I’m back with our regular feature about the Return on Employee Investment (ROEI). Throughout the series I’ll speak directly to what ROEI is, how organizations can maximize it and how they can calculate it.
Sick leave is a necessary benefit for all employees. If employers didn’t offer sick leave, they would accelerate health problems and the spread of illness, thereby lowering productivity and morale. However, missed work time and increased insurance costs also hurt companies.
According to CCH Incorporated, a company that produces electronic and print products for the tax, legal, securities, insurance, human resources, health care, and small business markets, unscheduled absenteeism can cost up to an average of $602 per employee, per year.
This cost does not include indirect costs such as overtime pay the employees who fill in, pay for temporary workers, missed deadlines, lost sales, sinking morale and lower productivity.
How to Reduce Sick Leave:
Whether above average use of sick leave is health-related or due to a pattern of abuse, a company can actively reduce absenteeism through intelligent investments. Employee wellness programs can promote better health and management of chronic conditions. And an HRMS can help fight abseenteeism by making information about absences available to managers, so it’s easier to identify possible patterns of abuse and address them with employees.
Absenteeism is also an area where improvements in employee engagement can reduce company expenses. A study from Health and Safety Executive showed that 30% of sick leave is partly the result of stress-related anxiety and depression. Motivated and engaged employees are eight times less likely to suffer from stress and depression.