Employee Absenteeism Rises Slightly, While Employers Still Struggle With High Cost Of "sick Time"

Reasons Other Than Physical Illness Biggest Worry for Employers, Stress Takes Toll on Workers

(RIVERWOODS, ILL., October 23, 2001) – Unscheduled employee absenteeism inched up this year after dipping to the lowest level in a decade last year, while employers continue to be hit hard by the high cost of "sick time," according to the findings of the 2001 CCH Unscheduled Absence Survey conducted by CCH INCORPORATED (CCH), a leading provider of human resources and employment law information (http://hr.cch.com).

According to the latest CCH survey, conducted by Harris Interactivesm, absenteeism rates rose slightly – increasing from 2.1 percent in 2000 to 2.2 percent in 2001 – while the average per-employee cost of absenteeism rose sharply from $610 per year in 2000 to $755 in 2001, coming within dollars of the highest cost reported in the last three years. On a company-wide basis, this per-employee cost for unscheduled absences translates into several million dollars for large organizations. Overall, the direct costs associated with unscheduled absences increased 24 percent.

Of chronic concern to employers is how to address the non-health-related reasons that keep workers off the job. In fact, while Personal Illness remains the single most common reason for last-minute worker no-shows (32 percent), reasons other than illness accounted for over two-thirds (68 percent) of unscheduled absences. These included Family Issues (21 percent), Stress (19 percent), Personal Needs (11 percent) and Entitlement Mentality (9 percent). Another 8 percent of employees had unplanned absences from work for Other reasons, such as bad weather or transportation problems.

"With the rate of absenteeism creeping upward and costs on the rise, it’s clear that employers must find a way of improving attendance," said Nancy Kaylor, a workplace analyst for CCH’s Human Resources Group.

"With the downturn in the economy, companies can ill-afford these additional costs. Many have already been forced to trim staff, meaning that now more than ever employers are depending on workers to be at work," she added.

But workers are already feeling stressed as they attempt to juggle long hours and personal demands, and it’s keeping some of them away from the workplace.

Employers reported that almost one out of five unscheduled absences were the result of worker stress last year.

"Many people already feel tapped out on hours they put in at work, but in fact it may get even worse," said Kaylor. "As companies reduce their workforce, the responsibilities of remaining employees will likely increase. The challenge for employers is to implement work-life and absence control programs that acknowledge both employee and company needs and provide a win-win solution for both."

The CCH Unscheduled Absence Survey, conducted annually by CCH for the past 11 years, is the definitive survey on absenteeism in the workplace and the only one that measures costs associated with unscheduled absences.

The 2001 CCH Unscheduled Absence Survey was conducted for CCH by Harris Interactivesm, the worldwide market research and consulting leader. The survey, conducted May 31 through June 21, 2001, reflects experiences of HR 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.) The survey results appear in the October 24, 2001, issue of CCH Human Resources Management Ideas & Trends, a newsletter for HR professionals.

Costs to Employers Climb

The 2001 CCH Unscheduled Absence Survey found that direct dollars lost to unscheduled absenteeism on a per-employee basis increased notably from $610 in 2000 per employee per year to $755 in 2001. During the past three years, this is the second-highest reported cost, trailing only 1998 when employers reported a cost of $757 per employee per year.

Supporting this finding, employers reported that as a percentage of their company budgets, an average of 4.2 percent is set aside to pay for absenteeism, up from 2000 when the amount of budget dollars earmarked for absences was just 2.6 percent. The survey also found that the average amount companies spend for unscheduled absences on an annual basis accounts for approximately 1.7 percent of their payroll expenditures.

While respondents were asked only for information about the direct payroll costs for their organizations’ absent employees, other costs associated with unscheduled absenteeism also can greatly affect an organization’s bottom line. These costs include overtime pay for other employees, hiring temporary employees to cover for absent workers, lost productivity and low morale.

Organizations Search for Solutions

While more employers seem to be taking action to control the rate and cost of unscheduled absences – evidenced by the growing use of work-life and absence control programs reported in this year’s survey – the study indicates that success may depend on the ability of employers to match programs to the real reasons keeping employees away from the workplace.

Work-life Programs

On a scale of one to five (with five being most effective), the three work-life programs ranked highest by human resource professionals for reducing unscheduled absences were Alternative Work Arrangements (also known as Flexible Scheduling) (3.6), Telecommuting (3.6) and Compressed Work Week (3.5).

In terms of those programs employers actually used, the three most common programs, according to the survey were Alternative Work Arrangements (63 percent), Leave for School Functions (58 percent) and Employee Assistance Programs (57 percent).

Absence Control Programs

When it comes to reducing absences through specific absence control programs, the survey found that Paid Leave Banks (also known as Paid Time Off Programs) continue to be seen as the most effective, with an overall rating of 3.6. 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. Employers found Disciplinary Action to be the next most effective program (3.4), followed by Bonus (3.3) and Buy Back (3.3) programs.

Most employers reported using multiple programs to help control absenteeism, with the most common being Disciplinary Action, in use at 93 percent of organizations. Yearly Review and Verification of Illness are the next two most common programs, in use at 81 percent and 71 percent of organizations, respectively, while just 58 percent of employers indicated using Paid Leave Banks.

Where Does Sick Time Go?

Overall, the survey found that full-time employees currently are granted 8.4 sick days per year and, on average, use 6.8 days. An average of 44 percent of employees take zero to two paid unscheduled absences a year, 41 percent use three to eight days and 16 percent take nine or more days.

As to where the unused time goes, 49 percent of employers that grant sick days allow employees to carry over unused sick days from one year to another, while 20 percent of employers allow employees to donate unused earned days to a leave bank for colleagues suffering from catastrophic illnesses.

What’s In Store?

Looking ahead, most organizations see no improvement in unscheduled absenteeism. In fact, 43 percent of those surveyed consider unscheduled absenteeism a serious problem for their organization. Few are optimistic that absenteeism will decline, with only 18 percent anticipating a decrease in unscheduled absences over the next two years.

About the Survey

The 2001 CCH Unscheduled Absence Survey, now in its 11th year, surveyed 234 human resource executives in U.S. companies and organizations of all sizes and across major industry segments in 42 states and the District of Columbia. The survey reflects experiences of randomly polled organizations with an estimated total of 1,371,261 employees. The CCH Human Resources Management Ideas & Trends newsletter sponsored the survey, which was conducted by Harris Interactive.

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.

To Obtain a Copy of the Survey

To order the CCH Human Resources Management Ideas & Trends newsletter containing the 2001 CCH Unscheduled Absence Survey, call 800-449-9525 and ask for offer number 06280001. Price is $29.95, plus tax, shipping and handling.

About Harris InteractiveSM

Harris Interactive (Nasdaq: HPOL) is a worldwide market research and consulting firm, best known for The Harris Poll and its pioneering use of the Internet to conduct scientifically accurate market research via its multimillion member online panel. The company has more than 45 years of experience in supplying clients with actionable knowledge across multiple markets. Through its U.S. and Global Network offices, the company conducts international research in multiple, localized languages. For more information about Harris Interactive, visit www.harrisinteractive.com. EOE M/F/D/V

About CCH INCORPORATED

CCH INCORPORATED, Riverwoods, Ill., is a leading provider of employment law and human resources information and e-learning for HR professionals. The CCH Human Resources Group is among the nation’s most authoritative sources of employment law, including information on HR management, benefits, compensation and worker safety. Its services include Human Resources Management, Pension Plan Guide, Employee Benefits Management and Shared Learning™ interactive training. CCH is a wholly owned subsidiary of Wolters Kluwer North America. The CCH web site can be accessed at www.cch.com. The CCH Human Resources Group site can be accessed at http://hr.cch.com.

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EDITOR'S NOTE: For more information, contact: Leslie Bonacum at 847-267-7153 or Neil Allen at 847-267-2179. Available to members of the press: Charts and graphs depicting the full range of survey data. This release and related information are posted in the CCH Press Center: www.cch.com.

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