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Small Businesses Hit Hard By Unscheduled Absenteeism

Rate, Financial Impact on Small Businesses Nearly Double Since 1994, Expected to Get Worse. Few Programs Are in Place to Combat Costly Problem for Entrepreneurs

(RIVERWOODS, ILL., September 23, 1998) -- Unscheduled absenteeism by American workers in small businesses is at an all-time high, and these absences are now costing business owners nearly twice as much as they did just four years ago, according to the 1998 CCH Unscheduled Absence Survey by CCH INCORPORATED (CCH), a leading provider of small business and human resources information. In addition, the survey indicated that while many programs are viewed as effective in stemming the tide, few of those programs are in place. More bad news is that small business expects the problems to get worse.

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 polled employers of all sizes within eight industry sectors.

CCH Business Owner’s Toolkit™, the company’s online service (www.toolkit.cch.com, AOL keyword: CCH, Compuserve Go: CCH) for small office/ home office entrepreneurs offered this look at the findings most relevant to the small business sector, those employing fewer than 100 workers.

ABSENTEEISM RATE SKYROCKETS

The mean rate of unscheduled absenteeism within small businesses increased by 14 percent, from 2.85 in 1997 to 3.25 in 1998. This mean rate of 3.25 is the highest rate reported across all company sizes this year, and the highest reported by small businesses since 1994, when CCH first began surveying the small business group. In fact, since that time, absenteeism rates among small businesses have skyrocketed 46 percent, from 2.22 to 3.25.

This year, the overall mean rate of absenteeism for all companies, big and small, responding to the survey was 2.90.

"During the first three years that we surveyed the small business sector, their absenteeism rates remained below the overall mean rate for all businesses," said Susan Jacksack, small business analyst for CCH Business Owner’s Toolkit. "However, for the past two years, their rates have increased dramatically, indicating unscheduled absenteeism is becoming an increasingly serious problem for small business," she said.

HIGH COSTS HIT HARD

Not only is the rate of absenteeism for small businesses alarming, so too are the costs, as measured by salary or wages paid to absent workers. While the cost of absenteeism by all company sizes is as high as $757 per employee per year, small businesses (fewer than 100 employees) could be losing a whopping $1,044 per employee per year -- 38 percent higher than the average. That puts the possible total price tag of these unscheduled absences for a small business as high as $103,000 per year.

"Small business owners need to seriously look at the reasons why unscheduled absenteeism has reached such alarming rates and then determine if there are programs that they can put in place that would cost-effectively help them reverse this trend," said Jacksack.

WHY EMPLOYEES AREN’T AT WORK

As part of the 1998 CCH Unscheduled Absence Survey, reasons why employees call in sick at the last minute also were explored. Among small businesses, Family Issues edged out Personal Illness as the leading reason why employees call in sick. Specifically, Family Issues is cited as the reason for 21 percent of all unscheduled absences. Personal Illness is cited 20 percent of the time, as are Stress and Personal Needs. Of particular concern is the Stress category.

Businesses of all sizes overall indicated Stress was the reason employees called in sick at the last minute in 16 percent of instances. Even among businesses overall, this number is alarming as it has nearly tripled since 1994, when Stress accounted for 6 percent of absences. However, among small businesses, the number of people calling in sick due to Stress is considerably higher at 20 percent.

Entitlement Mentality, indicated as the reason for unscheduled absences in 19 percent of such instances, rounded out the reasons why employees aren’t showing up for work.

EFFECTIVE WORK-LIFE PROGRAMS AREN’T IN USE

Given that work-life issues are the reason why many employees are calling in sick at the last minute, employers were asked which programs they perceived as most effective in combating unscheduled absenteeism and which programs they had in place.

The top five ranking work-life programs that small businesses perceived as effective in controlling unscheduled absences were: Job Sharing, Flex Scheduling, Leave for School Functions, Emergency Child Care and a Compressed Work Week.

While their perceived order of importance varied, four out of five of these were the same programs that businesses overall ranked as most effective.

Most Effective Work-Life Programs for Absence Control

Three of those five programs viewed as most effective in absence control were also top programs in use in small businesses. However, the use of these programs was significantly limited, particularly when compared to their use by businesses overall.

Use of Work-Life Programs

"Programs like flex scheduling, compressed work weeks and leave for school functions cost very little to establish. But their bottom-line savings in reducing absenteeism can be very effective," Jacksack said. "As small businesses not only have a serious unscheduled absence problem, but also must compete with larger businesses in attracting employees, they should examine how these programs could help them address both issues. At the same time, they can alleviate some of the stress that appears common among small business employees."

Jacksack further advised small business owners to speak with their Chamber of Commerce, small business organizations and entrepreneur peers to see what resources may be available to help them address some of the more costly and difficult-to-administer programs, such as emergency child care.

PAID TIME OFF RATED HIGHEST ABSENCE-CONTROL PROGRAM

Among programs designed to allocate time off and its use, Paid Time Off (PTO), which provides employees with a "bank" of hours to used for various purposes -- instead of traditional separate accounts for sick, vacation and personal time -- was ranked as the most effective absence control program by the most respondents. Small business respondents followed suit, ranking PTO the highest. Yet, only 25 percent of businesses overall have instituted PTO programs.

The programs small businesses saw as second and third most effective were Buy Back, where the employee is reimbursed, either in cash or vacation days, for unused sick days, and No-Fault, which eventually calls for disciplinary action if too many absences occur within a fixed time.

EXPECTED INCREASE IN ABSENTEEISM COULD BE BIG PROBLEM FOR SMALL BUSINESSES

More than one-half (53 percent) of small businesses believe absenteeism will increase over the next two years. This pessimistic view is shared by companies of most sizes.

"Perhaps the high level of concern expressed by small businesses, as all businesses, will help motivate them to find the resources to combat this problem before it gets worse," said Jacksack.

TO OBTAIN A COPY OF THE SURVEY

Copies of the 1998 CCH Unscheduled Absence Survey are available by contacting CCH at 800-435-8878, offer number 06288001. Price is $25, plus tax, shipping and handling.

ABOUT CCH’S SMALL BUSINESS UNIT

CCH’s Small Office/Home Office unit offers a comprehensive portfolio of practical information and software tools for the small business owner. This includes CCH Business Owner’s Toolkit on the Internet and a series of helpful how-to books, such as Start, Run & Grow a Successful Small Business; Hire, Manage & Retain Employees for Your Small Business and Business Plans that Work.

CCH INCORPORATED

CCH INCORPORATED, headquartered in Riverwoods, Ill., was founded in 1913 and has served four generations of business professionals and their clients. The company annually produces more than 700 electronic and print products for the tax, legal, securities, human resources, health care and small business markets. 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 the working press:

• Charts and graphs depicting the full range of survey data
• Historical survey data
• Case histories

This release and related information are posted in the CCH Press Center: http://www.cch.com.

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ABOUT THE SURVEY

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.

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.