Absenteeism can be a costly problem for any business, but the impact on small businesses can be especially severe. Employers can control excessive absenteeism by creating an atmosphere where good attendance is valued. A formal attendance policy can help ensure that attendance problems are dealt with fairly.
Excessive employee absenteeism can wreck havoc on a business, especially a small one. For that reason, you may want to have a policy in place that regulates this aspect of your workplace.
How expensive is employee absenteeism? Along with the obvious costs of having to pay someone who isn't at work (if you offer sick leave benefits), there are also hidden costs of absenteeism that you may be able to avoid by having an absenteeism rule or policy:
- lost productivity of the absent employee
- overtime for other employees who fill in
- decreased overall productivity for those employees
- any temporary help costs you might incur
- possible loss of business or dissatisfied customers
- problems with employee morale
If you think that having a specific policy or rule regarding absences might be a good fit for your business, you should consider how to track absences and how to handle excessive absenteeism.
Tracking employee absences
You'll have trouble managing absenteeism costs if you can't track what those costs are and exactly where they are being incurred. You may need some kind of system in place to track employee absences, if your payroll records don't already do this.
Absentee records (or time cards) can be used to:
- keep track of individual employee absences
- render totals for the business
- pinpoint absence fluctuations over different time periods or different times of the year
- calculate the cost to the business for unscheduled absences
Tracking absenteeism in your business may be as simple as keeping a tally of when an employee is not at work. Regardless of how complex or how simple your system and your policy are, they should:
- define "absence" and "partial absence" so that records are consistent
- differentiate between types of absences, particularly between unexcused absences, medical or disability-related absences, and uncontrollable personal emergency or other absences, in order to extract some meaningful data from the records
- design a notification procedure for employees to report absences
- design a method to record absences such as sign-in sheets, time clocks, or time sheets that employees hand in at given periods
Creating an effective absence policy
Should you have a formal attendance policy? There are pros and cons to having a formal policy in place. You may want to develop a policy for your own use, so that you can be sure you're treating employees fairly and similarly from incident to incident. On the other hand, you may not necessarily want to put your policy in writing and give it to your employees, unless you have a large number of employees and absences have historically been a significant problem in your business. General statements that excessive absenteeism will be a cause for discipline may be insufficient and may lead to problems. In addition, by putting a policy in writing, you can unwittingly create an employment contract between you and your employees.
However, a formal, detailed policy that addresses absences, tardiness, failure to call in, and leaving early can serve to prevent misconceptions about acceptable behavior, inconsistent discipline, complaints of favoritism, morale problems, and charges of illegal discrimination.
If you do decide to create the more formal type of absence policy, there are two basic kinds — traditional policies and "no-fault" policies.
Traditional absenteeism policies distinguish between excused and unexcused absences. Unexcused absences can result in progressive discipline.
A "no-fault" system permits a specified number of absences — either days or occurrences — annually. You do not require or inquire as to a reason. The no-fault system is easier to administer, but some employees may believe that the system is not flexible enough.
Some no-fault plans avoid the problems inherent in the second example above by counting multiple days of continuous absence as a single occurrence.
A no-fault policy should include an adequate warning system so that employees know when they are getting close to the limit. The policy should also specify what happens in the event that an employee's absences exceed the allowable number of days or occurrences.
Handling excessive absences
Since absenteeism costs you money, you should try to cut down on unnecessary absenteeism without violating federal or state anti-discrimination laws or causing morale problems. In order to do so, you must determine what the main causes of your company's particular absenteeism problems are. Only then can you try to address them in a constructive way.
The most common reasons for employee absences are:
- illnesses or injury
- personal or attitude problems
- reasons relating to the employment situation
- reasons related to general community requirements or social problems
- weather and transportation
- no pressure to show up for work
If you suspect that one or more of these reasons may be the cause of an excessive absence problem in your business, determine whether they could be reduced by effective motivation.
One of the best ways to control absenteeism is to create an atmosphere where good attendance is valued and poor attendance is dealt with accordingly. This can be done through reward and discipline programs. Make sure employees know that attendance is important, valued, and rewarded.
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