Absenteeism in the Workplace: A Full Guide

Absenteeism in the workplace is a common phenomenon, costing the US economy $84 billion annually. Absenteeism, also referred to as a “bottom-line killer”, impacts the availability of the workforce and the profitability of organizations. In this guide, we will dive into what absenteeism is, common causes, its impact, and we end with 13 effective absenteeism policies.

Contents
What is absenteeism? A definition
The impact of absenteeism in the workplace
Excessive absenteeism: A Benchmark
Causes of absenteeism
13 effective absenteeism policies
Conclusion
Frequently Asked Questions

What is absenteeism? A definition

Let’s start with a definition of absenteeism in the workplace, or employee absenteeism. Absenteeism is any failure to report for or remain at work as scheduled, regardless of the reason (Cascio & Boudreau, 2015). This is usually unplanned, for example, when someone falls ill, but can also be planned, for example during a strike or willful absence. The key to this definition is that the person was scheduled to work. This means that absenteeism does not include vacation, personal leave, jury-duty leave, or other reasons. Commonly used synonyms of absenteeism include absence, sickness, skipping, or taking leave.

Absenteeism in the workplace is most commonly measured using an absenteeism rate. This rate is the number of absent days divided by the number of available workdays in a given period. This absenteeism rate is a key HR indicator. For example, excessive absenteeism can indicate problems within the workforce or organizational culture. 

The impact of absenteeism in the workplace

Absenteeism can have a severe impact on the workplace. The Center for Disease Control and Prevention (CDC) reports that absenteeism in the U.S. costs employers $225.8 billion annually in productivity losses. This is $1.685 per employee.

Research by the European Foundation for the Improvement of Living and Working Conditions estimated that the cost of absenteeism in the workplace could reach around 2.5% of GDP in Europe. This would add up to a total cost of absenteeism of $470 billion in the European Union alone, more than doubling that of the United States.

If we dive more into the numbers, we will find that the cost of absence does not only include the cost of replacing the absent worker. It also includes productivity loss due to this replacement, co-worker productivity loss, and supervisor productivity loss. 

An international survey by SHRM indicates that productivity loss in the U.S. ranges from 22.6% for planned absence to 36.6% for unplanned absence. The productivity loss for the supervisor was 15.7%, and included tasks such as the administration of the absenteeism, adjusting workflows, and taking over certain tasks. 

On the individual level, high absenteeism may mean a loss of pay, absence discipline, accidents may happen when the individual returns to a less familiar work situation, and job perceptions may change as the employee may develop a reason or justification for explaining their absence. Besides the individual, their co-workers, workgroup, the organization, family and even society could be impacted.

An example of the impact of absence on society is, for example, nurses. Nurses work in high-stress roles and often display a higher degree of absence compared to other roles. This has a very tangible societal impact due to a decrease in the caretaking capacity.

The table below lists some of the negative consequences of work absenteeism on various people and entities.

Table based on Goodman & Atkin, 1984

Absence may also have a positive impact. The individual can rest and their stress will be reduced. Co-workers experience more job variety and have the opportunity to develop new skills, as well as receive overtime pay for their additional tasks. For workgroups and organizations, the knowledge base is expanded and the unit becomes more flexible in responding to absenteeism making the replacement of the absent worker easier.

Absenteeism Benchmark

Let’s start with an absenteeism benchmark before diving into the different causes of absence. Identifying these causes provides more information about the differences in absence rates between countries – but they are interesting to display nonetheless. 

There is a lot of reliable absence data for the US and the EU. The absence rate in the United States is 2.8%, while in the European Union the rate is around 4.7%. Workforce absenteeism rates in Canada are 3.5% on average, with 3.1% in the private sector and 5.1% in the public sector (Conference Board of Canada, 2015).

Below you will find the absence rates per industry as reported by the U.S. Bureau of Labor Statistics.

In the European Union, the absenteeism percentages are higher. This is based on the latest available data of the World Health Organization (WHO). The WHO reports on the number of absence days. We calculated these to a rate, assuming 251 working days per year, which is the European average.

The data above provides a good overview of employee absenteeism in different geographies in the Western world. There is a clear distinction between absenteeism rates in the United States and Europe. The question that remains is: what would be a good absenteeism rate? How low can absenteeism be in our organizations? 

What is a good absenteeism rate?

To understand what a good absence rate is, we need to separate illness-related absence from absence because of other reasons.

Illness-related absence is unavoidable. We all get the flu every few years. When this is the case, we have to stay home to get better. This means that although absence behavior can differ among individuals, on an aggregated level we can easily spot if absence in an organization is illness-related or related to other causes.

As a rule of thumb, 1.5% of aggregated absence is illness-related. This means that on average 4 workdays per year are spent at home because of illness. This has been found in work settings and school settings. For example, a 2012 study in the United States showed that illness-related absence averaged at 1.24% from October to May, while during influenza season it averaged 1.35%. Similar rates are shown in the graph below. 

Do keep in mind that this is an aggregated percentage. A person can have a higher percentage because he or she had bad luck and caught bronchitis and be ill for two weeks. However, when you have a large enough sample, 1.5% of absence is illness-related.

As a result, everything above this 1.5% rule of thumb is likely because of reasons other than illness. This can include personal issues, high levels of stress in a job, a bad relationship with the direct manager, or other work conflicts. This does not mean that this is the employee’s fault. It could be that the employee is stuck in a high-stress job with little resources to do the job well. However, most of the absence above 1.5% are preventable.

This means that as an organization, an average aggregated absence rate of well over 1.5% is cause for concern and should lead to targeted interventions, aimed at reducing absence to more acceptable levels. This could be a job analysis and redesign to make a job less stressful and more motivating, it could be a targeted intervention to promote employee wellness or an analysis of stressors in the employee’s work-setting. 

In order to understand absenteeism better, let’s look at common causes of absenteeism and common reasons behind high absenteeism rates.

Causes of Absenteeism

Compensation for sick leave

When we look at the causes of excessive absenteeism in the workplace, there are a few things that stand out. Let’s start by examining a country that has a very high absenteeism rate, like Norway. A 2009 report showed that on a typical day in Norway, an average of 6-7% of absence is reported. Here, workplaces in the 10^th percentile of the absence rate distribution had a rate of 3.1%, while workplaces in the 90^th percentile had an absence rate of around 11%. 

Although this data is fairly dated and changes per year, a contributing factor is that in Norway 100% of lost earnings due to absence are insured for the worker. A study on Swedish data between 1955 and 1999 showed that more generous compensation for sick leave tends to be associated with permanent increases in total sick leave per person employed and the other way around (Henrekson & Persson, 2003). 

A study in a large Italian bank showed similar results. Workers at this bank were protected against firing only after the twelfth week of tenure. The study showed that the number of days of absence per week more than doubles once employment protection was granted (Ichino et al., 2001).

Absenteeism and the economy: the opportunity cost of not working

Interestingly, this effect may not only be caused by worker protection. A one percentage point increase in a state’s unemployment rate is associated with a 0.54% reduction in that state’s mortality rates. In line with this, smoking and obesity increase when the economy strengthens, whereas physical activity is reduced and diet becomes less healthy. Diets and exercise improve when the unemployment rate rises (Ruhm, 2000).

However, that does not mean that sickness will go up during times of economic growth. A study in the United States showed an association between the unemployment rate and absence. This is likely due to an increase in job demands during a worsening of the economy, and a reduction of employee benefits, bonuses, and pay increases, as well as safety and health monitoring (Shoss & Penney, 2012).

This research shows that absenteeism is a complex and multi-faceted problem. One of the most interesting findings is that the higher the opportunity cost of not working, the less likely people are to be absent. Even though hard work may make them live unhealthier and more likely to die, a high cost of absence motivates them to go to work.

This effect also holds true on the micro-level, leading to several great absenteeism interventions that we will discuss in the final section of this article.

Sex differences in absence

There are also sex differences in absence behavior. Rates of absence for women are greater than those for men. This is both physiological as well as sociological. For example, when kids are ill it’s oftentimes the mother who stays home to take care of them. This leads to a higher absence frequency that usually doesn’t take that long.

Also, illness reasons are often different. Men suffer more from conditions in the neck and head (otorhinolaryngological) while women suffer more from psychiatric illnesses, including somatization and anxiety (Bermejo-Toro & Prieto-Ursúa, 2014).  

Substance abuse

Drinking and drug abuse is another driver for absenteeism. The U.S. 2008-2012 National Survey on Drug Use and Health showed that workers who reported misuse of prescription drugs were about 7% points more likely to report absent in the past month (a 200-300% increase over average absence levels) and were absent for an additional 0.25 days. 

An Australian study among 13,582 workers found that high-risk drinkers were up to 22 times more likely to be absent from work compared to low-risk drinkers and also more prone to be involved in accidents, injuries, and illness. With more than 40% of the workforce consuming alcohol at risky levels and alcohol-related absence heavily skewed among specific workforce subpopulations, it indicates scope for cost-effective targeted interventions.

Diabetes

Diabetes rates all over the U.S. are rising. The cost of reduced productivity due to diabetes was estimated to be $90 billion in the United States. This is up from $58 billion in 2007 and is only expected to increase. Lost productivity is shown through time lost from work due to illness, presenteeism, or even early retirement. 

Depression

The impact of depression across the world is considerable. The annual prevalence of depression in the U.S. was estimated at 9.66% with the average absence cost per person at $390. However, the estimated cost of presenteeism for depression was much higher, estimated at $5,524 (Evans-Lacko & Knapp, 2016).

Age

Age is another factor that influences absence. The older people are, the lower the likelihood of avoidable absence. This decreases their frequency of absence. However, with age the risk of chronic conditions increases leading to longer periods of absence.

13 effective absenteeism policies 

Based on the research we discussed earlier, there are several common reasons for absenteeism. Interventions or HR policies that counteract these effects can be good at reducing absenteeism in the workplace.

The goal of many of these interventions is often to increase the opportunity cost of not working. In general, the higher the cost of not working (i.e., having to go to a doctor to get a health slip, asking colleagues to take over shifts, and so on), the lower the absenteeism levels. This means that many of these can be highly effective in case of excessive absenteeism. However, when it is at a minimum (< 2%) level, they will be ineffective. In this case, you are already doing a great job at minimizing absence and most of these interventions will not make a difference.

Here are thirteen effective HR absenteeism policies.

1. Washing hands significantly reduces absence during the influenza season. If there is one thing we’re taking away from the Covid-19 pandemic it is that we should wash our hands for at least 20 seconds. Although results are mixed during the normal season, during the flu season, washing hands significantly reduces the rate of infections. Putting up signs for people to wash their hands when they come into the office, after going to the restroom, or before having lunch are easy but effective interventions.
2. Exercise frequency. A 2001 study showed that exercise frequency is negatively related to absenteeism. People who did not exercise were 50% more likely to get sick for more than 7 days during a given year than people who exercised three times a week. The details are displayed in the table below. The same study showed that even exercising just once a week already lead to a decrease of 30% in absence.

The odds ratio shows that people who don’t exercise are 50% more likely to get sick for more than 7 days in a given year than people who exercise two or three times a week.

Corporate wellness programs that are effective at getting people to exercise can, therefore, be effective.
3. Workplace health promotion (WPH). WHP is aimed at preventing illnesses. When effective, they reduce absence. These programs are especially effective among workers who have similar conditions (e.g., an alcohol consumption reduction program among blue-collar workers). Employee wellness programs are a good example of this.
4. Employee Assistance Program (EAP). EAPs are aimed at the rehabilitation of workers. These intervention programs are aimed at reducing absence and improving health.

5. Health screening. Timely screenings for conditions like high blood pressure, diabetes, and colorectal cancer can help to detect problems before they become dangerous for employees. These screenings help employees to stay healthy and reduce absenteeism.
6. Alcohol and Other Drug (AOD) management. AOD policies are strategies to inhibit drug abuse and often include written policies prohibiting the use of smoking, alcohol and/or drugs at work. While these can be effective to reduce high-risk drinking, they need to be more comprehensive to impact drug use. Notably, alcohol and drug testing in isolation do not appear to be related to reduced employee substance use or absenteeism. (Pidd, Kostadinov & Roche, 2015)
7. Drug testing. Mandatory drug testing is a commonly practiced policy in some areas of the world. These offer a proven way to reduce absence abuse. Although often unpopular, drug testing programs are in most cases cost-effective and reduce absenteeism – often at the cost of employee morale.
8. Depression treatment. Enhanced care for chronic diseases, like depression, can be highly effective. A 2004 study showed that patients in enhanced care reported 8.2% greater productivity and 28.4% less absenteeism over 2 years, resulting in an annual value of 2.601 USD per depressed full-time equivalent.
9. Creating commitment. Commitment to the organization and alignment with the organizational goals leads to lower absenteeism. Building organizational commitment and creating a shared vision that everybody is committed to, reduces absence.
10. Rescheduling responsibilities. Asking employees to reschedule their shifts themselves is another way to decrease absence behavior. This means that employees need to ask their colleagues to jump in and take over their shift, resulting in social pressure to show up.
11. Absence verification. Implementing a system where any kind of absence needs to be verified through medical documentation decreases absence. In the literature, this is called absence culture. If 1 or 2 days of illegitimate absence are tacitly accepted as if they were legitimate and unavoidable, they will become contagious (Gaziel, 2004).
12. Flexibility and autonomy. The degree of flexibility and autonomy that individual employees have also impacts their absence behavior. Research has shown that a higher degree of autonomy and flexibility in one’s work leads to lower absenteeism rate. This can be explained by a higher sense of responsibility for the work and the flexibility to plan around one’s ailment. In addition, restrictive behavior from the leader or supervisor leads to more absence (Gaziel, 2004).
13. Absence insurance. Absence insurances are another way to reduce the cost of absenteeism. Depending on the geography and local regulations, these can be effective ways to reduce the cost of employee absenteeism in case it might go up significantly due to disease, (workplace) accidents, or other causes.

Conclusion

This wraps up our guide on absenteeism in the workplace. There are many causes and an equally large number of consequences of absence behavior. The key here is that high absenteeism almost never happens in isolation. Oftentimes, there are other contributing factors, like a perception among workers of being ignored by management, an unpleasant organizational culture, mismanagement, or other factors.

This means that absenteeism interventions are most successful if they are part of a broader human resource strategy aimed at solving these issues. This means that these interventions should never happen in isolation but should align with improvements of other HR processes, including performance management, learning opportunities, and efforts to improve engagement.

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Erik van Vulpen

Erik van Vulpen is the founder and Dean of AIHR. He is an expert in shaping modern HR practices by bringing technological innovations into the HR context. He receives global recognition as an HR thought leader and regularly speaks on topics like People Analytics, Digital HR, and the Future of Work.

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