Previously, we grouped absenteeism and incapacity together. But in Benefits Barometer 2014: Fine-tuning the employee benefits system we have separated them as they often affect different sectors. For instance, the education sector is subject to high levels of absenteeism, but incapacity is unlikely. In Benefits Barometer 2013: The employee benefits system we identified absenteeism in the workplace as a direct cause of lost productivity for an employer. When absenteeism is not managed correctly, employees tend to view their sick leave as an entitlement, using their full benefit.
Monitoring and managing sick leave effectively is critical to detect disability claims before they occur, since temporary absence may be a sign of a disability claim that could become protracted. Employee assistance programmes and absenteeism monitoring are cost-effective interventions to prevent an illness or injury from turning into a permanent disability claim.
Absence due to sickness has increased over time. In 2013, at any time, 3.7% of South Africa’s workforce was on sick leave. This is up from the 3.4% that was reported in 2012. In 2013 alone, lost output due to absenteeism totalled R4.29 billion indirect costs. Cumulatively since 2000, the economy has lost R55.2 billion (in real terms) due to absenteeism.
The direct cost of absenteeism is easily calculated as the costs of paying an employee who is absent from work their salary or wages. But the indirect cost of absenteeism is more difficult to measure. Some of the indirect costs include:
Studies have shown that around 43.7% of agency workers are employed as substitutes for absent employees.
Industry rules of thumb indicate that the indirect costs of absenteeism can amount to as much as three times the direct costs of the employee being absent from work.
Another pressing issue for employers is that of presenteeism – the practice of employees coming to work despite illness, injury or anxiety over personal issues. Presenteeism can also have a direct impact on productivity since, despite physically being at work, the employee produces sub-standard work, if any work at all. Employees who come to work despite illness may be contagious and could infect colleagues, making the situation even worse.
Managing presenteeism by using employee engagement surveys and conducting regular performance reviews will save employers money in the long term.