2004 CCH Unscheduled Absence Survey
2004 CCH Unscheduled Absence Survey
Unscheduled Employee Absenteeism Rises to Five-Year High
Low Morale Continues to
Take Toll in Higher Costs, Rates of Absence
Four Generations Now on
the Job: Curbing Future Absenteeism May Require New Look at Workforce
ILL., October 7, 2004) – The rate of unscheduled absenteeism has climbed
to a five-year high of 2.4 percent, according to the findings of the 14th annual CCH
Unscheduled Absence Survey by CCH INCORPORATED (CCH), with last-minute
no-shows costing organizations an average of $610 per employee. CCH is
a leading provider of employment law information and software (hr.cch.com)
and a Wolters Kluwer company. Most employees who fail to show up for work,
however, aren’t physically ill, according to the survey. In fact, only
38 percent of unscheduled absences are due to Personal Illness, while
62 percent are for other reasons, including Family Issues (23 percent), Personal
Needs (18 percent), Stress (11 percent) and Entitlement Mentality (10
According to the 2004 CCH Unscheduled Absence
Survey, conducted for CCH by Harris Interactive®, the
absenteeism rate rose to 2.4 percent in 2004 up from 1.9 percent in 2003,
while the average annual per-employee cost of absenteeism declined slightly
to $610, from $645 in 2003. The annual cost of employee no-shows can
range from an estimated $60,000 for small employers to over a million
dollars annually for large companies.
“The tight economy seems to have helped companies in holding
the per-employee cost of absenteeism steady, but with the rate of unscheduled
absences increasing, the overall out-of-pocket cost to employers rises
accordingly,” said Lori Rosen, J.D., CCH workplace analyst, and author
of HR Networking: Work-Life Benefits. “This trend makes it all
the more important to closely examine why employees aren’t showing up for
work and what work-life and absence control programs can be used to help
stem the tide.”
One trend that also may be influencing the higher rate of
unscheduled absences is the fact that the number of employers allowing
employees to carry over sick time from one year to the next is trending
downward and has dropped from more than one-half of companies (51 percent)
in 2000 to 37 percent in 2004. As a result, employees may be saying, “I’d
rather use it than lose it,” noted Rosen.
Companies with low morale saw significantly higher rates
and costs of unscheduled absences. In fact, rates of unscheduled absenteeism
are more than one-third (35 percent) higher among companies with Poor/Fair morale
(2.9 percent) than those with Good/Very Good morale (1.9 percent).
The survey also found that organizations increased the number
of work-life programs offered, after two years of pulling back on such
benefits. Surprisingly, however, about one fourth (23 percent) of those
surveyed expect demographic changes in their workforce will affect the
work-life programs offered by their company.
“We know with certainty today that morale has an impact
on unscheduled absence rates and the associated costs to employers. Now,
with a workforce that for the first time includes four generations of employees
– all at different life stages with different needs for balancing
their work and personal lives – it is concerning that little attention
is being given to the intergenerational issues in planning, developing
work-life programs. This short-sightedness could have long-term ramifications,
not just on the costs and rates of absenteeism, but on many other issues
around recruitment, retention and morale,” said Theresa Houck, a
CCH work-life benefits analyst. The CCH Unscheduled Absence
conducted annually by CCH for the past 14 years, is the definitive survey
on absenteeism in the workplace and the only one that measures costs associated
with unscheduled absences.
Conducted for CCH by Harris Interactive, the worldwide market
research and consulting leader, the survey reflects experiences of human
resource executives in U.S. companies and organizations of all sizes and
across various businesses and not-for-profit industry sectors. (See “About
the Survey” at the end of this release.) Results of the survey appear
in the October 6, 2004, issue of CCH Human Resources Management Ideas & Trends,
a newsletter for HR professionals.
to Make a Difference
The effects of morale are reflected across the board in
the CCH survey. As noted, the 2004 CCH Unscheduled Absence Survey found
that employee morale can affect a company’s absenteeism rate. Organizations
reporting Good/Very Good morale experienced a 1.9-percent rate of
unscheduled absences while those reporting Poor/Fair morale had
a rate of 2.9 percent. Similar to last year, 60 percent of respondents
indicated morale at their company as Good/Very Good while
40 percent rated morale as Poor/Fair.
This low morale has a high price tag. Overall, the CCH survey
found that employers set aside an average of 4.7 percent of their budgets
for absenteeism. When morale is factored in, however, organizations with Poor/Fair morale
set aside 4.9 percent of their budgets to cover the costs of absent workers
compared to just 4.0 percent in organizations with Good/Very Good morale.
Morale also influences the reasons people call in sick at
the last minute. Organizations reporting Poor/Fair morale were more
likely to experience unscheduled absenteeism due to Stress (15 percent)
than organizations reporting morale as Good/Very Good (10 percent).
Also, while only 17 percent of organizations reporting Good/Very Good morale
believe that unscheduled absenteeism is a serious problem for them, 43
percent of organizations reporting low morale find it a serious issue.
Additionally, more than one-third (37 percent) of companies
with Poor/Fair morale reported an increase in unscheduled absences
over the past two years while only 15 percent of companies with Good/Very
Good morale reported an increase.
“It’s clear that unhealthy work environments breed undesirable
work practices. Employers need to understand the bottom-line impact morale
has and make the investment needed to get at the root causes of their morale
issues. This often means taking an honest look at their management and
corporate programs and policies, as well as making the effort required
to really understand their workforce,” said Rosen.
According to the CCH survey, organizations now use an average
of 8 work-life programs, up from 7 in 2003. The increase in work-life programs
is across the board. Notable are the overall increases in programs that
offer employee flexibility and those related to health and fitness, as
well as the increase in eldercare programs.
Of the programs ranking highest in curbing unscheduled absences,
the top four ―Alternative Work Arrangement, Leave for School
Functions, Telecommuting and Compressed Work Week ―provide
employees with greater control over when and where they work. Each of these
programs showed an increase in use from 2003.
“Assuming that companies are putting the right programs
in place for their workforce, it generally takes time for the adoption
of work-life programs to have an impact on absenteeism rates,” said Rosen.
“But the increase in flexible work arrangements should be good news to
many employees not only in better managing their time but also boosting
their morale as these programs send the underlying message that the employer
trusts the worker to get the job done.”
The number of employers offering Eldercare programs
also has significantly increased, from 20 percent in 2003 to 32 percent
in 2004. AARP and the National Alliance for Caregiving estimate that of the more
than 44 million caregivers providing unpaid care to another adult and of
those that work, an estimated 59 percent either work or have worked while
providing care and over 60 percent have had to make adjustments in their
work life or quit their jobs.
According to the CCH survey, the increased adoption of Eldercare programs
now puts it on par with both Emergency Child-Care (offered by 31
percent of organizations) and On-Site Childcare (offered by 29 percent).
However, when asked if demographic changes in the workforce
would affect their work-life programs, three-in-four companies (77 percent)
believed it would not.
“The fact that more companies
are offering eldercare programs is good news for the millions of employees
who are caring for an aging spouse, parent or other relative. However,
if companies are not looking at the life stages of employees when evaluating
their work-life programs, they will inevitably neglect one or more segment
of their workforce. They may find older employers, more accustomed to
traditional work hours and environments, resent younger employees who value
workplace flexibility, or that childless employees resent that so many
benefits seem geared toward working parents,” said Houck. “While companies
tend to be hesitant to change their programs because it can be costly,
it’s short-sighted to stay with the status quo as there are also many costs
associated with inaction.”
On a scale of 1 to 5 (with 5 being most effective), the
work-life programs ranked highest for reducing unscheduled absences are Alternative
Work Arrangements (3.4); Leave for School Functions, Telecommuting, Compressed
Work Week and On-site Child Care (each at 3.2); and Wellness
Programs and Emergency Child Care, each at 3.0.
and Use of Work-life Programs
| Work-life Program
(1: Not Very Effective to
5: Very Effective)
Alternative Work Arrangement
Leave for School Functions
|Compressed Work Week
On-site Child Care
Emergency Child Care
Employee Assistance Plans
On-site Health Services
Programs Effective to a Point
While respondents reported an increase in the use of work-life
programs, they have decreased the use of absence control programs, now
using 5.0 such programs, down from 5.6 last year.
Disciplinary Action remains
the single-most used absence control program, with 91 percent of surveyed
organizations reporting use. The other leading absence control programs
in use are Yearly Review (79 percent), Verification of Illness (76
percent), Paid Leave Banks (63 percent) and both No Fault and Personal
Recognition, each used by 59 percent of organizations.
The use of Paid Leave Banks (also known as Paid Time
Off) continued to climb in popularity from 59 percent in 2003 to 63 percent
this year. Paid Leave Banks along with Disciplinary Action were
rated as the most effective absence control programs, each earning a rating
of 3.5 on a scale of 1 to 5.
Paid Leave Banks provide
employees with a bank of hours to be used for various purposes instead
of traditional separate leave programs for sick, vacation and personal
time. Disciplinary Action, as the name implies, penalizes employees
for being absent.
Employers gave Buy Back programs an effectiveness
rating of 3.3, followed by Bonus programs, with a rating
of 3.2. Under a Buy Back program, the employer “buys back” in cash
or vacation time all or some of the employee’s unused sick time. While Disciplinary
Action is the most used program, Buy Back programs are the least
used, with 48 percent of employers reporting use.
Notably, organizations with Good/Very Good morale
rated the overall effectiveness of both their absence control policies
and work-life programs 42 percent higher, at 3.8, than did their counterparts
with Poor/Fair morale, at 2.2.
Effectiveness and Use of Absence Control
(1: Not Very Effective
to 5: Very Effective)
Paid Leave Bank
Verification of Illness
Offering Fewer Sick Days
This year’s survey found that full-time employees were offered
less sick time on average last year, but continued to use about the same
amount of sick time as in the year before. On average, companies granted
6.9 sick days to employees in the past year, down from 7.6 days in 2003,
and employees used 5.8 days compared to 5.6 in last year’s survey.
Calling in Sick vs. Coming to Work Sick
Presenteeism – a situation where employees come to work
even though they are ill and pose potential problems of contagion and lower
productivity – continues to be an emerging area of concern. Similar to
last year, the first time when employers were asked about this issue, 39
percent of respondents indicated that presenteeism is a problem in their
Morale again had an impact: Despite higher rates of unscheduled
absenteeism overall, companies with low morale have more ill workers showing
up for work. In fact, 52 percent of organizations with Poor/Fair morale
reported presenteesim was a problem, while just 31 percent of organizations
reporting Good/Very Good morale saw presenteeism as an issue.
“Obviously employers want their employees on the job and
using as few sick days as possible. But a sick employee may not be doing
their employer or co-workers a favor if their illness jeopardizes the health
or productivity of their colleagues,” said Rosen.
The 2004 CCH Unscheduled Absence Survey covering
305 human resource executives in U.S. companies and organizations of all
sizes and across major industry segments in 45 states and the District
of Columbia was conducted online by Harris Interactive from June 30, 2004,
through July 23, 2004. The survey reflects experiences of randomly polled
organizations with an estimated total of more than one million employees.
The CCH Human Resources Management Ideas & Trends newsletter
sponsored the survey. The data were weighted to reflect industry distribution
as represented in the Society for Human Resource Management. In theory,
with probability samples of this size, one can say with 95 percent certainty
that the results have a sampling error of +/-6 percentage points. This
online sample was not a probability sample.
Mean absence rates were calculated by dividing total paid-unscheduled
absence hours by total paid-productive hours. Scheduled absences, such
as vacation, legal holidays, jury duty, personal time and bereavement leave
were not included. These costs to companies only reflect the direct payroll
costs for absent employees; the associated costs of overtime pay for other
employees, hiring temporary employees to cover for absent workers and lost
productivity add to the considerable financial impact of low morale to
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