Absence Management in HR: Tracking & Improving Absenteeism

Tracking Absenteeism in organizations is many times a challenge that HR teams struggle to deal with. It could be because the number of employees, employment statuses and job roles vary in an organization, especially if the workforce is large. 

This is where absence management comes into play to improve absenteeism. But it requires thorough planning and a systemic approach to utilize absence management in HR for tracking and improving absenteeism. 

Here, we will discuss what is absenteeism, how do you track it and how absence management can help improve absenteeism. 

Understanding Employee Absenteeism

Simply put, Absenteeism means the absence of an employee during working hours, for one or more working days. It could be for involuntary reasons (e.g., illness) or voluntary (e.g., strike or willful absence).

If an employee is absent at office intentionally, It not only amounts to negligence of duty but is also direct insubordination. 

Yes, there are times when unwanted mishaps or accidents can cause an employee to not show up at work, uninformed. But those are exceptional cases that cannot lead to negligence of duty. 

Adverse Effects of Employee Absenteeism

Employee absenteeism happens when team members are unable to attend the office. Attendance is the most basic factor of one’s salary. Thus, if employees are absent, it will negatively impact their salaries or wages. 

Also, when employees are absent, it hampers their team and the organization’s productivity. In addition, as productivity affects performance, management is forced to make new rules or take action against unauthorized absences. This reduces the employees’ morale as well as the overall workplace morale.  Thus absenteeism directly hurts attendance management in HR. 

💥 Due to injury or accident

💥 Urgent family issues, like taking care of an ill family member

💥 Political turmoil that may be deemed too dangerous

💥 Feeling stressed or burned out

💥 Poor working conditions

💥 Voluntarily leaving a job without notice

💥 Facing workplace harassment or feeling unsafe

💥 Low job satisfaction

💥 Neglecting duty

💥 Unaware of office leave policies 

There are other reasons for employee absenteeism but the above ones are seen most often. And effects or impacts they make on the organization can at times be detrimental. 

The Impacts of Employee Absenteeism

So, what are the impacts of absenteeism on organizations? 

First of all, absenteeism affects productivity significantly which in turn hampers growth or profitability. Stats across the world indicate this issue. 

In the US, 3.1% of employees are absent from work, creating a loss of around 1.7% in total hours of work. Moreover, the Center for Disease Control and Prevention (CDC) informs that absenteeism in the U.S. costs employers $225.8 billion annually in productivity losses. This is $1.685 per employee.

Absenteeism conditions in Europe are also not any better. As per research, 21% of the European Union employers face a higher absenteeism rate as compared to last year. The European Foundation for the Improvement of Living and Working Conditions estimates that the cost of absenteeism in the workplace could hit $470 billion in the European Union alone, more than double that of the United States.

In Australia, the situation gets even worse with employee absence going up 2.6 days per employee per annum, from 11.2 days in 2019 to 13.8 days per in 2022. This is a 23% increase. 

Absenteeism also impacts coworkers adversely, affecting their synchronization and discipline. These happen when absentees’ irregularity in office encourages others to do the same. Also, as colleagues are dependent on each other for teamwork and tasks, the processes can get delayed badly. 

Ways of Tracking and Measuring Absenteeism

One way to track absenteeism is by using time-tracking software. Your employees will come to the office and give their time via thumb or facial recognition. There are well-known punch machines that detect the thumbprints and add them to the system database. 

This though is best to count in and out times for attendance. That is why having online, cloud-based, or in-house leave management software helps the cause. Employees can submit their leave applications there or submit their leave to HR who can input in there. This keeps a count of who is absent without permission. 

Absenteeism Rate Calculation for HR 

You can measure absenteeism in several ways. Here are the two most common ones: 

Individual Absenteeism Rate

Days: You can divide an employee’s total absences in a specified time by the total workdays in the specified time frame and then multiply the result by 100. 

For example, if Mr. X has five unauthorized absences in a month, the formula would be:

• (5 days / 20 days) x 100 = 25%

Hours: If you are calculating the absence of an hourly rated worker or waged worker, then divide the employee’s total absences missed hours in the specified time frame by the total work hours in the specified time frame and multiply the result by 100. 

For example, Mr. Y has missed six full days and four extra hours. The formula would be 

• (52 hours / 160 hours) x 100 = 32.5%. Please note that 160 hours comes from 20 days of possible workdays x 8 hours each = 160 hours of work each month.

Absence Management to Tackle Absenteeism

So, given the absenteeism, turnover, and lack of well-being of employees across the world, employers and HR personnel need to think of ways to improve their organizational attendance and culture. 

And that is where Absence Management comes into play. It is one of your best options to tackle absenteeism and find solutions to unauthorized absences. 

Absence management is a strategic approach that HR personnel implement to reduce unplanned employee absenteeism and mitigate the effects. This approach tries to minimize the possible disruptions caused by the absences and maximize workforce productivity.

It is an important program that ensures the effects of absenteeism are removed or at least reduced, so the unreported absences don’t yield poor productivity. 

How to Implement Absence Management?

Absence management is implemented through policies and action plans that are created to track and reduce unplanned leaves. Some ways to implement it are:

💽 Using an Attendance Management Software

Including advanced and automated solutions boosts and streamlines your absence management processes. Especially if the software is AI-powered, you can save time and event costs, as fewer resources will be needed to manage absences and leaves. 

Go for some solid paid time-off software in the market that not only helps in leave management but also helps you track unreported absences. 

💵 Adding Incentives 

HR teams can come up with Incentive plans like attendance bonuses, special allowances, and non-cash incentives. Non-cash incentives may include recognizing employees’ hard work through certificates or gifts. These can also be flexible working hours when needed.  

📋 Clear Policies on Absence

The management, through the HR department, should develop clear guidelines and policies based on attendance, absence, and leave. These documents should be accessible to all, either as soft copies via email or hard copies handed out to employees. 

🔎 Proof of Unreported Leave

As an HR, you can ask the employees of your organization to submit verification by a registered doctor or a medical certificate to prove their unscheduled or unreported absence due to illness. If they ask for sick leave, they should also submit a verification, of whether the leave is paid or unpaid. 

⏰ Allowing Time-off 

Allow substantial leave or time off to employees, even if it’s not a special case. For instance, you can enable one-month paid paternity leave like many territories across the world do for maternity leave. Maternity may also be extended or made more flexible, as per FMLA, for your female workers. 

You can also allow your employees a week or two of paid vacation with their families. Or, let your employee enjoy a day off watching his or her favorite team play in the NFL or UEFA. 

🕘 Allow Flexible Working Hours

Hybrid work systems are becoming increasingly popular. Letting employees work at their preferred time from their preferred place keeps them invested in the organization. They feel valued and refreshed whenever they are working. Yes, they will have a deadline to submit their work. But, how and at what times they work, should be up to them. 

💪 Develop Wellness Programs

These days wellness and employee wellbeing programs are becoming popular in workplaces, too. Companies are focused on keeping their employees satisfied and well. You can try that, too, by bringing in experts in the field to speak at workshops or seminars. Or, you can arrange wellness or fitness sessions to improve employee morale. 

Benefits of Absence Management

Because of the rise in employee wellbeing practices, the U.S. absence management market, which was estimated at USD 272.8 million in 2022, is expected to grow to USD 672.96 million by 2032, a CAGR of 9.5%.

So, what are the benefits that are pushing this absence management market to the forefront? Let’s see. 

❇️ Discipline

There is a theory in psychology known as the Hawthorne Effect.  It states that people will modify their behavior simply because they are being observed. Just like that, when you have absence management systems or processes set up in your organization, your employees feel observed and maintain proper attendance. 

Now this does not mean they will feel controlled. Rather, it becomes a matter of understanding what the company expects from them and performing accordingly, without neglecting duty. 

❇️ Better Productivity

Robust absence management helps in improving productivity as unreported absences tend to diminish. Line managers know when a team member might be absent from work, helping them make temporary transfers of duties. Also, employees avoid going on absences unless necessary. 

❇️ Stronger Team Bonds

When employees are absent, their team members feel a bit frustrated with work, especially if the absence is sudden, without notice, and/or more than a few days.  Synchronized teamwork falters and there might be some interpersonal conflict. 

Thus, absence management ensures all team members are on the same page and aligned with each other in their plans and work. 

❇️ Attendance Awareness

Absence Management assists both employees and employers know about their attendance issues. For instance, if an employee has to take time off due to urgency, then he or she can submit a request to the attendance system. Now, the system may be online on mobile, or simply via messaging. This will help HR know about the possible absence, saving the absent employee from questioning for absence.  

❇️ Compliance with Labor or Employment Laws

Ensuring employees attend the office regularly through absence management via strong policies and systems will facilitate employers to meet legal employment compliance. As there are many laws across the world, especially in major economies like the US, UK, Australia, Japan, etc., both employers and employees need safety from legal infringements in case the other party goes against them. 

❇️ A Better Place to Work

At the end of the day, managing absences will make your workplace a better place to work and grow. It would be a win-win situation for both the employer and employees. 

Challenges of Absence Management

Like any change management effort, including absence management to tackle absenteeism will have its perils. Major obstacles in your path to tackling absenteeism include:

1. Resistance to Change: Employees might not want to adhere to new policies or systems, either due to fear of being centrally controlled or inability to work with attendance management software. 
2. Cost of Installing: If you install an absence management software, you might need to invest more. But if the investment feels more than the possible return, then as an HR person, you will not be allowed to set it up. 
3. Compliance with Labor Laws: Though you would want to draft your policies as close to the employment laws of the land, there will be some factors that may not allow you to make the most favorable policies for the employees or employer. 
4. Attendance Software Issues: As the most optimum way to manage absences nowadays is through HR or attendance-based software, you might face technical issues that disrupt the system. This would obviously be a hassle that would need skilled IT personnel to solve, plus the possibility of additional costs. 
5. Remote Workers Tracking: Unless you are using software that directly monitors and tracks the time of remote workers for proper payroll, remote workers are a bit difficult to track through absence management. You will have to be careful in managing their discipline. 

To Sum up…

Absenteeism is a harmful occurrence for HR managers and management. It not only drops productivity but also hurts revenue generation in the long run. However, you cannot be apathetic when it comes to understanding the reasons for your employees’ absences. You would need to analyze and find out what is causing the absenteeism issues. 

Thus, ensuring robust absence management is compulsory to help mitigate attendance issues. And, it is best to have attendance or absence management software installed in your company which streamlines the processes. You can learn more about absenteeism and other HR issues, challenges, and solutions on our YoSuite Blog.