You know absent employees cost you, but exactly how much will surprise you: about 35% of base payroll. No kidding. Or so says the Survey on the Total Financial Impact of Employee Absences.
That staggering number includes direct costs (wages and benefits) and indirect costs (lost productivity or replacement workers) but not the administrative outlay for managing the absence, and it includes incidental and extended absences.
So what’s an employer to do? To a certain extent, accept it. Absences—especially extended absences for family and medical leave—are an inevitable part of doing business. What you can address is how efficiently you’re managing those absences. Here’s a hint: tracking manually isn’t your best bet. That’s especially true if you’re dealing with the Family Medical Leave Act, which claims leave time for about 13 of every 100 employees in a given year. Finding coverage while employees are out is an expensive endeavor unto itself, which is why in so many cases productivity takes a hit (also tremendously expensive—and tough to recover from).
With dozens and dozens of laws related to employee leave, failing to keep close track of eligibility, time taken, and so on, can become the most expensive aspect of managing leave, to the tune of trial costs that can escalate infinitely.
The intricacies of paid and unpaid leave, changing leave status, qualification for FMLA, and so on, put many employers on uncertain ground.
Protecting your company can be challenging, but it boils down to two critical elements:
- A well-defined policy regarding leave of every kind.
- An automated time tracking and labor management system.
Doesn’t look so daunting, right?
If you don’t have a firm set of policies in place and in every employee’s hand, start there, and start right away. For reasons that extend far past absence and into every aspect of employment, ensuring that each employee has read and is responsible for your policies can head off a lifetime of challenges—and help you address those that arise despite your best efforts. I’ve talked about this elsewhere, and I’m sure I’ll keep talking about it because it’s critically important and yet consistently overlooked.
Once you’ve crossed that bridge, you’re halfway home. Your next step is to find an automated time tracking and labor management system that will give you deep insight into how your employees are getting their jobs done and give you the best tools to deal effectively and efficiently with the inevitable absences. And a lot of the other inevitables that come with running a business.