Employees in Australia can access generous workplace entitlements, especially paid time off due to sick and carer's leave or personal leave. Employees get 10 paid days off under the entitlements according to the National Employment Standards. However, there is a general perception of people taking advantage of these days and engaging in practices of 'chucking a sickie.' This may seem about just a day off but there is a deeper problem and a severe impact on organisations and companies. In this guide, we discuss why employee absenteeism matters, the cost of employee absenteeism, and strategies to reduce absenteeism.
Absenteeism in Australia
Absenteeism is when an employee misses work due to sickness, holidays, or personal matters. Employee absenteeism can impact workplaces negatively and often be a signal for wider problems. Between 80% to 90% of all absenteeism is reported for sick leave in Australia. Average absence rates in Australia are around 3.5% to 4.2% or between 7 and 9 days per employee per annum.
Why does absenteeism matter?
‘Chucking a sickie’ is an accepted practice but costing millions to Australian workplaces. According to research, unexpected absence of an employee can result in a cost of up to $340 per day. Absenteeism is an extremely expensive problem, resulting in 7% to 8% of total payroll costs when direct wages and indirect costs are factored in.
Excessive employee absenteeism can become challenging and also result in ripple effects when other employees see that 'chucking sickies' is acceptable and normalised in the workplace. It can also lead to management apathy, ignorance, or indifference.
Causes of employee absenteeism
It’s normal for your employees to fall sick occasionally, but if your employees are taking off too much time away from work, it can impact your productivity and business.
If you notice one of your employees is absent from work too often, it is best to act immediately. Sometimes the reason is sickness but there may be other underlying causes, such as bullying or discrimination. This is a time for clear communication before absenteeism costs you.
Short-term absenteeism is often the most problematic absence for businesses.
Short-term absence causes * Personal illness * Carer's leave * Chucking a sickie
Long-term absence causes * Prolonged illness * Mental health problems * Workplace and non-workplace injuries
Organisational causes * Increased workload * Toxic workplace culture * Lack of flexibility * Lack of support * Lack of clarity around role * Lack of management * Structural uncertainity
‘Chucking a sickie’ is a common tradition in Australian workplaces where employees tend to fake sickness so they can have a day off or spend time with the family. While not all employees may be faking sickness or are lying, it's essential you identify common causes of staff absenteeism so you know how motivated your employees are.
The costs of employee absenteeism
There are direct and indirect costs to employee absenteeism.
Direct Costs of Employee Absenteeism:
- Salary and payroll tax costs for absent employees
- Overtime costs (if you need to cover absent employees)
- Replacement labour hire
- Reduced workforce productivity
Indirect Costs of Employee Absenteeism:
- Admin work (leave application, approval etc)
- Handling last-minute work or shifts
- Operational work
- Service disruptions
- Increased health and safety risks
- Impact on employee morale
Managing employee absenteeism
There are strategies you can use to manage absenteeism in your business. It is important to notice absenteeism early, so give training to managers or supervisors and other employees to recognise when it’s happening.
Understand the cause of staff absenteeism - Understand the root causes of staff absenteeism so you can give them the support they need. For example, if your employees are taking too many days off due to higher workload, maybe reconsider dividing the work between the team members.
Offer flexible work options - You can promote flexible work arrangements, to recognise an employee’s personal life and obligations outside of work. Flexible work arrangements improve employee productivity and satisfaction. With no commute and lesser stress of in person workplaces, flexible work arrangements reduce employee absenteeism and make productive workplaces.
Record absences consistently - Have a software or tool that records attendances and absences clearly and consistently. Having these records help you to track employee attendance and understand their needs and performance.
Have an absenteeism policy - Your absenteeism policy should explain the number of absences and reasons that are considered acceptable. It should document how absences are recorded and computed.
Challenges to managing employee absenteeism
While it is imperative for productivity, organisations and companies face a lot of challenges while managing absenteeism.
Poor absence monitoring and tracking - Lack of information available and limited tracking.
Outdated technology - Relying on outdated technology or even manual systems to report and log absences.
Low manager engagement - Managers don’t want to engage with employees or communicate with them and supporting them.
Inadequate employee health support - Very few systems in place for burnout or stress.
Entitlement/sickie culture- The workplace culture is one of entitlement and doesn't often see short-term absences as worrying.
Privacy concerns- Employers are not allowed to manage absences or investigate.
Inconsistent data recording- There are no established processes to record absences. Employees can even text to take a day off work.
Lack of structure- There is no particular person or team responsible for it.
Steps to deal with absenteeism
Recording employee absences
When you keep good personal leave records, it is easier to spot patterns of absence. For example, absences may be always on the same day, or random throughout the month. If a regular pattern is developing, you need to follow clear procedures for absence, pay while absent, and taking informal and formal action.
Informal meeting
Set up an informal welfare meeting to discuss your employee’s health and their recent absences. This is not a disciplinary meeting, but they can have a support person with them. You need to explore the frequency and number of absences with them, looking for any possible causes and what can be done to prevent further absences.
Make sure the employee has a chance to tell their story. If their explanation is insufficient, you have to tell them there will be a disciplinary meeting at a later time and date.
Formal meeting
A disciplinary meeting is not so straightforward as an informal meeting. It must be conducted as per the employee contract and employee handbook. If you are still dissatisfied with their explanation, you need to give a warning about ending their employment.
If you are satisfied, and the employee is experiencing illness, you can discuss possible adjustments to help them do their job. This may be to the job itself, the location, or the method of working. Adjusting will help protect you from discrimination claims.
Manage staff absenteeism with Peninsula
The true cost of employee absenteeism is highlighting the importance of understanding the needs of your employees and staff members. It is a complex problem and business owners need to start looking at long term solutions to reducing absenteeism and improving employee morale. Peninsula has worked with thousands of businesses and employers helping them improve their workforce, engage talent, and boost productivity. Peninsula can help you with other strategies to minimise absenteeism in your business. Call our advice line on 1300883715 to learn more.
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