Attendance and Punctuality Cost Large Companies Money

If you’ve ever simply watched people at work, you’ll find that many times they’re late or miss work altogether for days on end. We may be able to make a connection in our reasoning that all these people being 10 minutes late can add up to a lot of lost revenue for the company. The problem is how to control attendance issues and still treat everyone fairly.

A CCH study on unexcused absenteeism indicates that 83% of employers feel that unexcused absenteeism will continue to increase. The problem is that absenteeism costs have been rising and now hover around $800 per employee per year. It doesn’t sound like much, but when this cost is multiplied by 10 or 20 employees, the numbers speak for themselves.

Absenteeism and Punctuality Policies

Having an absenteeism and punctuality policy is important for any business with employees. Such policies help keep records of lost work time, encourage employees to come to work, and establish a case for termination when an employee fails to meet their terms of employment obligation. The right type of policy can save your business tons of money over the years.

The first thing an owner must determine is what state their employees are in. Salaried and professional employees are generally considered “exempt” while hourly workers are “non-exempt.” Exempt means that employees are not based on their time at work but rather on their job function. They can work more hours without paying overtime. Non-exempt employees are paid for every minute they are on the job and are entitled to overtime pay.

Hourly or non-exempt workers can have their pay reduced any time they miss work while on pay or unless the workers are unable to do so. For example, if a salaried worker misses 4 hours a day but works part of that day, his salary may not be affected. The only time a salaried worker can have his wages adjusted is when he is on leave or misses a full day for personal reasons. Punishing a salaried worker for being late by adjusting her wages risks entitlement to overtime.

Support policies vary from company to company and from state to state. However, the best attendance policies often have a progressive component. For example, verbal warning, written warning, suspension, and dismissal would be part of a progressive discipline policy. The other method that could be used is the point system. As the worker receives points for attendance, he will incur more discipline. Once he has reached the threshold, he will be fired.

Using a progressive absenteeism policy ensures that all workers are treated fairly. They are warned each time they are disciplined and cannot claim ignorance. In addition, the documentation provided at each level of discipline gives an appearance of professionalism on behalf of the organization and a sense of fairness to the employee.

Salaried workers may be under the same progressive assistance system as an hourly worker. The difference is that their salary cannot be deducted. Eleven should also consider that employed workers should receive notes to file instead of employee counseling (discipline) reports so that their “at will” status is not jeopardized.

According to the US Bureau of Labor Statistics, a total of 2.8 million work days are lost each year due to illness or injury. Assuming the average worker earned around 40K per year, we would add 35% to benefits to arrive at a total compensation cost of 54K per year per employee. If we divide this 54K by 2080 worked in a year, we get a labor cost of $25.96/hour. A single employee absent for one day would cost the average company about $207.68 per day. So if you have 10 absences a year, your cost would be around $2,000. This figure does not include the cost of the actual profit you would have lost because you did not finish your products or services.

Methods to Reduce Absenteeism

1.) No-Fault Support Policy

2.) Progressive Discipline

3.) Incentives for good attendance.

4.) Make the workplace more fun.

5.) Pre-employment drug and physical exams.

6.) Conduct employment history research before hiring.

7.) Assess the assistance and contribution of each worker.

8.) Attendance must be included as one of the criteria for raises/promotions.

9.) Request medical documentation for all unexcused absences.

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