How much is ‘Employee Absenteeism’ costing your company?

Posted on 10 / Tue / 2009 by admin


Difficult economic times have put a strain on the business world, forcing companies to re-organize their business plans. Employers are working diligently to establish innovative, efficient ways to better manage costs and reduce or eliminate unnecessary expenses.

One of those expenses familiar to most of us is ‘Employee absenteeism.’ Studies continue to shed light on the fact that the cost of employee absence has considerable impact on a company’s productivity; yet, the majority of companies have made no attempt to analyze or control these costs!

According to the International Public Management Association for Human Resources:

“The cost of absences represents a growing burden on employers, and many organizations are using absence managers to help them track, manage, and reduce absences throughout the organization. According to CCH Inc., a Rosewood, Ill., company that provides employment law information for human resources professionals, unscheduled employee absenteeism costs an average of $755 per employee per year.”

While it would be impossible for businesses to plan for every leave occurrence among their employees, one aspect they can control is the ability to implement programs that will effectively:

  • Track and manage employee leaves
  • Reduce employee absences and assist on the return to work process
  • Measure and reduce direct and indirect leave related costs

Gradually, more employers are introducing work-life, wellness, and absence control programs in an attempt to counteract the increasing costs of employee absenteeism. Companies that do have these programs in place are quickly realizing the benefits of tracking, measuring, and better managing their workforce. By implementing an integrated, systematic approach to managing human capital leave, employers can experience a multiple return on their investment within the first year. This ROI is accomplished by simply reducing lost work days and overtime pay.

Use of a consistent absence management approach eliminates costly variation in practices, improves operational efficiency and ensures appropriate resource allocation and management.

Patrick Kalnas is a graduate of Vanderbilt University and Carnegie Mellon University’s Master of Public Management Program. Over his career, Mr. Kalnas has been an advisor and consultant to dozens of companies in the areas of absence management, human resources and risk management. He used these experiences, including the knowledge he gained from co-founding a computer consulting company in 1991, to found pihms Inc and develop the company’s flagship product, an integrated health and productivity management software solution for employers. In 2007, Mr. Kalnas and pihms Inc. received a patent on their best-practice business process which is embedded in the various pihms solutions. Mr. Kalnas has presented on the subjects of health, productivity, and risk management to employer audiences both nationally and abroad. In addition to Mr. Kalnas being the CEO, he also serves on the Board of Directors for pihms Inc.

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