How to reduce absenteeism in your workforce

Aifric Boylan


written on May 8, 2017

Absenteeism is a massive cost to Australian employers, and thus to the Australian economy in general. What can HR do to lower the levels of it in their organisation?

A large survey published by the Australian Industry Group (AIG) in 2015 estimated that absenteeism directly costs organisations $578 per employee per day of absence. In direct costs alone, the loss to the economy is said to be in excess of $44 billion per annum. It’s a staggering amount.

On average, Australian employees are taking around ten sick days per year. In the UK, the figure stands at about nine days per year, while in the US it stands at approximately five unscheduled days annually per employee.

However, whilst 74 per cent of employers recognised absenteeism as a “significant cost to their business, leading to a considerable risk of competitive disadvantage”, less than 50 per cent had actually taken the step to develop a dedicated policy to manage it.  It’s hard to understand this, when the advantages to employers and employees in having good policy in place are so clear.

But before employers devise a sick leave policy, it’s important to understand some of the reasons why people take sick leave in the first place.  Obviously, the baseline physical and mental health of the workforce is of central importance.  But there are other significant factors.

Research from 2003-4 (the Hallis Turnover and Absenteeism study) on the matter conducted showed that certain employees tend to take more sick leave than others. These include workers with primary school-aged children (sick leave rose 20 per cent during school holidays), employees with one child, employees with carer responsibilities, younger employees, union members, contact centre employees, and shift workers.

Those taking the least amount of sick leave were satisfied employees who felt they had a comfortable workplace and a good relationship with their boss, employees with multiple dependents, and higher income earners.

How to reduce absenteeism

Tackling absenteeism should not be about pitching employer against employee – it is an issue that needs to be addressed in a very holistic way, with everyone on board. Obviously, the overarching culture and morale in a workplace is a fundamental factor.  People need to feel happy, motivated and valued in their role. Certain subgroups may need more targeted support in the workplace, such as increased flexibility in work practices and other measures which acknowledge specific features of their work or home life.

Workplace health programs have been shown to increase productivity and work satisfaction among employees. Typically these initiatives involve a preventive element –  for example, smoking cessation schemes, personal fitness and healthy eating programs, health education etc.  There also may be elements that provide employees with access to healthcare for chronic conditions, or when they are acutely unwell.

(Check out our articles on healthy eating in the workplace, and examples of how the best companies approach wellbeing.)

Numerous studies (including the Chapman LS, Art of Health Promotion, 2003) show that workplace health schemes have significant benefits for employers – with evidence citing a 27 per cent reduction in sick-leave absenteeism, 26 per cent reduction in health-care costs, 32 per cent reduction in workers’ compensation and disability-management cost claims; and a nearly six to one return on investment ratio.

With society experiencing a shortage in doctors and the increasing prevalence of new digital health services, companies are now seeking innovative solutions to effectively deliver workplace health programs. One-third of large U.S. employers currently offer telehealth and telemedicine services to their employees.

With the ongoing rapid development of new apps and remote patient monitoring, it will increasingly be possible to assess, monitor and treat a whole range of medical conditions that previously might have been neglected or even completely undetected due to the inconvenience of taking time off work for medical appointments, or through a simple lack of awareness. If embraced, in the context of a robust workplace health program, innovations like this can ultimately help to deliver a true win-win situation – a reduction in costs to the employer and the economy, and a healthier happier workforce.

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2 thoughts on “How to reduce absenteeism in your workforce

  1. While this article is insightful and correct, it offers no constructive actions that would help reduce absenteeism in the workplace with the exception of addressing culture & morale and adding more cost of workplace programs such as health programs. What about a robust reporting mechanism, return to work discussions, increased awareness of how it hinders business too?

    1. Hi, agree with Tanya, I thought there might be some useful tips in here to work with, the approach put forward is very broad although can see that the Health and Well being teams within an organisation (if they have one) along with HR Officers, Business Partners etc. could work together on some longer term initiatives. Further agree with comments around robust reporting, managers and staff with excessive sick leave talking and putting in place plans to reduce, non work related programs etc. Managers always find the discussion with staff difficult tips around that conversation would be good. Larger organisations may well be advantaged by having a project dedicated to looking at sick leave over a period of time to understand what sections of the business have higher sick leave and then exploring as to why that may be the case…

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