Absenteeism Costs Companies More Than Ever
As Employers Fail To Crack Persistent Problem Of No-Shows Reasons Other Than Physical Illness Keep
Employees Home Most Often: More Workers Now Take Time for Personal Needs
(RIVERWOODS, ILL., October 16, 2002) – Unscheduled absenteeism
remains a dilemma for employers who are now paying more than ever for
the costly problem of employee no-shows, according to the findings of
the 2002 CCH Unscheduled Absence Survey conducted by CCH
INCORPORATED (CCH), a leading provider of human resources and
employment law information (hr.cch.com).
And, more often than not, employees are using that "sick"
time to tend to things other than a nagging headcold, the 12th
annual CCH survey found.
According to the latest CCH survey, conducted by Harris Interactive®,
the average per-employee cost of absenteeism climbed to an all-time
high of $789 per year in 2002, up from $755 in 2001, while the
absenteeism rate declined slightly to 2.1 percent from 2.2 percent in
The trend of most employees calling in "sick" for reasons
other than physical illness continues.
The survey found that while Personal Illness was the single
most common reason for last-minute no-shows (33 percent), reasons
other than illness account for two-thirds (67 percent) of unscheduled
absences, with nearly twice as many employees taking time off for Personal
Needs (21 percent) in 2002 than last year.
Of significant concern to employers is how to address the
non-health-related reasons that can keep workers off the job and cost
large companies millions of dollars each year.
"No-shows take their toll both in direct wage dollars and lost
productivity," according to CCH workplace analyst Lori Rosen, JD.
"Employers ignoring these costs are missing the chance to control
expenses, something most employers need to do given the current
With 83 percent of companies surveyed believing that unscheduled
absenteeism is likely to stay the same or get worse in the next two
years, Rosen recommended that employers take preventative action to
curb the problem through the effective use of absence control and
work-life programs that maximize productivity and control costs.
"The cost of complacency is substantial," warned Rosen.
"Employers have been clinging to traditional sick leave policies
and disciplinary action for years. But the status quo is costing them
more each year. They need to create policies and programs that
accommodate the changing requirements of today’s workforce."
The CCH Unscheduled Absence Survey, conducted annually by
CCH for the past 12 years, is the definitive survey on absenteeism in
the workplace and the only one that measures costs associated with
Conducted for CCH by Harris Interactive, the worldwide market
research and consulting leader, the survey 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.) Results of
the survey, which was conducted June 25, 2002 through July 16, 2002,
appear in the October 16, 2002, issue of CCH Human Resources
Management Ideas & Trends, a newsletter for HR professionals.
Cost to Employers Hits All-Time High
The 2002 CCH Unscheduled Absence Survey found that direct
dollars lost to unscheduled absenteeism on a per-employee basis have
reached a record high of an average of $789 per employee on an annual
basis, costing small companies as much as $60,000 a year, while the
largest employers ante up more than $3.6 million.
This $789 per-employee cost represents an increase of nearly 5
percent over 2001 costs, and 29 percent since 2000. Specifically,
costs rose from $610 in 2000 to $755 in 2001 before reaching this year’s
Employers also are setting more aside to pay for that unproductive
time. Respondents reported that an average of 5.1 percent of their
company’s budget is set aside to pay for unscheduled absenteeism, up
from 4.2 percent in the 2001 survey.
Additionally, the survey found that the average amount
organizations spend for unscheduled absences on an annual basis
accounts for approximately 2.3 percent of their payroll expenditure,
up from 1.7 percent in 2001.
Based on survey data, employers may be getting comfortable with a
certain level of last-minute absences, as evidenced by relatively
stable unscheduled absenteeism rates over the past three years of 2.1
percent in 2002, 2.2 percent in 2001 and 2.1 percent in 2000.
"If employers are only watching the rate, they are missing the
fact that this problem is costing their company more than ever
before," noted Rosen. "While recent absenteeism rates are
fairly level, the cost of no-shows has climbed steadily in the past
few years. With an aging, more experienced workforce, that trend is
likely to continue."
Rosen points out that respondents were asked only for information
about the direct payroll costs for absent employees. The associated
costs of overtime pay for other employees, hiring temporary employees
to cover for absent workers, lost productivity and low morale drain
even more dollars from an organization.
Reasons for No-Shows Reflect the Changing World
According to the findings of the most recent CCH survey, the reason
most employees call in sick at the last minute has more to do with a
personal issue than physical illness. While Personal Illness was
the leading single reason for unscheduled absences (33 percent), two
out of three absences were for other reasons.
An increasing number of employees missed work at the last minute
because of Family Issues (24 percent) and Personal Needs
(21 percent) – with Personal Needs keeping people at home
nearly twice as often in 2002 as in 2001, when it was 11 percent. Stress
accounted for 12 percent of employee absences, and Entitlement
Mentality 10 percent in 2002.
Employers Search for Solutions
While employers can’t plan for every event that may affect their
employees, they can implement programs that are flexible enough to
address the real reasons why people don’t show up for work. And,
increasingly, employers appear to be willing to help employees by
introducing more flexibility into the workplace with a broader array
of work-life programs.
According to the findings of the CCH survey, organizations now use
an average of 7.3 work-life programs, up from 6.7 in 2001 and 3.4 in
In terms of the most used work-life programs, those used by the
majority of respondents were Employee Assistance Plans (68
percent), Wellness Programs (54 percent), Alternative Work
Arrangements (53 percent) and Leave for School Functions
(52 percent). Rounding out the top five was Compressed Work Week,
used by 49 percent of respondents.
Employee Assistance Plans in recent years have expanded in
scope beyond personal crisis assistance to help employees with such
issues as child and elder care.
Increasingly popular Wellness Programs help keep workers
healthy and on the job with such things as health screenings, flu
shots, health education, ergonomics training and more – all
especially important as the workforce ages.
On a scale of one to five (with five being most effective), the
work-life programs ranked highest by human resource professionals for
reducing unscheduled absences were Alternative Work Arrangements,
also known as flexible scheduling, (3.6) and Compressed Work Week
(3.5). Leave for School Functions and On-Site Child Care were
both rated 3.3 for effectiveness, while Employee Assistance Plans and
Telecommuting tied with effectiveness ratings of 3.2.
Absence Control Programs
The survey found that organizations continue to rank Paid Leave
Banks (also known as paid time off) as the most effective absence
control program, 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
Employers gave Disciplinary Action and Buy Back
programs effectiveness ratings of 3.4 each and Bonus program
received 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.
Most employers reported using multiple programs (on average 5.2) to
help control absenteeism, with the most common being Disciplinary
Action, in use at 93 percent of organizations.
Yearly Review and Verification of Illness were the
next two most common programs, in use at 81 percent and 71 percent of
organizations, respectively. Paid Leave Banks were in place at
59 percent of the organizations participating in the survey, as were Personal
"If an employee’s only option for being absent is taking a
sick or vacation day, the employee cannot schedule an absence for a
medical appointment or to close on a new home purchase," noted
Rosen. "When time off is flexible enough to allow employees to
miss work for personal business, then those days or hours off can be
scheduled and the employer can be prepared to cover the employee’s
duties while he or she is away."
Counting the Days…
Overall, the survey found that full-time employees currently are
granted 7.6 sick days per year and, on average, use 6.2 days. An
average of 42 percent of employees take zero to two paid unscheduled
absence days a year, 43 percent use three to eight days and 15 percent
take nine or more days.
For most companies, the effects of September 11 did not seem to
contribute to a change in unscheduled absenteeism rates, with only 14
percent of respondents indicating that their organization experienced
an increase in worker no-shows since then.
As to where the unused time goes, 43 percent of employers that
grant sick days allow employees to carry over unused sick days from
one year to another, while 25 percent of employers allow employees to
donate unused earned days to a leave bank for colleagues suffering
from catastrophic illnesses.
About the Survey
The 2002 CCH Unscheduled Absence Survey, now in its 12th
year, surveyed 333 human resource executives in U.S. companies and
organizations of all sizes and across major industry segments in 43
states and the District of Columbia. The survey reflects experiences
of randomly polled organizations with an estimated total of nearly two
million employees. The CCH Human Resources Management Ideas &
Trends newsletter sponsored the survey, which was conducted online
by Harris Interactive from June 25 to July 16, 2002. The data was
weighted to reflect industry distribution as represented in the
Society for Human Resource Management.
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 2002 CCH Unscheduled Absence Survey, call
800-449-9525 and ask for offer number 0628001. Price is $29.95, plus
tax, shipping and handling.
About Harris Interactive®
Harris Interactive (www.harrisinteractive.com)
is a worldwide market research and consulting firm best known
for The Harris Poll®, and
for pioneering the Internet method to conduct
scientifically accurate market research. Headquartered in Rochester,
New York, U.S.A., Harris Interactive combines proprietary
methodologies and technology with expertise in predictive, custom and
strategic research. The Company conducts international research
through wholly owned subsidiaries—London-based HI Europe
and Tokyo-based Harris Interactive Japan—as well as through
its network of local market and opinion research firms, and various
U.S. offices. 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. CCH is a
wholly owned subsidiary of Wolters Kluwer North America. The CCH web
site can be accessed at cch.com.
The CCH Human Resources Group site can be accessed at hr.cch.com.
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EDITOR'S NOTE: For more information, contact Sheri Cardo at
800-727-1133, ext. 1334 or Leslie Bonacum at 847-267-7153. 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/absenteeism.
Also available to members of the press upon request, the new CCH book HR
How-to: Work-Life Benefits.