Why It’s Important to Track the Costs of Absences
Your employees may be your greatest business asset, but what happens when they miss work for long periods of time due to health concerns? Absenteeism is one of the most common employer concerns throughout Canada, yet many companies do not have an absence tracking system to help them understand the financial impact of lost productivity.
Tracking the costs of employee absences can give employers valuable insight into the impact on business operations and profitability.
Why your employees miss work
There are a wide variety of reasons that employees miss work for long periods of time. However, the most common reasons that employees miss work are related to injuries and illnesses.
- Injuries. Whether the employee is injured in an accident that occurs on the job or outside of work, the impact of the accident can range from minor to severe. For example, injuries to the back and neck can often result in absences over the course of several months.
- Physical illness. Employees may miss work for only a few days due to routine health issues, such as the common cold. However, sometimes employees have more serious health concerns that require surgery and several weeks of recovery. In either case, the employer will need to make arrangements to cover the employees’ work during planned and unplanned absences.
- Mental health concerns. Many people underestimate the economic impact of stress and other mental health issues in the workplace, but the World Health Organization estimates that the global economy loses in excess of $1 trillion per year due to absences related to depression and anxiety.
How an absence tracking system can benefit your organization
Employee absences lead to lost productivity, and there may also be expenses related to training replacement employees as well as fatigue of co-workers who must cover for the absent employee. An absence tracking system can provide valuable information to help employers make better decisions to manage the costs of absences.
- Track your compliance with provincial regulations. There are a variety of laws in Canada to protect employees who need to miss work to address their health concerns. An absence tracking system can help your organization demonstrate that it is compliant, thereby avoiding costly fines related to non-compliance.
- Maintain documentation in case of employee disputes. You may need documentation of absences in case of employment disputes, such as when you need to terminate your relationship with an employee. If an employee decides to file a wage claim or even a lawsuit after their employment ends, tracking the employee’s absences can help support your defense against the claim.
- Plan your business operations. Managers must be aware of current and future staffing levels in order to maintain consistent levels of productivity. An absence tracking system can help managers plan ahead when approving requests for time off and when they need to hire temporary employees to keep the business running smoothly.
- Understand the financial impact of absences. Absence tracking systems provide helpful reporting information for managers, such as the average number of consecutive sick days taken, the average duration and cost of employee absences, and more. This knowledge can help managers create more effective budgets and plans for their business operations.
- SAVE YOU MONEY! Having insight into employee absences can help the company mitigate disruptions, reduce slowdowns due to adjustments to the workflow, and manage costs associated with decreased productivity.
Implementing an absence tracking program requires an organization to carefully plan its policies, procedures, and communications to employees. Therefore, it is important to take the time to plan your next steps. By leveraging our expertise and support, you can implement an effective absence management program that allows employees the flexibility to address their health concerns while protecting your business finances.
Do you need help tracking the costs of employee absence in your organization? If so, contact TeksMed today to learn how we can help.