The simplicity of communication in today’s workplace brought about by modern technology offers numerous benefits, but that simplicity can come at a cost in the form of lost productivity and other consequences. Absenteeism is costing South African businesses thousands of rand every month, but when employees don’t even have to pick up the phone to call in sick because a brief text or email to their supervisor will suffice, businesses need to start thinking about mitigating risks, says Ouch! Founder, Kevin Howell.
Cost of absenteeism
According to the most recent data on the cost of absenteeism published in the Momentum Effective Employee Index in September 2018, local companies lose an estimated R25bn per year to absenteeism. Around half of this, according to the index, can be seen as “excessive absenteeism” meaning the amount of days employees are absent is over and above the reasonable amount expected for companies based on their size.
Absenteeism is defined as an employee’s intentional or habitual absence from work and it includes taking sick days when well, arriving late and leaving early, taking extended breaks, attending to private business during working hours, or unexplained absences away from the desk or the office.
In an age of obsession with data, it is interesting to note that many companies still don’t track employee absences or address the reasons behind them, despite the cost impact.
“In my experience, small- and medium-sized businesses blame a lack of resources while the big corporations seem to think they can carry the cost,” says Kevin. He adds that companies also avoid following up on absences because it is rarely a pleasant exercise, but that the conversation has to take place.
Cost to business
“When looking at the cost of absenteeism in the broader sense, i.e. the overall effect on our economy, it becomes clear that this mindset needs to change. Given the current economic climate, few employers can afford to continue to overlook the direct and indirect costs of absenteeism,” stresses Kevin.
The costs of absent employees include wages paid to absent employees, the cost of replacement or temporary workers, overtime pay for employees filling in, lost productivity and reduced quality of goods and services due to “fill-in”’ labour that is likely to be less productive or knowledgeable than the person they are filling in for. It also leads to low morale among employees who have to witness continuous absenteeism and carry the slack for absent employees. The day-to-day operations of a business are also affected.
“The average rate of absenteeism is 4% to 5% which represents a two to three-week absence per employee on an annual basis, resulting in a substantial loss of productivity and efficiency,” says Kevin.
Kevin adds that personal commitments, family obligations, stress and lack of motivation play a greater role in absenteeism than the odd cold or sprained ankle. A lack of discipline can also be added as a cause. He says that companies need to take a strategic approach to address absenteeism.
“This typically starts in the HR department where we recommend putting a strategy in place to foster a culture of employee discipline within the workforce along with additional pro-active measures such as physical and mental wellness programmes for employees. Ultimately though, best practice would be to implement a Time and Attendance tracking and management system. Day-to-day responsibility for managing Time and Attendance will usually fall to frontline managers, but they may not have the right tools at their disposal and as a result, may not take action such as following up on why an employee was absent,” says Kevin.
Ouch! has developed biometric and Time and Attendance management products, including a mobile app that manages employee attendance. A biometric employee clocking system that is linked to payroll software and provides regular reports on attendance is the best place to start. It also gives managers and team leaders a platform to collect time and attendance data.
“From here they can start to tackle the causes of absenteeism and start to enforce employee discipline. It can take as little as a month to start seeing this reflected in payroll savings. From there, the benefits start to extend to better morale and increased productivity. It’s a no brainer – harnessing technology to better manage absenteeism is a win-win,” concludes Kevin.
For more information, contact Ouch! on 086 111 OUCH or via www.getouch.co.za.
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