Employees who call in sick cost your company money, and it’s not just the loss of work time of a sick employee. Absenteeism hurts business in many different ways:

  • Cost of wages for absent employees
  • Cost of temporary replacements for the absent employee
  • HR and administrative costs tracking absences
  • Lowered productivity, because the loss of that employee may have a ripple effect that impacts productivity across more than one department
  • Higher management costs if high-salaried employees fill in doing simple but necessary tasks during an absence
  • Service and product quality issues that can, even in the short term, hurt your company brand

Add it up and you may be using a lot of business revenue to cover that employee’s absence.

There’s opportunity to reduce the negative impact on company activities when you plan ahead and create a clear employee statement regarding absences and paid time off (PTO)

1. Maintain careful records

Of course, HR and payroll will be aware of absences, but every absence should be documented in each employee’s file. This information may be useful in the case of an employee termination for substandard performance.

2. Keep managers informed

Department heads and other managers aren’t always provided with employee data indicating absentee patterns, employees who have numerous unexplained absences, and other vital information to get the team working cohesively. Provide managers with regular data on absenteeism for employees within their oversight and discuss how to lower incidents of PTO.

3. Use your staff wisely

An employee absence often involves shuffling employee schedules (a small, hidden cost). Instead of extending employee hours into expensive overtime, use employees who haven’t met the overtime threshold to help reduce worker replacement costs. When covering an absent employee, don’t sacrifice quality of services or products. That can create a branding problem that may undermine your business for years.

4. Create a sick day policy that applies to all employees

You don’t want a rash of Monday sick days, but you also don’t want employees who are sick and contagious bringing the “bug” into the office and infecting other workers. Provide employees with paid sick days to keep them home when they really are sick to prevent the spread of contagion. However, track employee absences to look for patterns that could indicate an unhappy employee taking advantage of your company’s PTO policies.

5. Make good employee health a top company objective

Provide healthy snacks in the break room. Offer free flu shots in the office or plant. Sponsor company sports teams. Help employees pay for gym memberships. Create a walking path around the workplace. Clean the office HVAC systems regularly, and keep the workplace clean and free of disease-carrying materials. (This is especially true in the food service industry where one sick worker can make hundreds of customers ill.)

Employee absenteeism is more than a re-scheduling headache. It can be corrosive, eating away at the company’s bottom line. Take a pro-active stance on absenteeism, keep management informed, establish a sick day policy, and encourage contagious employees to stay home to prevent the spread of disease.

If you want a healthy bottom line, you need healthy employees.


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank. Nevada State Bank is a division of Zions Bancorporation, N.A. Member FDIC