When I think back to some of my first jobs, I am quickly reminded of how strategic management and policy have the power to make an entrepreneur’s dream come true, or crush it within a few months because the business owner failed to prepare for something like the cost of staff absence.

During the summer between my junior and senior year of college, I had two full-time jobs at a couple of newer local restaurants.

From 9 am to 4 pm I tossed salads for business professionals, lawyers and health nuts alongside coworkers who were mostly college and high school age students at the fast-casual restaurant Vinaigrette Salad Kitchen.

My second job started at 5 pm, giving me about an hour to drive home, change clothes and think about all of the things I could be doing instead of working.

From 5 pm to midnight I prepared overpriced appetizers, salads, and desserts at the French bakery-market-beer hall-restaurant National Provisions.

Most of the staff were in their 20s or 30s and shared an appreciation for craft beers, cocktails, and creative expletives; a recipe for which the food service industry is known.

Going from one restaurant to another had the effect of bringing out the types of perks that set each job apart.

Having a beer with your coworkers after a busy night is just one example of the numerous “staff benefits” that I enjoyed at night.

On the other hand, a group sampling of cucumber lemonade felt more like an employee meeting at 7 am on a Saturday than an actual job-perk.

Here’s what I learned about both businesses and their attendance policy:

On the one hand, staff absences were frequent and due to a variety of reasons such as mission trips, vacations, out-of-state residences or school-related obligations.

On the contrary, staff absences were not nearly as reoccurring with an older staff—when it did happen it was usually because of a bad hangover.

As entrepreneurs, we can use first-hand experiences to create effective attendance policy and cultivate productive human resources.

This tweet from Gordon Dahlby, an educational technology leader and policy consultant, puts it nicely:

“Good policy cannot be created in the absence of firsthand knowledge.” #edadmin But don’t salt the studies with only staff that agree

— Gordon Dahlby (@gdahlby) May 5, 2016

A Staff Absence Policy That Fits Your Business Plan

Working in two very different work environments showed me just how important it is that your absence policy addresses your team needs.

Understanding the “verticals” of your business and industry can provide insight into the issues on employee-level that otherwise may have gotten overlooked.

It’s important that your absence policy addresses your team needs

Having programs like PTO (paid time off) banks, incentive programs, and disciplinary policies are excellent, but, to be effective, you should avoid standardization.

Although one system may work for a general business model, it may not be the best fit for your unique and distinctive organizational culture.

Your workforce might include salaried workers, hourly workers, part-time workers and unionized workers, making leave management and accrual policies difficult to implement.

The more generic your staff absence policy is, the less likely managers and employees will follow it.

Or even worse, let’s say that your staff absence protocol is enforced by management, but doesn’t sit so well with your employees.

If your employees feel that your policies are irrelevant or ineffective, then you might find it difficult to keep valuable staff members.

“If employees suspect that policies are not being monitored or enforced consistently, it can lead to abuse, grievances, and low employee morale.”

See the white paper, Reduce Costs and Increase Productivity with an Automated Absence Management Solution.

When the head chef at my evening job took “weekend vacations” that lasted until his staff had taken care of the hard work, it became apparent that a lack of enforcement is a source of low employee morale.

On the other hand, Vinaigrette’s scheduling flexibility led to one too many leave absences within the same period.

In this case, staff absence policy, although accommodating, increased the risks of low labor if, for example, there was a staff absence due to an unforeseeable circumstance such as sick leave or emergency leave.

As a result, productivity levels fell at both businesses during the busiest service hours, when quality and service are paramount.

Absence impacts your business across the board by increasing workload, disrupting the work of others, increasing stress, decreasing morale, reducing the quality of work output and creating mandatory overtime.

“In extreme cases, unauthorized absenteeism can cause production lines and service delivery to slow or stop, reducing revenue and creating longer customer service wait times.”

 

See the white paper, Reduce Costs and Increase Productivity with an Automated Absence Management Solution

Both experiences taught me valuable lessons about the crucial role of staff absence policy in fruitful and unsuccessful business development.

As an entrepreneur, you can create an effective staff absence policy for your company by identifying problems and offering solutions with the advantage of firsthand experiences.

The Staggering Cost of Staff Absence 

If you’re a business owner, then you could be saving tons of money on staff absences.

You might not be aware how much staff absences are hurting your business, but their tendency to stack up is problematic, to say the least.

In one study, the cost of absence amounted to $14,921,000 for 1,000 employees with a total payroll of $43,000,000.

In other words, the total cost of staff absence averages to 35 percent of base salary. Planned absences make up twenty-six percent, while unplanned and extended absences constitute 8.7 percent of payroll.

The total cost of staff absence averages to 35 percent of base salary

Staff absences involve several direct and indirect costs such as paid leave, hiring replacements, and the cost of lost productivity.

Regarding the expenses of hiring replacement staff, the study found that only 71 percent of replacements are efficient when covering for unplanned absences.

According to the Gallup-Healthways Well-Being Index, the annual cost of lost productivity due to absenteeism varied by occupational field.

Professionals were the highest at $24.2 billion. Followed by managers and executives with a total lost productivity cost of $15.7 billion.

Unscheduled absences cost businesses $3,600 per year

Additionally, unscheduled absences cost businesses $3,600 per year for hourly employees and $2,650 per year for salaried employees.

The expenses of an unscheduled absence are mainly due to paid time off, absenteeism management costs, overtime for replacement work or the cost of hiring temporary workers.

Additional costs of staff absences include poor service due to work overloads, less productivity and increased management responsibilities.

Leave Policies

Sick leave is one of the most common causes of absenteeism, but there are also a wide variety of other reasons to consider in your staff absence policy.

Some of the less common reasons for absenteeism include bullying and harassment, stress or low morale, job hunting and childcare.

Sick leave is one of the most common causes of absenteeism

Due to the growing list of grounds for absenteeism by staff, more businesses have expanded their leave policies to include, for example, staff with psychological ill-health.

Greater Manchester’s Police and Crime Commissioner, Tony Lloyd, acknowledged the trend in a recent tweet:

New policy to support staff with psychological ill-health has seen drop in long-term absence

— Tony Lloyd – GMPCC (@GMPCC) April 7, 2016

If an employee is on sick leave for a considerable amount of time, it’s a good idea to address phased return to work pay in your policy.

Phased return to work pay can help your employees re-adjust to excellent attendance and performance at work.

It will give employees the chance to return to work gradually as they recovery by permitting staff to work less hours and have reduced workloads to start out.

The phased return to work pay will also reduce the amount of leave time taken for a medical illness and will refrain from overloading employees upon their return.

Voluntary leave policies may include medical and personal leaves.

In a personal leave policy, you could give employees time off to pursue an educational opportunity or further training to advance their career.

There are certain situations where a leave of absence is mandatory.

A mandatory leave of absence is determined by federal, state, and local laws such as the Family and Medical Leave Act (FMLA) and Americans with Disabilities Act (ADA), military leave, and jury duty.

If for example, an employee qualifies for FMLA, they will have worked 1250 hours with a viable reason to ask for time off.

These may include childbirth, adoption and foster care, a serious health condition, caring for a family member with a medical condition or military reasons.

The FMLA protects employees’ jobs until their leave ends and allows up to 12 weeks off in a 12-month period.

As the employer, you do not have to pay employees on FMLA leave unless they have available paid time off or sick time and they decide to use it.

Unless that is, your policy requires employees to use paid time before leaves can go unpaid.

Netflix, Etsy, and Adobe are just a few examples of some companies with the best parental leave policies.

Netflix gives its employees up to one year of parental leave after the birth or adoption of a new child.

Etsy employees have up to 26 weeks of paid leave which can be used over a two-year-period following the birth or adoption of a child.

Adobe offers their staff twenty-six weeks of paid maternity leave and sixteen weeks of paid paternity leave.

Attendance Policies

Your business depends on your employees. If employees don’t show, then things don’t get done. It’s as simple as that.

So, how do you make sure your staff attendance is consistent? The first thing you should do is to create an attendance policy.

An attendance policy will inform staff about the acceptable reasons to miss work.

It will also describe your company’s expectations for employees when they request leave time.

Lastly, an attendance policy should inform employees about the unacceptable reasons to miss work.

So, how do you make sure your staff attendance is consistent?

Your attendance policy will prevent miscommunication and misunderstandings between your management and staff.

It will also make your employees accountable for their actions.

On that last note, you will want to establish a “No-Fault Attendance” policy.

A No-Fault Attendance Policy will keep employees with excellent attendance records from getting upset at employees who go unpunished for poor attendance.

In general, an effective attendance policy maintains a reasonable balance between strictness and flexibility.

Secondly, an attendance policy should contribute to high work morale by rewarding and acknowledging employees for good attendance.

Your attendance policy could also prevent you from being sued for unemployment compensation by proving that an employee did not abide by the attendance policies and had consistently poor attendance.

An Effective Solution

A staff absence policy is one of the most critical components of your business.

It can guide you through tough situations and prevent them from happening at all. In other words, do not overlook your staff absence policy.

Be confident that it will only contribute to productivity levels, high morale, and excellent attendance records.

But how do we keep track of this information? It’s easier said than done and that’s why CakeHR is here to help you quickly define absence staff policies and rules.

CakeHR’s leave management software allows employers to sync data in real time with MS Outlook, Google Calendar, and Apple iCal, to make life easier and integrate all of your tech solutions into one, easy-to-manage information hub.

Let’s say you have noticed some problems with your staff absence policy. Over time and as our workforce changes, so should our staff absence policies.

CakeHR’s solution is to provide employers with individual employee and company reports that they can access to understand their habits quickly and concisely.

A staff absence policy is one of the most critical components of your business

Or, let’s say one of your staff is on an indefinite medical leave, and now you are tasked with figuring out the best way to continue work minus one person.

You can use CakeHR’s company org chart to quickly find out who is doing what and where they are doing it.

Based on this information you can temporarily manage an absent employee’s duties across several others and prevent productivity disruption.

The best thing about CakeHR’s leave management software is that it is designed to make life easier for the boss and the employees.

From requesting time off to approving time off, your relationship with employees is at the heart of CakeHR’s software solution.

So, why not make life easier?

Matt.

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Make staff absence management easier for your company right now with a free trial of CakeHR.