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Its Still A Costly Struggle, But After All-time High In
1998, Employers See Small Decline In Unscheduled Employee Absenteeism
- Continuing Trend, Workplace Stress Kept Employees Home More
- Organizations Lose Millions of Dollars Annually
- Absenteeism by Health Care Workers, Those in Mid-Size Companies Soared
(RIVERWOODS, ILL., September 21, 1999) Unscheduled worker absenteeism
remains a dilemma for U.S. employers, but some organizations appeared to have made at
least some inroads against the costly problem, according to the 1999 CCH Unscheduled
Absence Survey by CCH INCORPORATED (CCH), a leading provider of human resources and
employment law information. In 1999, companies averaged a 7-percent decline in unscheduled
absenteeism, a small step forward against 1998s all-time high. Industry sector and
company size, however, appeared to influence greatly whether employees were on the job or
not. Of particular concern, absenteeism caused by worker stress has tripled since 1995,
according to the survey. And many human resources managers, who said absenteeism cost them
millions in 1999, reported they see little relief in sight.
The 1999 CCH Unscheduled Absence Survey, conducted annually by CCH,
is the most definitive survey on absenteeism in the workplace and the only one that
measures costs associated with unscheduled absences. The survey will be released Sept. 22,
1999, in the newsletter CCH Human Resources Management Ideas & Trends.
"The small decline in the overall cost and rate of absenteeism, after last
years considerable increase, provides relief for some organizations," said
Nancy Kaylor, a human resources analyst for CCHs Health and Human Resources Group.
"However, because many sectors when examined by size or industry actually show
significant increases in absenteeism, its apparent that combating unscheduled
absenteeism is an ongoing struggle."
The 1999 CCH Unscheduled Absence Survey reflects experiences of human resources
executives in U.S. companies and organizations of all sizes and across various businesses
and not-for-profit industry sectors. (For more information, see "About the
Survey" at the end of this release.)
The 1999 survey found the overall rate of unscheduled absenteeism decreased by 7
percent from 1998 while the dollars lost to absenteeism decreased 20 percent. Yet, when
compared to a large 25-percent increase in absenteeism the previous year, the results
indicate a persistent problem one that costs employers an average of $602 per
employee, per year.
According to the CCH survey, company size also played a factor in the rate of
unscheduled absenteeism. Mid-size companies (those with 1,000 to 2,499 people and 2,500 to
4,999 people) which employ approximately 11 million Americans struggled with
increasing absenteeism. Small businesses, on the other hand, showed a significant drop in
unscheduled absences, while absenteeism in the largest organizations remained unchanged.
Some industry sectors showed dramatic or continuing problems. Three of the eight
sectors in the CCH survey reported increases in unplanned absences, with absenteeism rates
skyrocketing within Health Care to an all-time high. Other sectors reporting
increases in absenteeism this year were Government and Universities.
Reporting record-low rates for their sectors were Finance/Banking and Manufacturing.
The Service and Utilities sectors also reported decreases, while Retail/Wholesales
absenteeism rate remained stable.
As to why employees arent showing up for work, Personal Illness and Family
Issues were the most-cited reasons for last-minute absences, but Stress and Entitlement
Mentality as reasons reached all-time highs for the second straight year.
However, while employers acknowledged that paid time off (PTO) programs rather
than a specific allotted number of "sick days" and work-life programs
both had a positive effect on reducing last-minute no-shows by employees, these programs
were not widely instituted, according to CCH.
Details: Absenteeism Varies by Company Size and Industry
The overall mean average unscheduled absenteeism rate in 1999 was 2.70 percent,
compared to 2.90 percent in 1998, indicating a 7-percent decrease in unplanned absences.
However, based on industry sector and size of company, absenteeism varied significantly.
With a 121-percent jump in absenteeism to a mean rate of 3.97 percent, Health Care
absenteeism rates, which reached an all-time high for this sector, were the highest of all
industries surveyed. Other sectors reporting increases in absenteeism this year were Universities,
with a 6-percent increase from last year to a mean rate of 3.59 percent; and Government,
with a 15-percent increase to a mean rate of 3.52 percent.
Two industries also reported record-low rates of absenteeism: Finance/Banking,
where absenteeism dropped 44 percent to a mean rate of 1.42 percent, and Manufacturing,
where absenteeism shrank 41 percent to a mean rate of 1.39 percent. The Manufacturing
industry had the lowest mean rate of absenteeism among all sectors surveyed. Other sectors
reporting decreases in unscheduled absences included Utilities, with a 37-percent
decrease to a mean absenteeism rate of 2.16 percent, and Service, with a 15-percent
decrease to a mean rate of 2.38 percent. With a mean rate of 2.73 percent, Retail/Wholesale
reported no substantial change in unscheduled absenteeism.
Unscheduled absenteeism also varied based on company size.
Mid-size companies, those with 1,000 to 2,499 employees, reported that
unscheduled absences skyrocketed 51 percent, reaching a record-high mean rate of 3.98
percent for 1999. This was the highest recorded mean rate of absenteeism for any size
company since CCH first began conducting the survey in 1991. In addition, those employing 2,500
to 4,999 employees also saw a 12-percent increase in absenteeism.
However, small businesses have reversed the trend. Those employing fewer than 100
employees saw a 76-percent decrease in absenteeism this year, down to a mean rate of
just 0.77 percent. These entrepreneurs had the lowest rate of absenteeism compared to all
other size organizations.
Change in Unscheduled Absenteeism Rates Since 1998
|99 or fewer employees
|10,000 or more employees
Employers Hit Hard by Dollars Lost to Absenteeism
When overall costs were analyzed, the survey found that while costs have come down,
unscheduled absenteeism is still expensive, costing large companies more than $3.4 million
Cost by Company Size
1999 Total Annual Cost
|99 or fewer employees
In addition, indirect costs not included in the survey estimate
can greatly increase costs to the employer. Overtime pay for other employees or
hiring a temporary employee to cover for the absent worker, as well as indirect costs
associated with a decline in morale and lower productivity among workers who are expected
to cover for an absent employee should be calculated and addressed by employers.
The high averaged cost of unscheduled absenteeism decreased by 20 percent, from as high
as $757 per employee annually in 1998, to as high as $602 in 1999.
Reporting the greatest decrease in 1999 were small businesses. Those with fewer than
100 employees the countrys largest employer group with 33 million people
experienced a steep decline in average cost per employee, from as high as $1,044 in
1998 to $537 in 1999. Organizations with 100 to 249 employees and those with 500
to 999 employees were the only categories reporting increases in costs for absenteeism
over 1998, according to CCH.
Change in Unscheduled Absenteeism Costs Since 1998
|99 or fewer employees
"While dollars lost declined in 1999, many companies looking for
ways to improve earnings by controlling costs shouldnt ignore the impact of
unscheduled absences on their bottom line and on productivity," said Kaylor.
"With the appropriate programs in place, businesses could significantly reduce the
rate of absenteeism further, improve the work environment and see substantial
Not Physically Sick, Just Had Enough
The 1999 CCH Unscheduled Absence Survey also reviewed the reasons employees
called in sick at the last minute and increasingly its Stress and Entitlement
Mentality that cause employees not to show up for work.
Personal Illness and Family Issues were the two leading reasons for
unscheduled absences, each accounting for 21 percent of unscheduled absences, followed by Personal
Needs at 20 percent.
However, both Stress and Entitlement Mentality as reasons for unscheduled
absenteeism reached all-time highs for the second consecutive year, each now accounting
for 19 percent of all unscheduled absences. Conversely, Personal Illness, which had
accounted for 45 percent of all unscheduled absences in 1995, (the first year that CCH
began tracking reasons for unscheduled absences), decreased to a record low in 1999 of
just 21 percent. Family Issues also showed a decline from last year when it had
accounted for 26 percent of absences, while Personal Needs remained unchanged at 20
percent of all unscheduled absences.
Of particular concern, according to Kaylor, is the Stress category, which has
more than tripled since 1995 when it accounted for just 6 percent of unscheduled absences.
"In addition to increased absenteeism, stress manifests in a number of ways that
are unhealthy and unproductive for the individual, the organization and other employees.
The challenge for employers is finding a solution for combating stress. The company itself
may be causing or compounding employee stress, for example, by asking fewer workers to do
more, having ineffective work processes or inadequately trained supervisors," said
Kaylor. "While companies are continuing to make some progress with family-friendly
policies, its apparent that more attention will have to be given to programs that
help address employee stress."
Family-Friendly Policies Inch Forward
To better understand how companies can reduce their unscheduled absences, the 1999
CCH Unscheduled Absence Survey also asked employers about their experiences with
work-life programs. Survey results indicated these programs could help reduce unplanned
absences among workers. However, the organizations didnt necessarily offer these
programs to their workers.
On a scale of one to five (with five being most effective), the work-life programs
ranked highest by human resources professionals for reducing unscheduled absences were Child
Care Referral (3.64), Leave for School Functions (3.59) and Flexible
As for what companies practice, more than one-half (58 percent) indicated their
companies offer Flexible Scheduling. This continues to increase from the 1997 CCH
survey, when less than one-quarter offered Flexible Scheduling. However, among the
two other leading work-life programs seen to reduce unplanned time off, Leave for
School Functions was offered by only 26 percent of responding organizations and Child
Care Referral was offered by far fewer, just 16 percent.
Strong Work Ethic Reducing Absences; Effectiveness of Fear Dwindling
Companies reporting a decrease in unscheduled absenteeism attributed the decline most
often to a Strong Work Ethic (17 percent), followed by Loyalty to Supervisor
(16 percent) and Fear of Punishment (16 percent). While the percent of
organizations indicating Strong Work Ethic and Loyalty to Supervisor as
effective in reducing absenteeism remained unchanged from last years survey, Fear
of Punishment as a reason declined this year, indicating that it may not be an
effective combatant for absenteeism.
Counterbalancing this decline was an increase in Effective Absence Control programs
as a reason for lower absenteeism. Fifteen percent of organizations that reported
declining absenteeism in 1999 attributed it to Effective Absence Control programs,
up from just 9 percent in 1997.
"With stress, personal needs, family matters and other issues confronting
employees, fear of punishment by their company may be the least of an employees
concerns, and may not be an effective strategy for employers in a particularly tight job
market," said Kaylor. "Building a culture that allows employees to balance
work-life issues and backing that with effective programs is likely to have a greater
Absence Control Programs Effective, But Most Organizations Dont Offer
Paid Time Off (PTO) continued to increase its lead as the most effective
absence control program, according to the 1999 CCH Unscheduled Absence Survey. In
1998, four out of eight company-size categories saw PTO programs as most effective.
In 1999, PTO programs were seen as most effective in controlling unscheduled
absenteeism in six out of eight of company size categories. Only those with 2,500 to
4,999 employees and those with 10,000 or more employees saw Buy Back
programs as most effective.
PTO programs provide employees with a bank of hours to be used for various
purposes instead of traditional separate accounts for sick, vacation and personal time. Buy
Back programs provide employees with compensation for not using all their allotted
In addition, PTO programs were perceived as the most effective absence control
program by four out of eight industry categories: Manufacturing, Finance/Banking,
Government and Service.
However, as for what they practice, only 27 percent of organizations reported they have
implemented a PTO program, slightly up from last years 25 percent. Rather,
the single most used absence control program remained Disciplinary Action, used by
77 percent of organizations, according to the CCH survey.
"Traditional sick-leave plans do not address the real issues that are driving
employee absenteeism," said Kaylor. "If employers are going to effectively
address unscheduled absences, they need to turn knowledge into action, developing time-off
programs that truly fit with todays work-life demands. Theres little value in
outdated plans that cost organizations more, are not flexible enough for today's workplace
and fail to meet even the basic needs of workers."
Many Employers Fear Increased Absenteeism in the Next Century
While absenteeism declined overall in 1999, nearly one-half of the organizations
surveyed remained concerned about the future. Perhaps influenced by a low unemployment
rate and high competition for employees in all business sectors, 48 percent of human
resources professionals expected unscheduled absenteeism to increase over the next two
Looking at the respondents across industry categories, the majority of sectors
expected unscheduled absenteeism to increase or remain unchanged. Concern was particularly
high in Retail/Wholesale where nearly two out of three companies (63 percent)
expected more workers to call in sick.
Among the other industries expecting absenteeism to increase or remain the same were:
55 percent of Service, 53 percent of Finance/Banking, 52 percent of Manufacturing,
50 percent of Government and particularly noteworthy because of already
record-high absenteeism rates 50 percent of Health Care organizations. The Utilities
sector was the most optimistic, with only 14 percent of companies in this sector expecting
an increased rate of absenteeism in the next two years, while 42 percent of the Universities
anticipated an increase.
A varying degree of concern about future increases in absenteeism also was apparent in
companies of all sizes. Those registering the highest level of concern were respondents
from organizations employing 1,000 to 2,499 workers and those with 5,000 to
9,999 employees, where 66 percent and 57 percent, respectively, expected increases in
absenteeism over the next two years. This is of particular concern for those with 1,000
to 2,499 workers, as they already saw absenteeism rates jump 51 percent this year.
"With so many organizations concerned about increased absenteeism, its
apparent that companies have to become committed to tackling the problem if theyre
ever going to gain a significant and sustainable reduction in the costs and rates of
unscheduled absenteeism," said Kaylor.
About the Survey
The 1999 CCH Unscheduled Absence Survey, now in its ninth year, surveyed 305
human resources executives in U.S. companies and organizations of all sizes and across
major industry segments. The 1999 survey reflects experiences of randomly polled
organizations with an estimated total of 793,844 employees.
The organizations surveyed included employers in 46 states, the District of Columbia
and Puerto Rico. Eight business segments are represented including: Manufacturing,
Finance/Banking, Health Care, Retail/Wholesale, Service, Utilities, Universities and
Mean absence rates were calculated by dividing total paid-sick hours by total
paid-productive hours. Scheduled absences, such as vacation, legal holidays, jury duty,
personal time and bereavement leave were not included.
CCH Human Resources Management Ideas & Trends newsletter sponsored the
survey, which was conducted by Michael Markowich, Ph.D., a member of the CCH Human
Resources Management Advisory Board.
To Obtain a Copy of the Survey
Copies of CCH Human Resources Management Ideas & Trends newsletter
containing the complete 1999 CCH Unscheduled Absence Survey are available by
calling 800-449-9525, and asking for offer number 06280001. Price is $29.95, plus tax,
shipping and handling.
About CCH INCORPORATED
CCH INCORPORATED, Riverwoods, Ill., is a leading provider of tax and business law
information and software for human resources, accounting, legal, securities, health care,
banking and small business professionals. The companys Health and Human Resources
Group is among the nations most noted authoritative sources of employment law,
including information on benefits, compensation, worker safety and human resources
management. Its publications and software for human resources professionals include
Human Resources Management, Pension Plan Guide, Benefits Guide and Payroll
Management Guide. CCH is a wholly owned subsidiary of Wolters Kluwer U.S. The CCH
web site can be accessed at www.cch.com.
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EDITOR'S NOTE: For more information about the survey, contact: Leslie Bonacum at
847-267-7153 or Mary Dale Walters at 847-267-2038. Available to members of the press:
- Charts and graphs depicting the full range of survey data
- Historical survey data
- Case histories
- This release and related information are posted in the CCH Press Center: www.cch.com.