ORLANDO – Absences account for 35 percent of every organization’s annual payroll budget, said Colleen Daigle to an audience at the KronosWorks2011 conference in Orlando on Monday.
In her presentation, “The True Cost of Absence,” Kronos product marketing specialist Colleen Daigle cited a 2010 study by consulting firm Mercer in which respondents indicated that the total direct and indirect cost for absences equals more than a third of a company’s payroll resources.
“Absence costs much more than was previously thought,” said Daigle. “It is more expensive than healthcare costs, and it reduces the productivity of the entire organization.”
Daigle said there are three categories of absences: incidental (sick/personal days), extended (short term disability/family medical leave) and planned (vacation/holidays). Incidental and extended absences result in 8.7 percent of payroll costs each year.
“Lost productivity is a major cost when it comes to absences,” said Daigle. “For example, in healthcare, you have to find a replacement who is qualified enough to do the work. Replacement workers are more expensive and less efficient than the absent employee.”
Other negative impacts of absences include:
• Additional workload for colleagues
• Increased stress
• Added overtime salary
• Damaged team morale
• Reduced quality of work output
Daigle offered automation as a solution. Automation, she said allows organizations to manage its workforce, identify staffing trends and reduce compliance risks and employee relations problems such as turnover and low morale.
According to Daigle, the benefits of using workforce management software also include:
• Elimination of manual, labor-intensive processes
• Easy access to time off balances
• Abuse prevention for time off policies
• Improved workforce productivity
