Tips for Managing and Reducing Employee Turnover

Unscheduled absenteeism is a chronic problem for U.S. employers, conservatively costing $3,600 per hourly employee per year, and $2,650 per salaried employee per year. About one in ten workers are absent when he or she should be at work. That’s 9% of the hourly workforce. 

Compared to other costs, the 1% increase in payroll costs to cover for absent workers goes almost unnoticed while healthcare costs, for example, seem to always be in focus. The reason may be that absenteeism rarely appears in any reports that corporate managers see on a regular basis while health care costs are a line item.

The direct costs accumulate through (1) Lost productivity: shortages of employees can result in demand not being met, leading to dissatisfied customers; (2) High cost replacement workers: overtime levels are 28% higher in facilities with high absenteeism than facilities with low absenteeism. This causes payroll costs to be almost 50% higher; (3) Excess staffing: headcount is higher than necessary to cover unplanned absences.

Here are a few solutions to keep these costs to a minimum:

1. Create a healthy work environment to minimize employees’ paid time off (PTO) by utilizing proper tools, machinery, and ergonomic practices. Accomplishing a positive shift in the workplace can help reduce high turnover, improve the quality of goods and services, and also positively affect safety issues.

2. Set clear attendance expectations. In the carrot and stick style enforcement, the carrot can be more effective by implementing programs designed to improve employee wellness, keeping employees motivated and engaged, rewarding good attendance and keeping the workplace clean and attractive. Managing cleanliness, noise, and air quality is a positive step towards encouraging your team to continue productivity.

3. Workplace absenteeism in “greener buildings” is less than half of that in conventional buildings.3 Deep cleaning to remove dust from floors and filtration that permanently trap harmful contaminants in the air (including dust and dander) means more effective workers and more time and money saved.

Taking these three solutions into consideration can dramatically impact employee absenteeism. They keys to improving employee health, increasing productivity, and saving both time and money are to keep in mind a healthy work environment, clear attendance expectations, and “green” environmental practices. 

1.    Circadian’s Shiftwork Practices
2.    HR Daily Advisor
3.    Michigan State University Study 2010