Productivity Insight series sheds light on the hidden costs of employee absences

The cost of employee absence and disability may be perceived as trivial compared with the costs of employer-sponsored health plans. However, a new Productivity Insight paper shares research that reveals the indirect costs of absence also can be very costly to employers’ bottom lines and should be taken into consideration.

For example, A study by researchers at Cornell University estimated that the total cost of absence in teamwork environments averaged 1.3 times the wages/salary of the absent employee.

We have known this to be true intuitively. It makes sense that when a tight team experiences the loss of a key team member for a short or long period of time, interdependence is impacted. It also causes some group storming.  Based on Tuckman’s 4-stage of team development model, storming is the not so fun stage where conflict and confusion surface. For a Performing team, this is a jolt to group process, procedures and knocks teams off their game.

This is also true for companies that support cross-training to improve over all performance and employee engagement. From a team perspective, this is still an issue because the relationship portion of the roles, goals and relationship team security triangle gets knocked off balance.

However, measuring the total cost associated with absence and disability has long been a challenge for employers, brokers and consultants. For many of them, if there isn’t an obvious correcltation, then it can’t exist.

The paper, titled Productivity Insight #2: Health-Related Lost Productivity: The Full Cost of Absence,  expands upon the overview of the health-related lost productivity concept provided in Productivity Insight #1. This new installment in the series of papers explores the direct and indirect costs associated with absences and how productivity can get lost. The paper provides potential solutions for addressing absence- and disability-related costs and features a case study of an employer that has taken steps to strategically manage absence and disability in the workplace.

We thought this would be good for our members to access. You can get a copies of both reports with the links below:

1. First report Insight #1

2.Second report Insight #2

The recent research has shed light on the productivity and related profit loss that employers suffer when their experienced employees are absent. Surprisingly, replacement workers are up to 29 percent less efficient and up to 44 percent more expensive than the absent worker.  In light of this, a robust absence and disability management program makes solid business sense. It also makes sense to build your affinity teams so that relationships and work understanding are reinforced.

Programs like these can address the issues related to health-related lost productivity that are outlined in the latest Productivity Insight by identifying opportunities to keep at-risk employees on the job or return them to work faster.

For information about how to catalyze employees to champion initiatives like this, visit our TIGERS Certification and Licensing Program. We license consultants and HR team members with resources to build employee driven solutions that are trust, interdependence, genuineness, empathy, risk and success-based together with the consensus building and action planning facilitations that drive results remarkably fast.

Copyright TIGERS Success Series by Dianne Crampton