If you’ve ever just watched people at work, you’ll find that many times they’re late or completely absent from work for days on end. We may be able to make a connection in our reasoning that all these people who are 10 minutes late can add up to a lot of lost revenue for the company. The problem is how to control attendance issues and still treat everyone fairly.
A CCH study on unexcused absenteeism indicates that 83% of employers feel that unexcused absenteeism will continue to increase. The problem is that absenteeism costs have been on the rise and now hover around $800 per employee per year. It doesn’t sound like much, but when this cost is multiplied by 10 or 20 employees, the numbers speak for themselves.
Absenteeism and Punctuality Policies
Having an absenteeism and punctuality policy is important for any business with employees. Such policies help keep records of missed work time, encourage employees to report to work, and establish a case for termination when an employee fails to meet the obligation of their terms of employment. The right type of policy can save your business tons of money over the years.
The first thing an owner must determine is the status of their employees. Salaried and professional employees are generally considered “exempt,” while hourly workers are “non-exempt.” Exempt means that employees are not based on their time at work but on their job function. They can work longer hours without paying overtime. Non-exempt employees are paid for every minute they are on the job and are entitled to overtime pay.
Hourly or non-exempt workers may have their wages reduced each time they miss work while employed or unless the workers are unable to do so. For example, if a salaried worker misses 4 hours a day but works part of that day, his salary cannot be affected. The only time a salaried worker can see their salary adjusted is when they are on leave or when they miss a full day for personal reasons. Punishing a salaried worker for tardiness by adjusting his salary creates the risk of entitlement to overtime.
Support policies vary from company to company and from state to state. However, the best attendance policies often have a progressive component. For example, verbal warning, written warning, suspension, and termination would be part of a progressive discipline policy. The other method that could be used is the point system. As the worker receives points for attendance, he will incur greater discipline. Once you have reached the threshold, you will be fired.
Using a progressive absenteeism policy ensures that all workers are treated fairly. They are warned every time they are disciplined and cannot plead ignorance. In addition, the documentation provided at each level of the discipline gives an appearance of professionalism on behalf of the organization and a sense of fairness for the employee.
Salaried workers can be under the same progressive assistance system as an hourly worker. The difference is that their salary cannot be deducted. Eleven should also consider that salaried workers should be given notes to file instead of employee counseling (discipline) reports so that their “at will” status is not jeopardized.
According to the US Bureau of Labor Statistics, a total of 2.8 million work days are lost each year due to illness or injury. Assuming the average worker earned around 40K per year, we would add 35% to bring benefits to a total compensation cost of 54K per year per employee. If we divide these 54K by 2,080 worked in a year, we get a labor cost of $25.96/hour. The absence of just one employee for one day would cost the average company around $207.68 per day. So if you have 10 absences a year, your cost would be around $2,000. This figure does not include the cost of actual profit that you would have lost because you did not complete your products or services.
Methods to reduce absenteeism
1.) No-Fault Support Policy
2.) Progressive Discipline
3.) Incentives for good attendance.
4.) Make the workplace more fun.
5.) Pre-employment drug and physical exams.
6.) Conduct employment history research prior to hiring.
7.) Value the assistance and contribution of each worker.
8.) Attendance must be included as one of the criteria for raises/promotions.
9.) Request medical documentation for all unexcused absences.