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Absenteeism from workplace stress costs teams $300B — here’s how to fix it

Measuring the real costs of workplace stress lies in getting a handle on absenteeism.

Do you have any idea how many of your employees call in sick because of workplace stress? If your staff records are bursting with paid or unpaid absent notes, the working environment could be the cause. 

This is particularly true during stressful global events — if your team doesn’t have a psychologically safe working environment. If you combine regular workplace stress with an additional spike of external stress, your team members could be pushed into ‘flight or fight’ mode, which is unsustainable, hence the uptick in absenteeism.

Productivity to payroll ratios must be feeling the pinch as well. The effects of workplace stress don’t only kick-in overnight. There’s usually a gradual build-up of fear or anxiety that eventually manifests as stress. As inner tensions build up, an employee’s mental health (and subsequently their productivity) starts to decline.

Because the effects of prolonged stress develop slowly, colleagues and managers adapt to an employee’s deteriorating quality of work. All focus is on delivery of deadlines, so teams cope by absorbing or reassigning responsibilities. This results in colleagues carrying more than their fair share of work, or additional hires getting added to the payroll. Right from the onset, there’s a price to pay by everyone, as well as the company bottom line.  

World Health Organization research shows that about 264 million people globally suffer from depression and anxiety. Further studies estimate that mental health problems in the workplace costs the global economy $1 trillion annually in lost productivity.

The American Institute of Stress has calculated that companies in the USA lose $300 billion per year as a result of workplace stress.

(Keep in mind that these numbers reflect normal times, and are obviously compounded during global crises like recessions, wars or pandemics).

One thing I found as an HR practitioner is that very few people are willing to speak openly about anxiety, depression and stress because they’re mental health issues. Also, very few supervisors and managers know how to recognize mental health problems or how to handle them. And why should they? The skills and qualifications they were hired for lie elsewhere.

That’s one of the main reasons why employers bleed money from lost productivity. They don’t understand the problem, so they can’t recognize it and, therefore, can’t fix it. The same WHO research found that every $1 put into scaled-up treatment for common mental disorders shows a return of $4 in improved health and productivity.

With the many economic crises being faced across the world today, stress, anxiety and depression are already on the rise. Employers have to invest in the mental wellbeing of their employees if they want to improve productivity and profits and put a lid on absenteeism. 

What is absenteeism and why is it about more than just cost?

Briefly, absenteeism is any intentional and unplanned time taken off work by an employee. It excludes paid leave and approved absences. Unscheduled absenteeism can become habitual, and in some instances, develop a predictable pattern.

It’s reasonable to assume that staff will occasionally need unplanned time off because everyone has a personal life. But when work absence is excessive, it leads to more than just lost productivity and increased costs.

According to the US Department of Labor, an estimated 2.8% of full-time salary and wage earners were absent from work on any given day in 2019. That might not seem like much, but it amounts to around 117,400 people a day, of which 50,000 were in management and professional positions.

Unplanned absenteeism is mostly unpaid, and superficially that can appear to reduce losses, but bringing in replacements can be more expensive.

The impact of employees not pitching up without warning takes a massive toll on their colleagues and managers as well. Missed deadlines, poor service delivery and ongoing delays burden entire work teams. The pressure of angry customers and trying to cover too many bases leads to anxiety and tension. People who would cope under normal circumstances suddenly find themselves feeling out of their depth.

If absenteeism in a company or department is a chronic problem, it can eventually become “contagious”. As staff morale gets eroded by rising stress levels, more people will start taking unplanned absences, making the problem worse.

And it can very quickly get out of hand!

Because companies or departments that are short-staffed run on crisis management, all efforts go into keeping things afloat. There isn’t time to try and understand or analyze why absenteeism levels are high or prevail.

Checks and balances are, however, essential if you want to put policies and procedures in place to address the problem. You can’t solve a problem without understanding it first. And you have to understand it within the context of your business environment specifically.

Causes of stress in the workplace

The first step in coming to grips with absenteeism is to identify the causes of workplace stress within your company. All industries are different, and companies have their own culture. Unmanaged stressors can quickly become part of toxic work culture.

It’s challenging to uncover valid reasons.

Here are some of the main reasons behind absenteeism:

  • A toxic workplace: A toxic workplace is one of the leading causes of stress in the workplace. It can be limited to one department or be a thread that runs through the whole organization. People who aren’t coping and are stressed continuously can develop a dog-eat-dog mentality to survive. This opens the way for issues like bullying and harassment. If left unchecked, employees will begin to call in sick. It can be to avoid the situation, or it could be anxiety or depression triggered by stress.
  • Disengagement: Many things can lead to employee disengagement, including a toxic workplace, prolonged pressure, long working hours and work overload. The person begins to feel overwhelmed and sees no end to the stressors, so they lose interest. In Fingerprint for Success’ 20-year study on high-performing teams, they discovered that one of the biggest causes of disengagement is when someone is not working on projects that align with their work motivations.
  • Burnout: disengagement can be a precursor of burnout, particularly in employees who were previously high achievers and very committed to their job and colleagues. (In F4S this measures as having a high motivation for achievement and affiliation.) Burnout is a state of emotional, mental and physical exhaustion that occurs after exposure to long periods of stress. It manifests in stages and progresses until the person can no longer cope at all.
  • Low morale: employees who feel unappreciated can end up wanting to avoid going to work. Too many tight deadlines, heavy workloads, constant overtime and no acknowledgement, take their toll. Work starts to become a burden.
  • Occupational safety: working in an unsafe environment keeps employees in constant survival mode. There is a continuous low-level fear of personal injury or possible damage to equipment. Focusing on job responsibilities and trying to ensure that no harm’s done can become overwhelming, leading to stress and absenteeism.
  • Job-related injuries: accidents happen in all workplaces from time to time. Many employers, however, don’t consider subtle adverse effects. Things like worn-out equipment, poorly planned workstations, noise, bad lighting, poor temperature control and no ventilation. These can lead to back, neck and joint pain, headaches, sickness and eyesight problems that need medical treatment.
  • Calling in sick: is the most widely used excuse for absenteeism. Employers have no way of really knowing if it’s genuine unless the employee brings in a medical certificate. If there’s a chronic pattern of sick leave, the employee could have another reason for staying away from work.

Also, don’t overlook personal reasons for absenteeism. Disengagement can come from being burdened by personal worries and stressors. Burnout could be related to a stressful home environment, unhappy relationships, or having to take care of a sick or elderly relative. Employees are regular people so they could develop addictions, be subjected to abuse at home or earn too little to cover their living expenses.

All of these reasons are common and can contribute to absenteeism and depression. Very few employees will be willing to discuss personal issues, though, out of fear of judgement or dismissal.

There are also more straightforward reasons like job hunting and attending interviews. This can lead to a pattern of arriving late or leaving early. Regular partial absenteeism has a significant negative impact and contributes to added stress in the workplace too.

Drilling down to get a clear picture

The catalysts of stress are not necessarily only triggered within the workplace. So why should employers invest in mental health wellbeing strategies to reduce stress?

Simple! Personal stress spills over into the working environment and adds to existing stressors. Up to 80% of workers feel stress on the job. Almost half of them say they need help in learning how to manage stress, and 42% say colleagues need help as well.

Add the personal troubles to workplace stress and its little wonder that absenteeism is a growing problem.

So how do employers tackle the problem?

The first and most crucial step is to assign responsibility for managing absenteeism to the human resources department (or the appropriate person if you happen to be working on a small startup team). 

HR already keeps records, drafts policies and procedures, and might field calls from employees calling in sick. But they need to be involved in every step of employee absenteeism. Analyzing and understanding numbers and trends is critical to proactive intervention. Line managers must be part of the process, but can’t be expected to resolve underlying problems on their own.

Where do you begin?

Data, data, data! Before you can implement a strategy, you have to understand the unique situation within your business. Historical data must be collected and analyzed to get a clear picture of general absenteeism numbers. Potential hot-spots in the company where numbers are above average must be identified as soon as possible.

Issues to probe:

  • How do absenteeism levels in your company compare with industry statistics?
  • Are there areas that show higher than average levels of absenteeism?
  • Identify employees who have a distinct pattern of absenteeism.
  • What are the most common reasons given for unscheduled absenteeism?
  • What solutions can be implemented to address the problem?

Strategies for managing stress in the workplace

Once you have a clear picture, procedures must be rolled out in phases to ensure success. The modern workplace evolves rapidly, so strategies and solutions must be agile and never considered a one-off solution.

Once you’ve got all the data, you can start devising ways and means to address workplace stress that leads to absenteeism.

These 6 necessary steps will get your absenteeism under control. You might need to add a few more depending on circumstances.

1 - Address hot-spots immediately

Don’t leave problem areas until your strategy is ready for implementation. Whether it’s a department, division, out of state branch or an international office, get an HR team involved. The team’s task must be twofold - conduct an HR audit (including health and safety); interview management and employees (including casual and temporary workers). Use the reports and information gathered to come up with decisive remedial action.

2 - Implement a digital internal communication system

If you want to find out what workplace stressors are triggering absenteeism, the best people to speak to are your employees. But many people are unwilling to speak out because they don’t want negative repercussions. Digital internal communication, like Bitrix24, can be integrated with your existing HR systems. You can use multiple communication channels to encourage employees to voice concerns while guaranteeing them total confidentiality.

Once you’ve gained employee trust, many issues that would go unnoticed can be brought anonoumsly to C-suite attention. From hazardous working conditions to excessive overtime, bullying and flouting the rulebook. Who better to hear it from than those on the frontline?

3 - Metrics and analytics

Implement a system that gathers data on absenteeism in real-time. This way, you can identify issues and shifting trends before they become a problem. HR needs to have a hands-on approach and get involved as soon as signs of increased absenteeism become apparent. For example, if a top-performing manager is suffering from burnout, it will show up in their team. As the manager is less able to cope, team members will become more stressed.

4 - Review your existing absenteeism policies

Are your absenteeism policies draconian? Labor laws differ globally, and many countries put no obligation on employers to pay unscheduled absences. There is, however, no legislation that prevents you from being reasonable. A more accommodating policy can actually reduce absenteeism because it eliminates fear.

Organizations that have a very harsh policy towards unscheduled absence can find themselves experiencing high levels of presenteeism. Employees turn up but are unable to carry out their duties due to illness, depression or injury. This problem can be worse than absenteeism! The stress on the team is similar and, if the person has a contagious disease like the flu, they can infect others in their environment. Presenteeism is estimated to cost the US economy $150 billion every year, and it’s often a hidden cost.

5 - Conduct a culture audit

Are you overdue for a culture transformation? If your rate of absenteeism is higher than the norm (or even higher than you’d like it to be,) that could be a sign that your company culture doesn’t align with your team’s values and work motivations. Other signs that this could be the case include:

  • High employee turnover
  • A sense of distrust in the leadership
  • A general sense of negativity or hostility in the office (A study showed that 98% of people have been treated with hostility in the workplace)
  • Teams are struggling with productivity.

If you’re noticing the absenteeism is higher in a particular department or team, you could have:

To help resolve these issues, you could use a tool like ours to form complementary teams based on each individual’s intrinsic work attitudes and motivations

6 - Implement an employee wellbeing program

An employee wellbeing program differs from a wellness program. Employee wellbeing takes a holistic approach, where wellness usually considers only physical health and related matters. A wellbeing program should become a standard benefit that applies to all employees. It must also be fair, transparent and guarantee confidentiality where necessary to get employee buy-in. 

How perceptions affect absenteeism and workplace stress

You can expect resistance to your efforts to address workplace stress and absenteeism. We’re all creatures of habit, so management could feel intimidated and employees could be reluctant to buy-in.

Expect skepticism, but don’t let it deter you!

Confidential internal communication could make managers think that they’re being spied on. Employees can fear being exposed. That’s why defining how and what will be implemented and communicating it clearly to all staff across the board upfront is essential. 

Also, go to all lengths necessary to ensure that everyone understands the intentions behind each policy. Once you can show people that changes are for their benefit, they’ll be more inclined to adapt.

Internal communication systems aren’t only for gathering information. They can be used for training and offering support on various levels. Examples include mental health info, self-awareness training, financial planning advice, healthy eating plans, fitness advice and anything else that will benefit your workforce.

F4S offers an excellent Coach & Consultant training program that is invaluable for coaches, leaders and HR professionals. Available across the globe, it enables you to identify team talents and detect blind spots using the latest science. Helping people understand their natural talents and teaching them how to address blind spots creates stronger teams and more fulfilled employees. 

Policies can be adapted to include a review of working conditions that allow for flexi-time, work from home options and extended leave under certain circumstances. You can also implement a system of recognition offering rewards for no days absent in a year, say. Keep employees involved and be open to suggestions to improve.

Final thoughts on increasing team engagement to decrease absenteeism

Absenteeism can never be eradicated completely; people will always have things that happen unexpectedly. We can, however, better control it by taking positive and proactive steps rather than ignore it or take harsh action.

Teams who are engaged feel appreciated and heard. They will be more willing to open up about their problems if they know they’re communicating in a safe space. Offering employees support and recognizing and addressing the causes of stress in the workplace will improve productivity and decrease absenteeism. It will also create a culture of open communication, kindness, trust and increased engagement.

Remember — kindness is a crucial ingredient that’s missing in many businesses, from startups to multinationals, and is more critical than ever in the current global climate.

Understanding absenteeism comes from embracing open communication. Want to get going on opening channels instead of putting out fires? 

Sign up for F4S for free and start using science to improve team dynamics, while lowering stress and absenteeism.

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