Illness Costs Employers

Employee absences inflict costs on businesses equal to 8.7 percent of payroll, according to a new study released recently. That’s the combined cost for both unplanned sick days and extended disability absences. On average, an employee takes 5.4 sick days per year. Workers paid by the hour rack up more sick days, on average, than salaried employees. Exempt employees take 3.9 unplanned sick days per year. Nonexempt salaried employees take 4.9 days. Nonunion hourly employees take 5.8 days, and union hourly employees take 7.3 days.

Unplanned sick days resulted in the highest level of productivity loss, as defined by, “Work that is missed or postponed by not being covered by others.” The productivity loss for unplanned sick days was measured at 19 percent, compared with 13 percent for planned absences and 16 percent for extended absences. The research was conducted by human resource consulting firm, Mercer, on behalf of Kronos, a workforce management solutions company.

According to Michele Deziel, senior director, core product line, Kronos, “What this survey shows is that employers can control labor costs and increase productivity by better tracking and controlling their absence related expenses, and minimizing unplanned absences.”

The, “Survey on the Total Financial Impact of Employee Absences,” was researched on the Internet in the spring of 2010. Altogether, 276 organizations responded from all major industry segments, sizes, and regions throughout the country. The full report can be downloaded at kronos.com.