Absent employees cost economy $16.6B in 2012

Did an employee call in sick today? It’s going to cost your business owner clients.

In fact, absenteeism cost the Canadian economy $16.6 billion in 2012, finds a study by Conference Board of Canada and sponsored by Morneau Shepell. This figure does not include indirect costs such as replacement costs for absent workers, administrative expenses or the negative effects on other workers or customers, suggesting the actual price tag is much higher.

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“The costs of absenteeism and short- and long-term disability should not be viewed as the cost of doing business — it’s something organizations can manage,” says Paula Allen, Morneau Shepell’s vice president of Research and Integrative Solutions.

Organizations estimate the direct cost of absenteeism averaged 2.4% of gross annual payroll in 2012. According to the study, 46% of organizations report tracking absenteeism by dates. But only 15% measured the direct cost.

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“Absenteeism problems have a direct impact on the ability of organizations to deal with major business issues,” says Allen. “Think of today’s challenges of recruitment and retention, including the shortage of skilled workers, along with the aging of our workforce and the likelihood of increasing disability costs, the increase in global competitiveness and the exponential increase in client service demands.”

She adds, “Addressing the costs of absenteeism should be one of the first steps that organizations take because absenteeism costs can be reduced and the talent can be retained.”

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