Does Your Business Effectively Manage the Cost of Employee Absenteeism?

In order to keep your business running smoothly, you rely on your employees to show up to work each day and to complete their assigned duties. Without them, your business may not be able to provide the important services your clients have come to rely on. So, what do you do when you have employees who must be out for reasons unrelated to a medical concern? Does your business have a management plan in place?

In an article by Benefits Canada, a 2017 survey by Morneau Shepell lists the top five priorities for businesses looking to reduce costs and improve efficiency related to human resources issues. The top five items were:

1. 44% – Streamlining administration of human resources programs
2. 40% – Reducing short-term disability costs
3. 33% – Long-term disability costs
4. 32% – The costs of incidental absence
5.  29% – Employee compensation

While many companies often do not keep an accurate record of the costs associated with internal administration, incidental absenteeism and indirect disability costs (i.e. salaries for replacement workers, overtime pay, and workflow disruption), it is important to note that four out of these top five priorities are related to employee absenteeism and disability management.

According to Shepell’s survey, 52% of employees said their last absence was not due to a medical issue, but rather was related to child or elder care, or an issue with co-workers. For organizations that have high workplace stress and ineffective methods for managing employee support programs, the rate at which employees miss out on work days for non-medical reasons may continue to rise.

While it can be a challenge to manage the escalating costs of employee absenteeism, having a strategic plan in place (rather than using low to no management options) can help you to monitor your costs related to non-medical absences. From providing options for employees with mental illness concerns to accounting for high-stress work environments and having a method for employees to report issues that arise, your business may in fact see the benefits of having an active employee absenteeism plan in place.

At BlueRock Corporate Benefits, we are equipped to assist you with all your financial planning needs, and we would be happy to address the cost-benefit analysis of having a more manageable employee absenteeism plan in place. Contact us today to get started.