The cost of absenteeism

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The old adage that time equals money certainly rings true when you consider the costs involved when an employee is absent from work. The Oxford Dictionary defines absenteeism as the practice of regularly staying away from work or school without good reason. In other words, it excludes valid causes for missing work that are beyond one’s control, such as accidents or sickness.

On average, Australian employees take 8.8 unscheduled days off per year1. This costs employers approximately $578 per employee per absent day, with the annual cost of absenteeism to the Australian economy an estimated $44 billion per year2.

Despite these glaring figures, a lot of absenteeism goes unreported and is therefore unaddressed. The Australian HR Institute (AHRI) conducted a survey in 2016 which found that while 80% of respondents believe absence levels in their workplace could be reduced, 79% said their workplace did not record the cost of absence. The survey also revealed that besides the obvious financial expense, there are other costs to absenteeism, which include its effect on staff morale and workplace productivity3.

In order to address absenteeism in the workplace and its related costs, employers first need accurate attendance reports. Such information gives employers an insight into patterns of absenteeism and enables them to see which employees have been absent and how often this occurs over certain time periods. Using this information, they can then start getting answers as to the reasons why employees were regularly absent and begin adopting measures that will prevent future absenteeism.

In a modern context, the traditional methods of measuring workplace time and attendance – namely the manual time card or clock punch – are neither effective nor accurate. Often employees work remotely or outside of conventional business hours which make such manual methods redundant. This has led to the emergence of biometric scanners and time and attendance software.

Biometric scanners measure distinctive biological features of a person in order to give them access to a workplace or to log them in. The benefits of these include systems is that they reduce both time theft and the possibility of an employee clocking in on behalf of another. They also prevent employees from accessing controlled areas.

While biometric scanners provide a means for employees to clock on and off, time and attendance software provides employers the documentation they would require to monitor absenteeism. Such software-based attendance systems can be integrated with biometric technology or can operate without it.

A software-based attendance system allows employees to clock in and out using a mobile device, the Internet or a desktop PC. Managers can keep track of who is available and where employees are at any given time. Not only is this digital reporting more accurate, but the automated data it generates saves time and costs involved with HR and payroll administration.

Mitrefinch is a global leader in terms of its time and attendance software solutions. With over 30 years experience and 4,000 time and attendance workforce management projects worldwide, Mitrefinch understands how impactful the move to an automated time and attendance can be for a company. Importantly, its project team takes the time to understand each business individually and customize a solution that is specific to their needs.

One of the key advantages with Mitrefinch time and attendance solutions is that they offer a cloud-based option. Regardless of a company’s size or in-house IT capabilities, the software solution will seamlessly integrate with existing managerial processes and preferences.

1Australian HR Institute (AHRI) HR Pulse survey on Absence Management Report, March 2016

2AIG Absenteeism & Presenteeism Survey Report 2015

3Australian HR Institute (AHRI) HR Pulse survey on Absence Management Report, March 2016