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How much does absenteeism cost YOUR company?

by , 10 March 2017
How much does absenteeism cost YOUR company?The truth is, the real cost of absenteeism can be extremely high, yet many companies still ignore it! In fact some companies don't even know how much absenteeism costs them.

For instance, did you know the cost of absenteeism to your company isn't only limited to your employee's salary for the day he's absent? The costs can actually go up to 3 times that amount taking into consideration the productive time lost.

That's why I'm writing to you today. Read on as I show you where the hidden costs of absenteeism lie and how to work out the costs of absenteeism in your company.

Stats SA says in South Africa, absenteeism costs SA employers R16 billion annually! This is because the costs associated with absenteeism include:

•    The actual salary cost of 'sick' leave;
•    Costs of alternative labour sources;
•    Productivity costs associated with stand-in labour;
•    Resentment by staff who have to pick up the slack for absent employees; and
•    Decline in morale of staff who witness ongoing absenteeism.

Read on to find out one way you can calculate how much absenteeism is costing your company.
 
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3 Absenteeism excuses you can penalise employees for
 
Excuse#1: 'I went to the clinic, but they were too busy to give me a sick note. I wasn't feeling well and I didn't want to wait for nurse to write a note.'

Excuse#2: 'I ran out of airtime and I couldn't buy any because I didn't have money. So I couldn't phone you to tell you I was sick.'

Excuse#3: 'I had to attend my aunt's cousin's daughter's wedding ceremony in Rustenburg. I only found out about it at the last minute.'

You've most probably heard these excuses, and many more, one too many times… Find out how to reject these excuses today.

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How much does absenteeism actually cost your company?

Absenteeism isn't just about your staff not being at work. It costs your company a great deal in money, time and productivity, not to mention your own frustration.

Here's how to calculate how much absenteeism costs your company.

Example

Mary earns R4 000 per month. She's absent from the workplace for a total of 7 working days this year.

Let's say Mary's productivity is equal to her earnings. And her replacement Fiona isn't as efficient as she is (as it is not her everyday job). So Fiona only works at a 75% productivity rate.

You can estimate the cost for this employee's absenteeism as follows:

7 days absent (out of 21.67 average working days per month) x R4 000 = R1 292.11


So:
•    Salary cost = R1 292.11 (sick leave)
•    Replacement staff cost = R1 292.11 (replacement staff salary)
•    Productivity loss = R323.03 (25% loss of productivity)
•    Not to mention loss of clients due to non-delivery!


Actual loss = R2 907.25

As you can see, the costs are much higher than just the cost of Mary's salary. And you can't put a price on the decline in morale and increase in resentment for the staff that have to cover for her.

Now just imagine if 100 employees are absent during the year. It could cost you an additional R290 725!

But don't despair… I have a solution for you. I want to put you in a room with HR Expert Janine Nieuwordt so she can show you how to legally manage absenteeism and leave effectively, so you can curb these excessive costs. Secure your place here.
 


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