CCH INCORPORATED

(RIVERWOODS, ILL., September 23, 1998) -- Unscheduled absenteeism by American workers reached the highest level in seven years and, as a result, the nation’s businesses lost millions of dollars last year, according to the 1998 CCH Unscheduled Absence Survey by CCH INCORPORATED, a leading provider of human resources and employment law information. In addition, employers expect absenteeism and its bottom-line impact to increase over the next two years as more workers take "sick days" to handle work-life issues and high stress levels.

The 1998 CCH Unscheduled Absence Survey, conducted annually by CCH, is the most definitive survey on absenteeism in the workplace and the only one that measures costs associated with unscheduled absences. The survey was released today in the newsletter, CCH Human Resources Management Ideas and Trends.

"This survey provides American business with a clear look at the financial impact resulting from unscheduled absences," said Paul Gibson, an attorney and human resources analyst for CCH's Health and Human Resources Group. "The significant increase -- after a two-year decline -- in unscheduled absenteeism is bearing down on both organizations and their employees. And, for companies, the struggle to manage work-life issues in a cost-effective way is expected to continue."

The 1998 CCH Unscheduled Absence Survey reflects experiences of human resources executives in U.S. companies and organizations of all sizes and across various businesses and not-for-profit "industry" sectors. (For more information, see "About the Survey" at the end of this release.)

The 1998 survey found the overall rate of unscheduled absenteeism had increased by 25 percent and the dollars lost to absenteeism jumped 32 percent since last year. Both the absenteeism rate and costs incurred were at the highest level since 1992, the second year of the CCH survey.

According to the CCH survey, those organizations with more than 100 employees, but fewer than 1,000 workers, reported the highest overall increases in unscheduled absenteeism. Organizations employing 5,000 or more indicated slight declines in absenteeism. Seven of the eight industry sectors surveyed reported an increase in unplanned absences, with Finance/Banking coming in with the highest increase. Health Care was the only industry to report a decline.

As for why employees aren’t showing up for work, Family Issues now is the most-cited reason for last-minute absences. Personal Illness as a reason continued to decline, while taking sick days due to an Entitlement Mentality and Stress reached all-time highs.

However, while employers acknowledge that work-life programs and paid-time-off (PTO) programs -- rather than a specific allotted number of "sick days" -- both had a positive effect on reducing last-minute no-shows by employees, these programs are not widely instituted, or are just now being embraced, by companies, according to CCH.

The overall "mean average" unscheduled absenteeism rate in 1998 was 2.90 percent, compared to a rate of 2.32 percent in 1997, indicating a 25-percent increase in unplanned absences. The 1998 rate is the second highest on record since CCH began the survey in 1991, when the rate was 3.08 percent.

Absenteeism rate by organization size varied. Increases were highest among small and mid-size companies, while large companies were the only categories to report declines in their unscheduled absenteeism rates.

Company Size	Percent Change
up to 100 employees	14%
100-249 employees	28%
250-499 employees	29%
500-999 employees	32%
1,000-2,499 employees	0%
2,500-4,999 employees	9%
5,000-9,999 employees	-4%
10,000 or more employees	-7%

The high averaged cost of unscheduled absenteeism increased by 32 percent, from $572 per employee annually in 1997, to as high as $757 in 1998. This 1998 figure of $757 is the highest averaged cost since 1991 when unexpected absences cost American employers as much as $859 per employee, according to the 1998 CCH Unscheduled Absence Survey.

Company Size	Percent Change
up to 100 employees	3%
100-249 employees	21%
250-499 employees	42%
500-999 employees	52%
1,000-2,499 employees	52%
2,500-4,999 employees	27%
5,000-9,999 employees	56%

Of particular note was small businesses employing fewer than 100 employees. While they reported the smallest increase of just 3 percent, the only group that reported a single-digit increase, the category still had the highest absenteeism cost per employee at up to $1,044, according to CCH.

When overall costs were analyzed, the survey found the total annual sticker price for unscheduled absenteeism packed a wallop, costing a large company nearly $4 million dollars.

Cost by Company Size	1998 Total Annual Cost
up to 99 employees	$26,100
100 - 249 employees	$56,841
250 - 499 employees	$209,563
500 - 999 employees	$457,274
1,000 - 2,499 employees	$1,295,693
2,500 - 4,999 employees	$2,676,891
5,000 - 9,999 employees	$3,979,464

"More and more companies are looking to improve earnings by controlling costs. Yet, unscheduled absenteeism continues to increase," said Gibson. "With the appropriate programs in place, businesses could significantly reduce the rate and cost of absenteeism, get more return on dollars currently spent on absenteeism and improve the quality of their work environment."

The 1998 CCH Unscheduled Absence Survey polled employers on the "direct" costs, as measured by salary or wages paid to employees, for unscheduled absenteeism. However, there are "indirect" costs associated with unscheduled absences. These include overtime pay for other employees, hiring a temporary employee to cover for the absent worker and supervisory time spent rearranging work schedules. In addition, there are indirect costs associated with a decline in morale and lower productivity among workers who are expected to cover for an absent employee.

"These hidden costs can add another 15 to 25 percent to the direct cost of unscheduled absenteeism," Gibson estimated.

Employers responding to the survey indicated that Decreased Productivity, Reduced Customer Service levels and Poor Morale among employees were their biggest indirect concerns associated with unplanned absences.

The 1998 CCH Unscheduled Absence Survey also reviewed the reasons employees called in sick at the last minute -- and it’s not because they were ill in most cases. Instead, Family Issues, which is cited as the reason for 26 percent of all unscheduled absences, topped the list of reasons employees take sick days.

1998 marked the first time that Personal Illness was not the most cited reason for unscheduled absences. This year, Personal Illness accounted for only 22 percent of such absences, showing a significant decline from 1995, the first year CCH began tracking the reasons for unscheduled absenteeism. In 1995, Personal Illness was cited as the reason for unscheduled absences in 45 percent of the cases.

Personal Needs, rounding out the top-three reasons, accounted for 20 percent.

While Personal Illness reached a four-year low, Stress and Entitlement Mentality (employees who are not ill, but take sick days simply because their employers provide them) reached four-year highs, each now accounting for 16 percent of unscheduled absenteeism. Of particular concern, according to Gibson, is the Stress category, which has nearly tripled since 1995 when it accounted for just 6 percent of unscheduled absences.

"Traditional sick-leave plans do not address the real issues that are driving employee absenteeism," said Gibson. "Companies need to examine more closely why their employees take unscheduled absences and then develop time-off programs that truly fit with today’s work-life environment. There’s little value in outdated plans that cost organizations more, are not flexible enough for today's workplace and fail to meet even the basic needs of workers."

To better understand how companies can reduce their unscheduled absences, the1998 CCH Unscheduled Absence Survey also asked employers about their experiences with work-life programs. Survey results indicate these programs can help reduce unplanned absences among workers. However, the organizations don't necessarily offer these programs to their workers.

On a scale of one to five (with five being most effective), the work-life programs ranked highest for reducing unscheduled absences were Flexible Scheduling (3.78), On-Site Child Care (3.62) and Emergency Child Care (3.55).

As for what they practice, more than one-half (51 percent) indicated their companies offer Flex Scheduling. This was up significantly from the 1997 CCH survey, when less than one-quarter offered Flex Scheduling.

However, among the two other leading work-life programs seen to reduce unplanned time off, Emergency Child Care is only offered by 13 percent of responding organizations and On-Site Child Care is available at only 6 percent.

"No single work-life program is going to be the right one for all companies and all employees," said Gibson. "The challenge for organizations is to come up with the right mix of programs for a particular work force and to be able to justify the cost of the program. This requires that companies make the effort to understand why employees are absent, and make a formal commitment to designing and adopting new programs."

Unexpected absences increased in almost every major industry category, according to the 1998 CCH Unscheduled Absence Survey. Of the eight categories surveyed, only the Health Care sector, with a mean rate of 1.79 percent in 1998, experienced a decrease in unscheduled absenteeism from 1997.

Industries reporting the highest increases included Finance/Banking, where the absenteeism rate jumped 42 percent; Retail/Wholesale, which saw a 32 percent increase; and Service, where the rate increased 31 percent.

In addition, the absenteeism rate increased 14 percent in the Government sector; 10 percent in Universities; and increased by just 1 percent among Utilities. However, these three sectors had much higher individual mean rates than the overall 2.90 percent average mean rate for the year. Specifically, Utilities had a mean rate of 3.45 percent, Universities had a mean rate of 3.39 percent and the Government rate was 3.05 percent.

"Industries that have higher than average rates of absenteeism should be concerned if they are now experiencing further increases in absenteeism," said Gibson. "These often are the industries that grant the most sick days, and it’s possible they’ve created an ‘entitlement mentality’. The result is costing them a significant amount of money."

As in the 1997 CCH survey, when the absenteeism rate was at an all-time low, Fear of Punishment, Strong Work Ethic and Loyalty to Supervisor were the top three reasons cited for the decline. Among those employers who said they experienced a decline in unscheduled absenteeism in 1998, these remain the top reasons.

However, while Fear of Punishment (19 percent), Strong Work Ethic (17 percent) and Loyalty to Supervisor (16 percent) remain the top three contributors to declines in unscheduled absenteeism, their perceived total effectiveness decreased by 15 percentage points.

Counterbalancing this trend, Effective Absence-Control Programs and Effective Work-Life Programs increased as reasons for lower absenteeism rates. Combined, they now account for 24 percent of why unscheduled absences have decreased in those organizations reporting decreases.

"Punishment may be effective among employees who truly abuse sick leave policies. For the majority of employees, however, building a culture that allows them to balance work-life issues is likely to have a greater impact," said Gibson.

Paid Time Off (PTO) was seen as the most effective absence-control program, according to 1998 CCH Unscheduled Absence Survey. However, only 25 percent of organizations reported they had implemented such a program and most of these reported having done so within the last two years. PTO programs provide employees with a "bank" of hours to be used for various purposes instead of traditional separate accounts for sick, vacation and personal time.

By company size, PTO programs were most popular, preferred by companies with up to 499 employees as well as companies with 5,000 to 9,999 employees. Those companies with 1,000-2,499 employees saw No-Fault programs as more effective and those organizations with 2,500-4,999 employees and those with more than 10,000 employees saw a Bonus program as more effective.

Industry Sector	Preferred Program
Finance/Banking	Paid Time Off
Government	Buy Back
Health Care	Paid Time Off
Manufacturing	Disciplinary Action
Retail/Wholesale	Paid Time Off
Service	Paid Time Off
University	Paid Time Off
Utility	No-Fault

The rise in unscheduled absenteeism for 1998 is accompanied by fear that employers have not seen the worst of the last-minute no-show problem. Of those human resources professionals surveyed, 53 percent said they expect unscheduled absenteeism will increase over the next two years.

Looking at the respondents across industry categories, all anticipated increases in unscheduled absenteeism. Concern was particularly high in Utilities where 75 percent of those surveyed expected more workers to call in sick, and in the Finance/Banking, Health Care and Universities sectors, where 64 percent of respondents in each category anticipated increased absenteeism.

Also, 54 percent of the Retail/Wholesale and 51 percent of the Service sectors also anticipated increased absenteeism. In addition, 47 percent and 48 percent of respondents, respectively, in the Manufacturing and Government, anticipate increased absenteeism.

Pessimism also was high in companies of all sizes. Those registering the highest level of concern about rising unscheduled absenteeism were respondents from organizations employing more than 10,000 employees and those with 1,000 to 2,499 workers.

"Perhaps the high level of concern expressed by survey participants will help motivate them to tackle the problem full-force," said Gibson.

As part of the CCH 1998 Unscheduled Absence Survey, some companies offered an up-close look at their successful programs for reducing unplanned absences. Case histories are available. These include cases on Baxter International, First Chicago NBD, Johnson & Johnson, JTECH Communications and Prudential. For more information about these case histories, contact CCH (see Editor's Note).

Copies of CCH Human Resources Management Ideas and Trends newsletter containing the complete 1998 CCH Unscheduled Absence Survey are available by calling 800-435-8878, and asking for offer number 06288001. Price is $25, plus tax, shipping and handling.

CCH INCORPORATED, Riverwoods, Ill., is a leading provider of tax and business law information for human resources, accounting, legal, securities, health care, banking and small business professionals. The company’s Health and Human Resources Group is among the nation’s most noted authoritative sources of employment law, including information on benefits, compensation, worker safety and human resources management. Its publications and software for human resource professionals include Human Resources Management, Pension Plan Guide, Benefits Guide and Payroll Management Guide. CCH is a wholly owned subsidiary of Wolters Kluwer U.S.

EDITOR'S NOTE: For more information about the survey, contact: Leslie Bonacum at

847-267-7153 or Mary Dale Walters at 847-267-2038. Available to members of the press:

The 1998 CCH Unscheduled Absence Survey, now in its eighth year, surveyed 401 human resources executives in U.S. companies and organizations of all sizes and across major industry segments. The 1998 survey reflects experiences of randomly selected organizations with an estimated total of 800,000 employees.

The organizations surveyed included employers in 49 states and Puerto Rico. Eight business segments are represented including: Manufacturing, Finance/Banking, Health Care, Retail/Wholesale, Service, Utilities, Universities and Government.

Mean-absence rates were calculated by dividing total-paid sick hours by total-paid productive hours. Scheduled absences, such as vacation, legal holidays, jury duty, personal time and bereavement leave were not included.

CCH Human Resources Management Ideas and Trends newsletter sponsored the survey which was conducted by Michael Markowich, Ph.D., a member of the CCH Human Resources Management Advisory Board.

Employee Absenteeism Jumps 25 Percent, Hits 7-year High As Work, Real Life Collide