The 2005 survey found that while the rate of unscheduled absenteeism at 2.3 percent barely budged since last year, the average per-employee cost has risen to $660 per employee -- up from $610 in 2004 -- costing some large employers over $1 million per year. The survey only measures direct payroll costs for paid, unproductive time.

What may be of most concern to employers is that almost two out of three employees who fail to show up for work aren't physically ill, according to the survey. Reasons cited for unscheduled absences:

Personal illness	35%
Family issues	21%
Personal needs	18%
Entitlement mentality	14%
Stress	12%

"Lean staffing levels over the past several years have intensified workloads for those employees who avoided layoffs. Now that the labor market is opening up, those survivors may not be as fearful of losing their jobs and may be taking the mental health breaks they feel they deserve," said CCH workplace analyst Lisa Franke. "Employers may even see a 'culture of entitlement' emerge as the economy strengthens further."

Searching for solutions

With traditional "sick time" programs clearly out of sync with the times, the survey found that employers are increasingly offering programs to help employees manage in a more planned way the issues that take them away from work.

"Traditional sick leave policies that allow time off only for illness may put an employee in the position of having to conjure up a cold at the last minute to get the time off they really need for taking a parent or child to a pre-arranged medical appointment," noted Franke. "The CCH survey found that employers increasingly are adopting programs that recognize that the issues keeping an employee away from work often have nothing to do with a stuffy nose."

U.S. companies now offer an average of nine work-life programs, up from seven in 2003. The top five in usage are employee assistance plans, leave for school functions, wellness programs, flu shot programs, and fitness facility. 

For absence control, 90 percent of employers report they use disciplinary action. Other absence control programs include yearly reviews, illness verification, paid leave banks, personal recognition, and no fault.  The use of paid leave banks -- paid time off -- continues to climb in popularity at 67 percent in 2005. They provide employees with a bank of hours to be used for various purposes instead of traditional separate leave programs for sick, vacation and personal time.

Morale matters

The effect of morale is reflected across the board in the 2005 CCH Unscheduled Absence Survey. The survey found that employee morale can affect a company's absenteeism rate, with organizations with Good/Very Good morale experiencing a 1.5-percent rate of unscheduled absences while those reporting Poor/Fair morale had a rate of 3.2 percent.

And, this low morale can cost employers. Overall, the survey found that employers set aside an average of 5.8 percent of their budgets for absenteeism. When morale is factored in, however, organizations with Poor/Fair morale set aside 6.2 percent of their budgets to cover the costs of absent workers compared to 5.5 percent in organizations with Good/Very Good morale.

Presenteeism

The problem of presenteeism -- when employees come to work even though they are ill and pose problems of contagion and lower productivity -- is an emerging area of concern for organizations. Nearly half (48 percent) of employers surveyed reported that presenteeism is a problem in their organizations, up over 20 percent from the 39 percent who saw it as a problem last year.

Here again, morale makes a difference. Despite higher rates of unscheduled absenteeism overall, companies with low morale also have more ill workers showing up for work. In fact, 55 percent of organizations with Poor/Fair morale reported presenteeism is a problem, while 43 percent of organizations reporting Good/Very Good morale see it as an issue.

"While the direct hit to the bottom line isn't immediately evident with presenteeism, the hidden, indirect costs are very high," noted Turan. "When someone doesn't feel well, they are simply not as productive, nor is the quality of their work as high. "Then, there is the added problem of spreading illnesses to other employees who in turn either call in sick, or come in sick."

Sixty-two percent of the organizations reported they send sick employees home, while 41 percent educate employees on the importance of staying home when sick and 36 percent try to foster a culture that discourages employees from coming to work sick.

There is also a concern, however, that some traditional absence control and sick day policies may inadvertently encourage employee presenteeism. Organizations that adhere to traditional sick day policies, and take disciplinary action to enforce them, may be making it difficult for employees to do the right thing. If, for example, an organization allows each employee five sick days a year, and takes disciplinary action on the sixth absence, an employee who has been wiped out with the flu for several days may choose to come to work ill rather than risk the discipline. 

Some employees can offset the risk of a poor health year if their employer allows them to carry over the sick days that they didn't use in healthier years. Only 38 percent of organizations surveyed by CCH, however, allow employees to carry over sick time from one year to the next -- a large decline from 51 percent in 2000.

Having a paid time off (PTO) program is an effective way employers can help manage the problem of presenteeism. With PTO, the employee has more discretion as to how to use an entire bank of days, so if she's sick, she can take a day from the bank and stay home, without the fear of being reprimanded or running out of sick days.

Talking 'bout my generation?

For the first time the U.S. workforce includes four generations of employees -- all at different life stages with different needs. Employers, however, appear to be hesitant to address this dynamic. Only 29 percent of organizations say that demographic changes in the workforce will affect the work-life programs they offer, and 28 percent say it will affect their absence control programs.

Companies may be reluctant to change programs because they perceive that it will be costly, but there are costs to complacency as well.

"Each generation of employees brings something unique to an organization. When employers evaluate their work-life programs they should consider employees' changing needs based on life stages," said Tulay Turan, JD, CCH employee benefits analyst. "Inattention to intergenerational issues could have long-term consequences, affecting not just the cost and rate of absenteeism, but many other issues such as recruitment, retention and morale."

About the survey

The 2005 CCH Unscheduled Absence Survey covering 323 human resource executives in U.S. companies and organizations of all sizes and across major industry segments in 46 states and the District of Columbia was conducted online by Harris Interactive from June 16 through July 5, 2005. The survey reflects experiences of randomly polled organizations with an estimated total of more than 1 million employees. The CCH Human Resources Management Ideas & Trends newsletter sponsored the survey.

For more information, visit http://hr.cch.com