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Absence Management for Small Business – Best Practices

One Minute Takeaway

  • Absences hurt productivity, but so can ‘presenteeism’
  • Unexplained absences are an early warning sign of decreased engagement
  • Businesses should create robust absence policies and utilize attendance software

If you’re running a business, you know the headaches employee absences can cause. It’s expensive, too: absences cost businesses around a quarter of a trillion dollars each year in lost productivity, according to the CDC. Then there’s the toll on company culture, with hard-working employees questioning why they bother to show up when others don’t.

Absences cause problems for businesses of all sizes, and there’s no single easy solution. What’s certain, though, is you can’t tackle the problem effectively without first understanding the reasons for it. 

What Causes Absenteeism?

Let’s start with the obvious. Planned absences, like a well-deserved week at the beach, aren’t a problem. Everybody needs a break sometimes. (If anything, you should encourage your team to use all their vacation days.) Other absences are unavoidable: time off sick, parental leave or military duty. What businesses need to worry about are regular or poorly explained absences. 

It’s easy to put these down to lazy or reckless employees. But remember, you hired them for a reason. Consider if there’s a deeper reasons for their disengagement with work. Potential causes include:

  • Seeking, or interviewing for, work elsewhere
  • Burnout and stress
  • Depression or other mental illnesses 
  • Bullying or harassment in the workplace

By identifying trends in absences, you can get to the root of problems with your company culture.

Absence Management Best Practices 

Let’s look at ways businesses can redefine their absence strategy for better results.

1. Understand Leave Laws

It’s an employer’s job to understand what leave employees are legally entitled to. As an HR pro, you’ll know about the major federal laws: the Americans with Disabilities Act (ADA), the Family and Medical Leave Act (FMLA) and the Uniformed Services Employment and Reemployment Rights Act (USERRA). To help businesses understand additional federal and state laws, Paycor has created guides to military leave, paid sick leave and parental leave. Watch out, employees also have the right to be absent for jury duty and to vote. Here’s what’s key: if an employee has a legal entitlement to leave, you can’t treat their time off like an ordinary absence.


2. Create an Absence Policy

Take into account the above legislation when creating your company absence policy. If you don’t have one already, make it a priority. You might want to consider a general PTO policy, making clear that “vacation” isn’t the only reason to take time off.

3. Use Time and Attendance Software

If you track employee absences with pen and paper or spreadsheets, it’ll be hard to spot trends. Use time and attendance software to collect data automatically and you’ll be alerted to worrying patterns, giving you time to take action early.

4. Incentivize Attendance

Responding to poor absence is a challenge. Disciplinary measures may sometimes be necessary, but this won’t help if absences are often down to personal problems or decreased engagement. Instead, reward and recognize those with the best attendance records. It doesn’t require big investment: a gift card at the end of the quarter is enough.

5. Fight a culture of Presenteeism

Here’s the other side of the story: many workers don’t take enough absences. They turn up no matter how tired and burned out they are, because they want to keep their job. These underperforming employees hurt productivity almost as much as absences studies have shown

Managers need to recognize the signs when employees need a break.

6. Create a Culture of Wellness

Seeking to understand the deeper causes behind absences goes hand in hand with caring about wellness at work. Creating a culture where it’s okay to not be okay, and where the importance of mental health is understood, is a great start. Paycor’s recent publication, How HR Can Promote Mental Health at Work, can help.

7. Understand Long-Term Sickness

‘Long Covid’ brought the reality of long-term ill health to mainstream attention, but millions of Americans already suffer from chronic diseases and fatigue. These are often managed without sick leave, but companies need to understand employees’ challenges. Work together to find accommodations that help your whole team achieve their whole potential.

8. Flexible Scheduling

If you have employees who regularly cancel shifts at the last minute, it might be down to their childcare responsibilities or poor public transport links. Empowering employees with more say in when they work has long been shown to reduce absences. Give yourself a head start by using software to automate schedule creation and facilitate easy shift swapping.

9. Go Remote First

Sometimes, better scheduling isn’t enough. Giving employees the power to choose where they work (at least some of the time) puts power back in their hands and boosts engagement, cutting absences as well as reducing real estate costs. The pandemic taught us that companies with remote work capabilities are more adaptable and resilient.

10. Put a Succession Plan in Place

Some absences are inevitable. That’s why nobody should be so essential that the workplace grinds to a halt when they aren’t there. Think about skills, rather than just roles. When an employee is away, who can best step up and take on their responsibilities?

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