18 June 2020

Absenteeism: how to avoid it and increase productivity

person sitting alone at a long table, in a room with a blue floor and large windows in the background

Each day, a significant number of employees report sick leave. When the work absenteeism It may take a few days before they recover and become active again, but it may also be a longer period before they return.

Temporary inactivity of absent employees leads to lost work days that can slow down company performance, has negative consequences for productivity and raises the cost of production. In addition, frequent and long-term absences diminish a worker's subsequent employment and earnings prospects.

Absenteeism is in nobody's interest and a solution must be found.

Table of contents

Employee absence: how companies act

Have programmes been introduced within your company to help reduce employee absenteeism? That may be the first step.

Many programmes are based on the principle that an employee's decision to report an absence can be influenced if it is costly for them to be absent. Thus, companies can Reduce absenteeism through the implementation of programmes broad, encompassing:

  • Performance-related pay: bonuses, incentives, and work recognition.
  • Improvements to general working conditions: for example, management programmes that help employees cope better with multitasking.
  • Formulas to boost motivation and strengthen employee loyalty to the company.

In addition, companies can implement grading systems to allow long-term absentees to return to work with partial responsibility. The utility of such programmes depends on the specific conditions of the local labour market and the type of company production.

Solutions for preventing or reducing the impact of absenteeism

Could you identify yourselves Three main categories of programmes to reduce workplace absenteeism. In general, the different programmes are complementary to each other, and their usefulness depends on the specific type of production process within the company. These are:

1.       Financial incentive programmes. There is solid evidence that employees respond to negative incentives. However, the extent to which firms can implement negative incentives may be limited (at least it is in Spain) due to the presence of a mandatory minimum sick pay imposed by governments. Furthermore, while there is some evidence that firms can use bonus schemes to reduce absence, the bonus depends on many indicators of worker output, and sickness absence is only one of them. Therefore, bonuses are an expensive way of reducing absence.

Conversely, a well-designed monitoring system by colleagues or supervisors can strengthen the application of financial incentives to reduce absenteeism. However, a disadvantage of these incentives may be that, if they are too strong, employees may be wrongly encouraged to come to work. Consequently, the company may run the risk of these workers spreading contagious diseases, leading to increased absence and a deterioration in the health of their colleagues.

2.       Programmes to improve the quality of working conditions. There is ample evidence that absence is higher in hazardous and noise-exposed work environments. However, improving these conditions requires extensive and costly programmes. The alternative is to allow multitasking employees to switch between activities. A focus on working conditions could also improve worker morale, cushioning the negative effects on absenteeism if engaging in paid work activities becomes more costly for the worker.

3.       Specific programmes to enable faster recovery for employees. One example is a grading programme, where employees who are absent long-term can partially resume their work tasks, while also being absent part-time. This is an effective approach and is usually well-received by both parties, the employee and the employer.

In general, there are sufficient opportunities for businesses to reduce absenteeism, though effectiveness depends largely on the specific type of production within the company and the institutional and economic context in which it operates. What usually doesn't fail in the medium and long term are the policies that take into account staff motivation. One of these is Flexible remuneration system, which increases the worker's purchasing power at the end of the month, while confirming that the company cares about their real needs.

Edenred Spain