, causing U.S. employers to lose over 36 billion dollars a year, according to data from the CDC

Other chronic conditions leading to frequent or long-term absences include heart disease, cancer, arthritis and migraine disease.

Recently, more attention has been paid to workers' mental health, including its effect on attendance rates. For example, the Gallup Panel surveyed US workers regarding their mental state of mind. Based on the survey results, Gallup projects that workers who self-evaluate as having poor or fair mental health will miss work approximately five times more annually than those who rate themselves higher.

McKinsey Health Institute looked at workers in 15 countries and discovered over half have faced a mental health challenge at one time or another. The second part of the equation is even more important from an employer's standpoint. Workers who reported mental health challenges were likelier to reveal poor worker metrics, including low job satisfaction and engagement — the perfect recipe for frequent absenteeism.

work-related reasons for absenteeism

Some of the above causes for poor attendance may exist simultaneously with job-related issues. However, as an employer, you have much more control over on-the-job problems, giving you the incentive to focus on workforce planning in these areas.  

  • workplace bullying or poor management
  • general disengagement and dissatisfaction with work
  • lack of flexibility in hours and location
  • negative company culture
  • burnout
  • deficiency of training and growth opportunities
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how you can manage absenteeism to keep your business running smoothly

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proactive workforce planning for your organization

The employers with the most success in managing absenteeism and mitigating its impact use proactive planning instead of simply reacting to staff shortages and scrambling to plug gaps in the workforce.

analyze your labor force

Start by collecting data to get a clear picture of where you currently stand regarding adherence to your attendance policy. 

Identify trends by looking at your average absenteeism rate over specific periods. First, consider a company-wide calculation for a comprehensive review. Then, focus on departments and finally, individual workers. These figures will help you determine if you have a problem within a division or only during certain times of the year or need a complete revamping of your absenteeism policy.

Run a staff capacity audit to discover where the most significant problems will likely arise when absences occur. You’ll also be able to see where you’re running too tight a ship and need to recruit more talent or where you can rearrange schedules or shifts to provide better coverage.

This may also be the time to consider more flexible work options. For example, the four-day workweek is gaining ground with many companies, and so is the use of software apps to handle shift work and a hybrid work model.

Activities like workforce skills audits let you find how your people are placed regarding the knowledge and skills required to perform tasks. You can then concentrate on any skills gaps that may exist or develop when you adopt new technologies and see where you need to recruit or transfer employees.

Furthermore, pinpointing the competencies required to complete critical tasks and having a clear picture of your labor force skills will help you design appropriate training and development plans. Finally, upskilling employees in these vital areas will help ensure you can keep your core business running, even when you're understaffed.

Given a choice, companies find that upskilling and reskilling current employees pay out huge dividends from a cost standpoint and worker morale. For example, a global survey by McKinsey concerning companies that have recently succeeded at digital transformation found that they were 35% more proficient at reskilling existing employees than the companies who’ve struggled during their adaptation.

study business operations

It's crucial to prepare for times of reduced workforce capacity by identifying the tasks critical to the business's functioning. This will help you determine which activities need to be prioritized and which can be set aside when key staff members are absent. 

Workforce planning and scheduling practices can help ensure that you're always making the best use of available talent and deploying people where they're most effective, regardless of your current position, with respect to absenteeism.

address employee concerns

Once you’ve looked at your absentee statistics and determined the talent assets you must have to succeed, it’s time to focus on absenteeism management.

First, consider the most common physical reasons to miss work and look for long-term company-wide solutions.

  • chronic health problems: Support good habits for your employees, including activity incentives, healthy snacks, on-site exercise facilities or other wellness perks
  • seasonal call-offs: Invest in better ventilation, hand sanitizers and touchless trash cans and encourage vaccines
  • mental health challenges: Keep an open dialogue, so workers feel free to discuss any problems, and ensure employees are aware of available support programs

Regarding work-related reasons for absenteeism, you may find it more difficult to get to the root of the problem. You will need a close connection with your workforce to identify these issues. Opinion surveys are essential in discovering how people feel about their jobs but don’t neglect to follow through with dynamic solutions.

  • Bullying or toxic work environment: Harassment has no place in the work environment and should be immediately discouraged. Consider soft-skill training for managers to ensure leadership provides emotional and social support to their team
  • lack of engagement: Give your workers a sense of purpose by letting them see how they fit into your organization’s goals. The Society for Human Resource Management recommends offering team and individual recognition to help develop inclusivity and improved performance
  • company values: Randstad’s Workmonitor 2023 survey found that employees want more than a steady job. They’re looking for fulfillment and a chance to make a difference in the world. Furthermore, 42% are willing to defend their values by refusing to work for a company that doesn’t fit their social and environmental belief system.. If your organization has sustainability goals or contributes toward specific causes, ensure employees realize how they can participate in these endeavors.
  • training: The Workmonitor 2022 survey also found a strong desire among employees of all ages to learn and improve, with more than 50% wanting programs to help them in their current roles. Other areas of interest were soft skills and leadership training and technical competency.
  • flexibility: While the pandemic didn’t initiate the hybrid work movement, it definitely fueled it. Look for opportunities to offer your employees more control over their schedules, whether remote work, a shortened work week or shift adjustments.

To ensure the success of your employee attendance improvement plan, it helps to get professional advice from HR industry experts.

As part of our Randstad Inhouse Services, we offer a care program to support your efforts to gauge sentiment in your workforce and identify which aspects of their work people appreciate or find difficult. We can also help your overall efforts to optimize recruitment and HR, which could prove crucial when you're understaffed and need to hire reliable workers quickly.

We've produced a guide that provides further advice on managing absenteeism and workforce planning, including keeping your business running smoothly even when your staff is depleted.

Illustration heart in hand

how you can manage absenteeism to keep your business running smoothly

download the guide
about the author
sandra ebbers
sandra ebbers

sandra ebbers

vp global concept inhouse & large accounts

Sandra is responsible for the implementation of the inhouse concept worldwide. This business concept adds value to large organizations by optimizing their workforce and guiding flex workers in a cost-efficient way of working.

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