Absenteeism in the workplace: causes, impact on a business, and possible solutions

Until the twentieth century, businesses had a clear rule: no work, no pay. Eventually, companies started allowing employees to take time off from work for illness or vacations and started offering paid “sick days.” Companies with an effective employee absence strategy could reduce overall payroll costs by at least 10 percent.

As Human Resources evolved as a field, employee supervisors noted that not all employee absences fit into the same category. Therefore, before establishing strategies to manage high absenteeism rates, identifying the absenteeism types was crucial for HR leaders.

There are three main types of absenteeism:

1) Absences that are planned and approved by management. These absences will not disrupt operations.

2) Unexpected absences due to genuine reasons and unforeseen circumstances, including a car accident, sickness, or any kind of emergency.

3) Frequent absences without informing management or without a genuine explanation. These absences cause the most disruptions.

When absenteeism becomes excessive and potentially poses a threat to your company’s productivity, it’s time to understand the leading causes of absenteeism in your workplace.

Let’s look at the top causes of employee absenteeism in the workplace before exploring how you can address them as an employer.

An employee can feel dissatisfied at work for several reasons. These reasons usually involve an uncomfortable situation in which the employee feels they are being subjected to unkind remarks or bullying or are being denied growth opportunities due to favoritism. Employees may call in sick to avoid such situations.  

Sometimes employees may be forced to miss work to stay home and take care of a child or other relative when normal arrangements have fallen through.

According to Great Britain’s Labour force survey, an estimated 822,000 UK workers were suffering from work-related stress, depression, or anxiety in 2020–2021. A high number of workdays are lost when employees are subjected to stress or are affected by mental health conditions including depression and anxiety.

The reasons for such issues could be work-related or personal. Signs of demotivated employees include arriving late, leaving early, and taking longer breaks than allowed.

Employees who are not committed to their jobs are likely to miss work simply because they lack motivation. A common reason for this is that employees are not equipped with the skills needed to keep up with the fast pace of work. Or long daily commutes might demotivate employees, especially when dealing with inclement weather, public transportation delays, or minor aches or pains. Employees may not feel it’s worth the trouble to get to work.

Injuries, illness, and medical appointments are the most common reasons for missing work. During cold and flu season, there’s a spike in absenteeism for both full- and part-time employees. Chronic injuries such as back and neck problems are two other common causes of excessive absenteeism in the workplace.

According to the BLS, “7.8 million workers missed work in January 2022 because they had an illness, injury, or medical problem or appointment, up from 3.7 million in January 2021”.

Some employees may call in sick as an excuse to attend a job interview, visit a headhunter, or work on their resumes. Absenteeism also happens when employees feel unappreciated in terms of promotions, salaries, or other factors and are looking for better opportunities.

While the causes of absenteeism in the workplace are wide-ranging, they all have potentially damaging impacts in terms of an organization’s productivity, finances, and overall morale.

The impact of absenteeism is certainly a large enough problem that it affects the individual, team, and organizational performance. 

Absenteeism can affect individual productivity: when someone works less, they’re likely to be less productive. At the same time, their colleagues may be overburdened with extra tasks. Depending on the skill level of an employee, their absence could also result in a drop in quality, consequently decreasing customer satisfaction. Furthermore, employees who take over for overloaded colleagues may not be able to get their own tasks done, disrupting project timelines. 

A sense of animosity can quickly escalate amongst reliable staff, as they now have to absorb extra responsibilities on top of their existing workload.

Workers are less productive when covering for absent employees. Supervisors spend hours per week dealing with absences and preparing for/adjusting workflows to keep things moving.  

One of the biggest negative impacts of absenteeism in the workplace is the added workload that colleagues must take on for employees who are absent.

The U.S. Department of Labor (DOL) estimates that almost 3 percent of an employer’s workforce is absent on any given day. The cost of these absences is largely included in payroll expenses. Organizations bear direct costs, which are easy to quantify. These include the costs of employee PTO, wages/salaries, overtime, and replacement workers.

According to a CDC report, “productivity losses from missed work cost employers $225.8 billion, or $1,685 per employee, each year.” 

Further, indirect costs include loss of productivity as a consequence of unplanned absences, which must be factored into an organization’s cost calculations. Unplanned absenteeism can result in significant productivity costs.

Just as there are many causes for absenteeism in the workplace, there are many possible solutions. Which solution is best depends on how significant of a problem absenteeism is for a particular company.

Companies should move forward with disciplinary proceedings if absenteeism becomes a major problem. An absence management program requires employees to complete forms and provide evidence of reasons for absence. If the reasons are insufficient, absent days are not paid for.

Companies often need to focus on non-work-related programs to boost productivity and curtail healthcare costs. Employee assistance programs help workers deal with issues outside of work (such as those related to parenting and marriage) that they bring to the workplace. These programs can include:

• Counseling for mental health, alcohol abuse, and substance abuse
• Employee workshops for addiction problems, nutrition and diet counseling, exercise, and stress management
• Management consultations and supervisory training
• Resources and referrals for life/work issues
• Legal and financial services

By making the workplace a positive and welcoming environment, a company can create a culture that promotes job satisfaction. This is one of the most important factors in reducing absenteeism. Having clear employee and company expectations and ensuring that the future career path is laid down for employees with right upskilling strategies fosters a positive company culture.