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Absenteeism Costs
Large employers say unscheduled absences cost $760,000 or more per year

Oct. 11, 2007 Employers have failed to make significant headway against the costly absenteeism problem that takes billions of dollars off the bottom line for U.S. businesses, according to a survey from CCH. The nation's largest employers estimate that unscheduled absenteeism costs their businesses more than $760,000 per year in direct payroll costs, and even more when lower productivity, lost revenue and the effects of poor morale are considered.



According to the 2007 CCH Unscheduled Absence Survey, conducted for CCH by Harris Interactive, the absenteeism rate was 2.3 percent in 2007, down slightly from 2.5 percent last year.

The survey found that personal illness accounts for only 34 percent of unscheduled absences, while 66 percent of absences are due to other reasons, including family issues (22 percent), personal needs (18 percent), entitlement mentality (13 percent) and stress (13 percent).

"Most people today are juggling the demands of busy personal and professional lives, and are trying to do their very best in both places," said CCH Employment Law Analyst Pamela Wolf, JD. "Organizations need to stop the tug of war with people for their time, and become a partner to employees to help them, and the business overall, be more successful."

The survey also found that for many employers, it's no surprise when employees are likely to be no-shows. Companies can expect a discernable pattern in unscheduled absences, such as people calling in sick on Mondays and Fridays, around certain holidays, and during flu and hay fever seasons.

The challenge for both employees and employers is that, for many people, demands on the home front have changed at the same time demands of the workplace have increased. The cost of this tacit give-and-take arrangement is too high to go unchecked, according to CCH.

The survey examined a wide range of work-life programs that could help alleviate unscheduled absences. On a scale of 1 to 5 (with 5 being most effective), the work-life programs rated highest for reducing unscheduled absences are Alternative Work Arrangements (3.6), Telecommuting (3.5), Compressed Work Week (3.3), Leave for School Functions (3.2)and Flu Shot Programs (3.2).

However, employers don't necessarily offer these options. Of the work-life programs offered by employers, the top five in use are Employee Assistance Plans (72 percent), Flu Shot Programs (66 percent), Wellness Programs (60 percent), Leave for School Functions (54 percent) and Alternative Work Arrangements (54 percent).

"The fact that two of the programs that companies rated as most effective – Telecommuting and Compressed Work Week – are not also among the most used signals the need for employers to step back and assess if they have the right programs in place for their people," noted Wolf.

Finally, the survey found that work-life programs are down from 11 in 2006 to 9 in 2007. With healthcare costs continuing to climb in the U.S., employers may be trying to offset these high costs by eliminating programs that are perceived as being "nice to have," versus "need to have."

"Some organizations view work-life programs as a soft benefit that can be taken away without much pain, but this short-term view can have negative, far-reaching consequences – on unscheduled absences, employee morale, recruiting and retention and the bottom line," warned Wolf. "Employers need to fully consider the real costs of eliminating these programs before taking action."

2007 SmartPros Ltd. All rights reserved.

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2007 SmartPros Ltd.