Costs Of Absenteeism at Managerial Position

Employee absenteeism is a frequent habit, and companies that want to stop the sin face difficulties. Sickness, childcare, accidents, injuries, bullying, strict work schedules, and bad leadership are all potential causes of absenteeism. Also, when people fight against a change that has been made at work, it may lead to absence. Employees that are worn out and exhausted may abscond from their jobs by often missing work. The manager is responsible for regulating the frequency of employee absences from work. In order to reduce absenteeism, the manager must be aware of its causes and potential remedies. Absenteeism is considered a corporate profitability killer as the number of non-productive hours for employees increases with increased absenteeism. Every employer expects their workers to miss few days of work each year. If this is not controlled, decreased productivity, which in turn can majorly affect a company’s finances and other pertaining factors. This report takes an insightful look at the common causes of absenteeism and the effect it may have on the costs of production. Besides, the study covers various measures that can be taken by to reduce the rate of absenteeism in the executive role of a manager (Gangai, 2014). Considering the absenteeism of a manager often leads to a significant problem in some organizations, they too need to be kept in check in regards to the rate of absenteeism. In a report carried out in 2015 in the U.S., the department of labor (DOL) proved that an estimated 3 percent of the employer’s workforce had been absent on any given workday. The productivity of the organization that recorded the highest rate of absenteeism was significantly affected.

TABLE OF CONTENTS

1. Introduction …………………………………………………………………………… 4

2. What Is Absenteeism? ………………………………………………….....…….……... 4

3. Causes Of Absenteeism …………………………………...…………………….………5

3.1 Bullying And Harassment ………………………….………………………….……..…5

3.2 Child And Elderly Care ………………………………………………………………….5

3.3 Disengagement …………………………………………………..………………………6

3.4 Partial Shifts ……………………………………………………...……………………...6

3.5 Poor Leadership …………………………………………………………..……………..6

4. Factors Contributing Directly To The Costs Resulting From Absenteeism.…… …...………6

4.1 Payroll ……………………………………………………………………….…………6

4.2 The High Cost Of The Replacement Of Workers…………….……………....…………7

4.3 Overall Cost Of Administrative Management………………………….………….……7

5. Indirect Factors Contributing To The Costs Resulting From Absenteeism…….……………7

5.1 Production Inefficiencies …………………………………………………..………...…..7

5.2 Staff Morale ………………...………………………………………………...……….....7

5.3 Additional Training …………………………………………………………….………..7

5.4 Production Errors ………...…………………………………………………..…………8

6. Management Approaches To Deal With Absenteeism ………….………………..……..…..8

6.1 Use Of Specialized Software …………..………………………………………………..8

6.2 Health Initiatives ………………………….…………………………………………….8

6.3 Improving Morale ……………………………………………...………………………..8

7. Conclusion..……………………………………………..…………...………………………..9

8. Appendix …………………………………………………………………………………......11

1.0 Introduction

Workplace attendance is of great importance to any organization and contributes to the achievement of set goals and objectives. Absenteeism affects the cost of production and lowers company’s productivity. Besides, absenteeism harms the economy both directly and indirectly. The cost due to absenteeism rises inevitably, and the company experiences a reduction in the quality of the business entity’s goods and services. Taking into account how our prevailing business environment has tremendously changed every economic performance area becomes an essential entity in achieving the desired competitiveness. Therefore the executive and managers would wish to be absent for some considerable number of working days, and additional burdens imposed on their superiors and other employees. Human resource as a component will also require the managers to be responsible for executing their tasks to minimize the loss in the cost of production.

People may have varied reasons of taking time off work. Some are genuine requiring a fair and sensitive consideration, through procedures that are managed carefully. However, some workers get away with the lies they give in asking for permission off work with reasons that may not be necessarily genuine. Such scene of regular absence may turn to be demoralizing for worker who shows up at work. Absenteeism at the workplace creates common workplace conflicts through demotivation (Gangai, 2014). The employee will, in turn, suffer from a severe impact on motivation to carry out job-related tasks.

2.0 What is absenteeism?

Absenteeism can be termed as an employee’s habitual or even an intentional act of not showing at work. Absenteeism may vary from sick leave to time lost during industrial disputes (Hunt, Hosking, & Schriesheim, 2013). The types can also be grouped into three categories. The different absences are; partial shift scheduled and unscheduled absences. Scheduled may consist of personal or vacation time off work. Besides, the unplanned absences refer to disability, sick days and even worker’s compensation absence. Lastly, partial shift type occurs when a worker comes late at work, leaves earlier than required and also taking longer breaks than usual. However, there is some absenteeism that may be as a result of a sanctioned leave (Forte, 2017). They may include; long service leaves, maternity or parental leave and annual leave.

In recent times, important concepts of absenteeism have surfaced. These ideas predominantly arise from the psychological, sociological and economic perspectives. In regards to the psychological point of view, absenteeism thrives on an expectancy theory whereby, the employee motivation is derived from decisions they make to maximize their respective valued outcomes. It further deduces the preconceived expectations are to be met to dislodge absenteeism. In the sociological approach, the work setting and environment are the dimensions looked at in combining the economic and psychological concepts (Gangai, 2014). The external responsibilities are such as; family and personal obligations that not related to work. In respect to the economic perspective, the theory attempts to tackle absenteeism from the perspective choice of labor-leisure.

3.0 Causes of absenteeism

3.1 Bullying and harassment – Bullying and harassment have been a factor that has been causing absenteeism amongst employees. Victims end up being bullied and harassed by their fellow workers or even in our case, managers or people above them are involved. When this happens, the works, in turn, call in sick or make excuses to avoid any situation. Psychologists at the University of Manchester Institute of Science and Technology did a survey and found that the victims take seven more days of sick leave yearly compared to the other employees (Gangai, 2014). It is important to note that the managerial occupations, in this case, are the ones committing the acts.

3.2 Child and elderly care – Female managers are also likely to miss work to stay home to take care of their young ones and elderly. Considering nearly 80% of the female employees have children aging between 6 and 13 are working outside the home. Whenever the child is ill, the parent may request a day off to attend to the need (Hunt, Hosking, & Schriesheim, 2013).

3.3 Disengagement – Some managers who end up less interested or committed to their tasks at work are more likely not to show up at work in the name of lacking the motivation to do so (Gangai, 2014).

3.4 Partial shifts – Partial shift type occurs when a manager comes late at work, leaves earlier than required and also taking longer breaks than usual (Forte, 2017).

3.5 Poor Leadership – Employee commitment towards their jobs also dependant on executive leadership (Hunt, Hosking, & Schriesheim, 2013). Affected employees miss ten more days worked compared with other employees.

4.0 Factors contributing directly to the costs resulting from absenteeism

4.1 Payroll – It normally consists of wages that are associated with cases of unreported paid time off (PTO). To illustrate the payroll effect aspect, let’s assume a certain manager gets the following:

– Earns $35,000 per year exclusive of a benefits package of 20% of salary.

– The manager works 50 weeks at 5 days per week.

– Manager generates $174,000 in revenue.

When the manager is absent, he or she indeed directly affects the generated revenue. The latter is shown bellow. If he or she takes unearned 3 days PTO resulting in 1.2% of the days worked.

Deducing from the revenue generated, the worker will have an impact on

In getting the PTO payroll liability

Resulting to a total direct cost of $2,592 per a salaried manager per year.

4.2 The high cost of the replacement of workers – Taking into account that when a manager is absent and his or her role is required urgently, a replacement is done though on a short term. The payroll will be working at a rate of 150%. The extra 50 percent is a result of the absent manager being paid too (Forte, 2017).

4.3 Overall cost of administrative management – It takes time for the HR to find the replacement in time for the required duty. It may as well take longer for the fit replacement to be found thus rendering loss capacity and managerial time.

5.0 Indirect factors contributing to the costs resulting from absenteeism

5.1 Production inefficiencies – It may be in the form of higher turnover. Yearly turnover is lower in places with low rates of absenteeism as to facilities with higher level or rates of absenteeism. Making amends to the production inefficiencies, would save companies millions or revenue yearly (Kocakulah et al., 2016).

5.2 Staff morale – Poor morale may arise from situations where other employees cover for the absence of other in turn leading to resentment within. It is documented that absenteeism is considerably lower per year in companies exhibiting good morale as compared to facilities showing reduced confidence whose yearly rate of absenteeism is higher (Forte, 2017). Morale may also be attached to union relationship whereby, organizations that have good union relationships records lower absenteeism rates.

5.3 Additional training – Due to safety issues arising when less-trained employees perform duties without adhering to safety precautions, additional training might be required. Absenteeism is less in companies with fewer fatigue complaints as compared to facilities having fatigue problems. Noting that tired employees would lead to more frequent accidents.

5.4 Production errors – Related to the factor in question is the aspect of poor quality of both goods or services offered by the company. When the workers, in general, take repetitive tasks, they are likely to experience fatigue hence leading to production errors (Kocakulah et al., 2016).

6.0 Management approaches of dealing with absenteeism.

To achieve a significant reduction in the costs associated with absenteeism, the manager has to adopt a few tactics. Through reducing absenteeism rates and the associated prevailing effect on a business entity, the productivity of the organization increases. They can adapt the following techniques:

6.1 Use of specialized software –It should be the first step to accurately and efficiently manage absenteeism rates a regular basis by tracking them. The software will provide the managers with accurate reports and causes over time. Appendix 1 shows low absenteeism in entities using specialized software in order to manage the daily task scheduling by managers.

2. Health care initiatives – There exist a relationship between health care and absenteeism, and when properly managed, they result in increased productivity. It is logical to say, if employees are not at work due to sickness, their contribution towards attaining the organizational goals reduces. Frequent absenteeism can have adverse effects such as increased cost of management and employee replacement. For instance, in the US a survey was carried out in its organizations (Vignoli, Guglielmi, & Violante, 2016). Two-thirds of the number surveyed benefited from strategies promoting health through wellness programs geared at minimizing the chronic conditions.

3. Improving morale – The productivity of employees is linked to their levels of morale. Treating employees with respect boost their morale, and they tend to work harder and attain their performance targets. The manager should find ways of improving employee’s morale to reduce the rate of which they are getting absent from work.

7.0 Conclusion

Managers in every organization face the problem of absenteeism. Absenteeism affects the productivity of individual employees which in turn hurts the profitability of the organization. There are various causes of absenteeism such as poor leadership, accidents, childcare, change in the organization, or lack of motivation among the employees. Absenteeism increases the cost of hiring new employees and management expenses. Besides, attracts production efficiencies and affects employee morale. There are various approaches that managers can use to curb absenteeism such as the use of dedicated software, the introduction of healthcare initiatives, and adopting ways that improve employee’s morale. The software can be used to design work schedules such that the employees do not work under much pressure. Through healthcare initiatives, the well-being of the employees is assured. From the manager’s point of view, rampant absenteeism can cripple the operations of an organization. It is, therefore, the responsibility of the manager to devise effective ways to handle the habit of absenteeism.

References

Forte, A. N. (2017). Strategies for Reducing Employee Absenteeism for a Sustainable Future: A Bermuda Perspective(Doctoral dissertation, Walden University).

Gangai, K. N. (2014). ABSENTEEISM AT WORKPLACE: WHAT ARE THE FACTORS INFLUENCING TO IT?. International Journal of Organizational Behaviour & Management Perspectives, 3(4), 1258.

Hunt, J. G., Hosking, D. M., & Schriesheim, C. A. (Eds.). (2013). Leaders and managers: International perspectives on managerial behavior and leadership. Elsevier.

Kocakulah, M. C., Kelley, A. G., Mitchell, K. M., & Ruggieri, M. P. (2016). Absenteeism problems and costs: causes, effects and cures. The International Business & Economics Research Journal (Online), 15(3), 89.

Vignoli, M., Guglielmi, D., Bonfiglioli, R., & Violante, F. S. (2016). How job demands affect absenteeism? The mediating role of work–family conflict and exhaustion. International archives of occupational and environmental health, 89(1), 23-31.

Appendix

Appendix 1 showing low absenteeism in entities using specialized software in order to manage the daily task scheduling by managers (Forte, 2017).