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The Costs of Employee Absenteeism

The effects of chronic absenteeism on a company over time can take its toll. Three of the most costly are in the areas of morale, productivity and safety. Although separate issues, they all affect each other and they all can lead to monetary loss.


Employee Absenteeism

To be fair, we must make a distinction between excused and unexcused absences. Some circumstances cannot be prevented and will be absorbed by the company no matter what. No one really plans legitimate illness and emergencies. Normally, these circumstances are not frequent enough to cause a problem. For the purposes of this article, it is assumed that the absences described are not excusable, or habitual enough to be suspicious.


Employee morale is something that should not be taken lightly. Business suffers if employees are not happy. In the event that absent employees continue to misuse the PTO system in place, the workers left pick up the slack. This can cause resentment toward co-workers who are not carrying their weight. Eventually, this can build resentment against the company if managers fail to provide consequences for the absent employee’s behavior.

Resentment is not the only factor that affects morale. If company policies are not enforced consistently, disrespect for these policies become the obvious result. One employee that abuses the system is already disrespecting the company’s policies. If no consequences are enforced, other employees may follow suit.


Employee Productivity


No consequences for offending employees often is coupled with no incentives for hard working ones. If good employees are carrying the load of those not working, as well as witnessing managers who are not providing effective discipline for abuse, productivity suffers. Employees don’t need to work hard if they can slack off and still get paid!

Besides the lack of incentive, there is the very real issue of productive workers being overworked. It may be they continue to do their jobs diligently, but are unable to complete tasks due to an absent employee’s job being added to their daily load.

Deadlines on projects are also hard to meet if there are not enough workers to get the job done. These issues together create a lack of productivity, which is the backbone of any business. If you are not producing, you are not making money.


Safety at the workplace


Some jobs are more hazardous than others but one could argue that all companies perform some hazardous tasks. A good example of this is a convenience store, where the tasks are general retail and not considered dangerous. However, if the store is understaffed, it could make it a target for theft or other crimes that may be deterred by a stronger employee presence.

Large manufacturing plants often deal with injuries no matter how well staffed. Imagine how much more hazardous a job becomes when handling heavy machinery or stock without sufficient employee coverage. A two person job that is reduced to one employee poses a significant risk of injury.

Employees injured at work results in a monetary burden on companies. The cost of medical care is immediate but can also be long lasting. The company also is dealing with yet another absence, which is what caused the problem in the first place.

There is also the unthinkable circumstance in which an employee dies, which proves costly in more ways than one. There is no adequate compensation for this sad situation.




The clues to solving a chronic employee absentee problem are given in the breakdown of the costs. The reasons for the issue stem from lack of communication, lack of discipline, and lack of rewards. If a company is having trouble with PTO abuse, these three areas can be addressed simply enough as follows:

– Communicate Clearly –

Adequate training and refresher courses for employees and managers alike leaves staffers unable to plead ignorance. Keep employees and managers informed and up to date if changes are made.

– Discipline Appropriately –

Habitual offenders need consequences. Give the absent employee a chance to correct the behavior. Other employees will see this and will respect the policies and the managers who enforce them. Consistency is the key. No favorites and no exceptions.

– Reward Hard Workers –

Don’t forget to reward hard workers. They’ve earned it. For example, a company can provide incentive by handing out plaques and a gift card for perfect attendance or a job well done.

Implemented together, these solutions will correct a problem with PTO abuse. Stopping the problem in its tracks helps avoid the costly results of chronic employee absenteeism.



Article provided by Neches FCU, with locations in Port Neches, Nederland and Beaumont.
Neches FCU is a Texas credit union and has a courteous and attentive team of professionals ready to provide services to our members. When its doors open at any of the several service centers, the mission of “Ultimate Member Satisfaction” becomes the imperative for every employee. They are respected for a personal, dynamic and upbeat work atmosphere, providing a memorable service experience, and where members are known by name.
Neches has approximately $438 Million in assets with over 45,000 members. Neches FCU is considered by members and the business community as one of the best credit unions in Texas and an actively involved partner, helping our Family, Friends and Community!

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