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Are You Losing $60,000 Due to Absenteeism?
by Nancy Ahlrichs

Your organization does not have to be an airline to be brought to its knees by multiple unexpected employee absences. Could your organization survive the equivalent of US Airways’ brand, customer and bottom line catastrophe? An “us vs. them” management approach did not work for US Airways and it will not work for any organization in 2005.

Over the 2004 Christmas weekend, one company—and thousands of families and other corporate management coast to coast—learned the true meaning of “employees are our most important asset.” The completely legal, but unexpected sick days taken by hundreds of US Airways' employees proved that all of the training, knowledge and equipment that keep an airline running smoothly are worthless without skilled, loyal, problem-solving and customer-focused employees. Thousands of pieces of luggage, holiday presents, travelers and celebrations were days late because so few employees reported to work at the airline.

Absenteeism interferes with the accomplishment of short-term and long-term goals. How can your organization prevent an equivalent brand, customer and bottom line catastrophe? What policies and procedures do you need to have in place?

Whether yours is a small company or a large organization, absenteeism rates soared to a five-year high in 2004: 2.4 percent up from 1.9 percent according to the 14th annual CCH Unscheduled Absence Survey. At an average cost of $610 per employee, those companies with fewer than 100 employees lose an average of $60,000 while larger employers lose more than $1 million a year. Costs that are not tracked include overtime for on-site employees, errors and lost productivity, missed deadlines, customer issues and the cost of temporary employees.

Getting to the root cause of your organization’s absenteeism is critical. The CCH survey found that only 38 percent of employees called in sick due to their own illness—while 62 percent called in because of family issues (23 percent), personal needs (18 percent), stress (11 percent) and an entitlement mentality (10 percent). Employers focused on selecting and keeping effective employees are wise to take steps to mitigate the causes of lost productivity.

Unscheduled absenteeism is highest at companies with low morale (35 percent) while those organizations with good or very good morale have very little absenteeism (1.9 percent). To encourage employees to care about their jobs and their employer, employees must first be shown that their employer cares about them as individuals. Four approaches are used in combination by organizations with high morale and low absenteeism:

Four Ways to Cut Absenteeism
1. Reward productive attendance. Working while ill—and infecting fellow employees—is a losing proposition for all. Encouraging those who could work but who are tempted to watch television all day is a very positive goal. Counter the “use it or lose it” mentality. Ask employees what would motivate them to have productive attendance—a bonus or time off? A combination of individual and group bonuses worked well to encourage productive attendance in my niece. Her hand injured due to a work-related accident, she returned to work immediately to prevent the loss of $150 bonuses for herself and fellow workers. Had she stayed home, their year-long record of no injuries requiring time off would have been broken.

2. Focus on wellness. Free or low cost flu shots, weight loss and smoking cessation programs, walking programs, ergonomic workstations, healthier vending machine snacks, and empowering employees to solve problems and reduce their own stress are all ways that employers can minimize illness and injury among employees.

3. Provide flexibility. Employers have intruded on family life since the beginning of “work.” Balance while still achieving goals is the new “contract.” Alternative work arrangements; being allowed to leave for school functions; telecommuting; compressed work weeks; providing Employee Assistance Programs (EAPs) to address financial, family and employee problems; on-site childcare or subsidized child care close to work; eldercare assistance; and time off for legal and other appointments help provide the balance needed to reduce or prevent absenteeism. The loss of a few hours (instead of a whole day) while an employee has a physical or attends a parent-teacher meeting builds a groundswell of employer support from the family and greater community.

4. Give to get. Mandate fairness for all: give fairness to get fairness. If employees take a pay cut, management needs to do the same. Privileges of rank need to evaporate when the going gets tough, such as the holidays and other crunch times. If top performance is needed but only seniority is rewarded, don’t expect much in the performance area. Employees do as their managers do—not as they say. Employees who go the extra mile have managers who do the same. Reliable, dependable employees have reliable, dependable managers.

Repeat patterns of unscheduled absences usually mean one of three things: declining employee health, declining family or personal situations or declining employee relations. Employees are your most important asset. Take the steps now to ensure productive attendance so that your brand, customer relations and bottom line are stronger at the end of 2005.

This article first appeared on www.InsideIndianaBusiness.com. Nancy Ahlrichs Raichart’s two books, Manager of Choice: 5 Competencies for Cultivating Top Talent, and Competing for Talent: Key Recruitment and Retention Strategies for Becoming an Employer of Choice, may be found in large bookstores and on www.amazon.com.

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