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Employee absenteeism rate is an important metric for small-to-medium-sized businesses to track, helping managers and HR professionals to understand how often employees are absent from work, and why. In turn, this information allows them to identify issues, giving them the opportunity to implement solutions. Many SMBs choose to use employee absence management software to simplify the tracking process and ensure that they’re able to calculate absenteeism rates accurately.
In this article, we’re going to delve deeper into absence rates, exploring why it’s an important metric to measure, how to calculate sickness absence rates, and how to analyse this data to improve employee engagement and overall business operations.
What is an absenteeism rate?
Absenteeism rate refers to how many unexpected absences an employee has due to sickness or personal reasons. It’s usually calculated annually and expressed as a percentage. The absence rate usually doesn’t include approved absences such as annual leave, although there may be some instances where including this data could be beneficial.
While it’s normal for workers to have occasional time off for legitimate reasons such as physical or mental illness or a family emergency, frequent or habitual days off are a sign of absenteeism, which can harm productivity and morale. In our annual sick leave report, we found that the number of sick days taken across the UK has increased significantly over the last five years, with companies reporting 128 days of sick leave in 128, compared to 81 in 2019. It’s therefore really important for SMBs to track absence and take proactive measures to reduce them to minimise impact.
Why is it important to measure absence rates?
Calculating absenteeism rates allows managers and HR professionals to identify patterns in absenteeism, which could signify deeper problems within the organisation. It also allows you to track the effectiveness of any strategies put in place to address high rates. By benchmarking average rates for your industry, you can gain a better understanding of how your business is performing, and whether you need to take action.
High absenteeism can contribute to a number of problems for your organisation, including:
- Poor quality of work
- Reduced productivity
- Increased employee turnover
- Lost profits
- Customer dissatisfaction
Each of these issues can incur both direct and indirect costs for your business, which can be particularly devastating for SMBs. The higher the absence rate, the more money you’re losing on an annual basis. Understanding how to calculate sickness absence rate, why it’s important, and how to remedy high absence rates, can help your business to boost productivity, increase profits, and minimise recruitment costs.
What causes absenteeism?
Absenteeism can be caused by a variety of different factors, which makes it a complex issue to address. However, by regularly monitoring absence within your organisation, you can implement suitable strategies to address absenteeism in the workplace.
The top reasons for employee absenteeism include:
- Illness
- Family responsibilities
- Workplace dissatisfaction
- Poor work-life balance
- Stress and burnout
- Insufficient support systems
Let’s look at each of these reasons in more detail.
Illness
Illness covers a wide range of different circumstances, including minor sickness, acute medical conditions, physical injuries and poor mental health. It’s therefore important to make sure that your strategy for reducing days off for illness is both comprehensive and supportive. For example, you would use a different approach for an employee who takes off a couple of days for a cold and an employee who is absent from work for several weeks with a broken leg.
Family responsibilities
Each employee is a unique individual with their own lives outside of work, which means that they sometimes need to take time off during normal business hours to support their loved ones. Responsibilities such as childcare, looking after an elderly relative or a family emergency may require them to be at home or attend appointments, and as these circumstances are often unexpected, they can negatively impact productivity.
Workplace dissatisfaction
Employees who are dissatisfied with their roles or the working environment are less likely to feel motivated to attend. This could point to any number of issues that could make being at work unpleasant, such as poor leadership, not feeling challenged in their role, or even being the victim of workplace harassment. Failure to address the underlying causes of employee dissatisfaction can lead to the occasional day off turning into chronic absenteeism.
Poor work-life balance
Juggling the demands of their job with their personal life can be challenging, particularly after remote working during the COVID-19 pandemic gave many employees a taste of the flexibility of not being tied to a single location. Not being able to find the right balance can lead to increased absence rates. For example, rather than booking a day’s holiday, they may choose to take an unauthorised day off so they can be present for home repairs, take their car for an MOT, or even attend a social event.
Stress and burnout
High levels of stress and burnout can lead to an increase in absenteeism rates, impacting productivity and potentially placing even more stress on employees as they try to keep up. Our annual sick leave report showed that annual leave taken in the UK dropped by 7.67% from 2022 to 2023. This suggests that employees are opting not to take the leave that they’re entitled to because they feel pressured to work more, meaning they’re working more and resting less.
Insufficient support systems
No matter how long an employee has been with the company or in their specific role, it’s important that they have a suitable support system in place. Not knowing who they can turn to should an issue arise could mean that employees feel less engaged and more likely to avoid addressing the situation. As well as leading to increased burnout and dissatisfaction, this lack of support could cause costly errors for your business.
How to calculate sickness absence rate
Calculating absence rate uses the following formula:
(number of absent days ÷ number of working days) x 100
You need to know the number of days an employee was absent during a particular period, then divide it by the number of available working days in that same period. Finally, multiply this number by 100 to get a percentage.
Remember not to include bank holidays, annual leave or non-working days such as weekends or days that the employee isn’t scheduled to work. You can also use the formula for multiple employees at once by multiplying the number of working days by the total number of employees. Let’s look at an example.
You have 50 members of staff and want to work out the absence rate for the last month. There are 20 possible working days during the month and, in total, your employees have missed 50 days of work.
- First, calculate the number of available working days: 20 x 500 = 1,000
- Then divide the number of absences by the number of working days: 50 / 1,000 = 0.05
- Finally, multiply the result by 100: 0.05 x 100 = 5
In this example, the absenteeism rate is 5%.
5 strategies to reduce absence rate
If your absenteeism is high, you need to figure out why and put strategies in place to address the underlying causes of absenteeism in your workplace. Let’s explore some ways that you can do this.
1. Track and monitor absenteeism rates
Tracking and monitoring is an essential part of any strategy to minimise absenteeism. By making sure to regularly calculate absenteeism rates in your organisation, you can benchmark your organisation against others in your industry, identify whether there is an ongoing problem with absenteeism, and track the success of your improvement strategies.
2. Improve employee engagement
Employees who don’t feel engaged or motivated at work are more likely to take time off. Improving employee engagement is therefore a great strategy for reducing absenteeism, and also offers wider benefits such as increased productivity and staff retention. Encourage employees to provide feedback on their experience and make sure to address any issues identified.
3. Introduce flexible working
Implementing hybrid working arrangements can help to minimise unauthorised absences by giving employees the flexibility to complete their role from home when personal or family responsibilities would otherwise take them out of work. It also allows employees to avoid some of the stress of attending in person, such as commuting or working in a noisy environment, reducing the impact of stress and burnout.
4. Implement employee wellbeing programs
Strategies that focus on employee wellbeing can help to keep them happy and healthy both inside and outside the workplace. This can reduce the need for them to take days off for mental or physical health reasons, helping to improve absence throughout your business. Offering flexible benefits packages is a great solution, as it allows employees to choose the wellbeing programs that best suit their needs.
5. Use tools to support absence management
Using absence management software is a great way to monitor and calculate absenteeism rates efficiently. By integrating with other HR tools and automating reports, these specialised tools streamline manual tasks for your HR and management teams, allowing them to focus on implementing strategies to address the underlying issues and create a happier, more motivated workforce.
Monitor and reduce your absenteeism rate with PeopleHR
As we’ve seen, calculating absence rates within your organisation can provide a wealth of information, helping HR and management professionals to improve the employee experience and increase productivity. By understanding the reasons behind staff absences, you can better focus on implementing effective solutions that support your employees while also benefiting your business.
PeopleHR’s absence management software has all the tools you need to track absenteeism rates accurately and efficiently, unlocking valuable insights for your organisation. To find out more, contact, or explore our free demo to see the software in action.
