What you’ve probably intuited about employee absence is true: It is costly, in terms of profit, efficiency, and compliance. Then again, not granting time off for vacation, holidays, planned, unplanned, or extended leave would be inhumane (and give you a pretty rotten reputation as an employer). The hit to morale would bleed right through to your productivity.

There’s a line between a decent paid time off policy—one that enables employees to get the R&R they need and to address illness or other challenges—and a policy (or lack thereof) that puts your organization in jeopardy.

If you’re like most employers, however, you probably have no idea about the true cost of employee absence in your operation.

shutterstock_163962758That’s Square One.

Until you can break down exactly how much time off is costing you (the average is 35% of base payroll), finding your way to an appropriate PTO policy is impossible. The cost of absence isn’t always obvious and includes intangibles like increased stress and additional workload for present employees.

In a new White Paper by our human resources information system provider Kronos Incorporated, research into employee absence shows that it’s often misunderstood.

“While most other expenses for an organization, including most benefit programs, have clearly defined costs, employee absence is an area that is often not carefully tracked, or even when it is does not easily reveal its full costs,” said Michael Klachefsky, principal and absence management practice leader at Mercer Consulting. “In a simplistic view, absences are sometimes seen as having no extra costs since they are largely included in payroll expenses.

“But most managers know that absences do affect an organization’s customer service, staffing, and attainment of production and other business objectives. Otherwise, there would be no need to manage them.”

It’s just that “how” to manage absences can get tricky.

We’ve found that a clear attendance policy, paired with an accurate, up-to-the-minute time tracking solution, goes a long way toward making absence manageable. We’re glad to see that the research by Mercer and Kronos outlined in the White Paper echoes that sentiment.

So put us in your calendar. We’d be delighted to tell you more.