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The Cost of Absenteeism in the Workplace

Absenteeism in the workplace may seem like a problem among individuals, but the effects run much deeper. Excessive absence creates a domino-like chain of consequences which will eventually even impact your business’s bottom line. No matter what the underlying cause of absenteeism may be, it’s important to nip this problem in the bud before things get out of control.

Absenteeism on the Rise

In the U.S., employers can expect to see higher than normal. As an employer, an expectable absentee rate is about 1.5%. However, according to the Bureau of Labor and Statistics, the absence rate for all full-time wage and salary workers is 3.2%

This rate is calculated by using the following formula: (Number of Absent Days / (Number of Employees x Number of Workdays)) x 100. For example, if you had 2 absent days and 10 employees for 20 working days, your absentee rate would be 1.

Here is what the calculation would look like ( 1/(10×20))x100= 1. 

Unfortunately, most businesses are not seeing these types of rates. Absentee rates seem to be on the rise. The pandemic caused was the cause of many health-related absences. However, as of 2023, that number has nearly tripled. Experts believe that long COVID-related illness is keeping absentee rates high. Other experts believe that economic and mental health factors are also increasing the absentee rate.

Whatever the cause of the increased absenteeism, the trend is hurting large businesses as well as small business owners and their employees. Improving employee absenteeism rates is not easy. However, the problem should not be ignored. In this article, we’ll explain how absenteeism impacts your business and workplace.


1. Decreased Productivity

One detrimental consequence of employee absenteeism is a lowered rate of productivity, not only in the absent individual’s department but also among coworkers and supervisors. 

When coworkers are forced to pick up a missing employee’s slack, it prevents them from being able to manage their own work. Supervisors also spend a great deal of time working around absences, particularly in scheduling and seeking replacements.

A successful business runs like a well-oiled machine; each moving part works independently to achieve an overall function. When absenteeism runs high in the workplace, the natural flow of progress is disrupted. In a recent survey, 75% of surveyed organizations claim that absenteeism reduces overall productivity.

2. Increased Expenses

Absenteeism impacts more than just your employees and productivity level. It actually also harms your business’s bottom line. A recent study shows that unscheduled employee absences cost businesses roughly $2660 per hourly worker on an annual basis. When you consider that multiple employees are guilty of absenteeism, that number becomes an even bigger threat to profits.

Specific expenses related to absenteeism include but aren’t limited to:

  • Reduced product quality, leading to waste
  • Unproductive working hours that are spent rewriting schedules, disciplining employees, and redirecting coworkers
  • Wasted working hours spent training replacements
  • Potential safety hazards due to unqualified employees filling in for their absent coworkers
  • Overtime compensation is awarded to employees covering their coworkers’ shifts
  • Wages paid to employees who are not physically present at work

The overall cost of absenteeism for your business adds up exponentially over time. Coworkers who are normally diligent and hard-working will have to cover for their missing peers, which can increase the odds of burnout. Once your responsible employees take on too much, they too might need time away from work, creating a self-perpetuating cycle.

3. Decreased Morale

One of the leading reasons for decreased morale in the workplace is feeling unappreciated and undervalued. Often, employees who feel that their work is rewarded and acknowledged will work harder, motivated by positive reinforcement and teamwork. However, when employees frequently cover for a slacking coworker, resentment builds up and can affect their work attitude.

Lowered morale means more than just an unhappy staff. It’s been proven that low workplace morale actually leads to more disciplinary issues, such as write-ups, unexcused absences, insubordination, and even negative workplace culture.

Absenteeism, left unchecked, can create a vicious cycle. Employees miss work and cost your business money, while their coworkers struggle to pick up the slack. Because this hurts employees’ morale, it can also lead to even more absenteeism for workers who feel unhappy with their job and unrecognized for their additional efforts.


4. Disrupted Teamwork

Needless to say, teamwork suffers as well when absenteeism runs rampant. It’s much more difficult for collaborating groups to achieve their goals if a member is missing. Even if the absent employees aren’t part of any particular team and work independently, their expertise might be needed to assist a project’s development. Without them, progress is hindered and employees who need guidance are left to fend for themselves.


5. Increased Employee Turnover

A business’s turnover rate refers to the rate at which employees are replaced by your company over time. Companies with higher turnover rates will find themselves struggling to find new hires due to a negative impact on their reputation. Additionally, customer experiences will suffer from a high turnover rate, as an abundance of company time is spent training new employees.

Absenteeism over time will actually increase your company’s overall turnover rate. Workers forced to overcompensate for their absent peers will face burnout, feel undervalued and underpaid, and may leave the company due to job dissatisfaction. This logic applies vice-versa as well; workers who experience low morale are more likely to miss work, thus contributing to further absenteeism.

Not only does absenteeism increase your risk for high turnover rates, but it also costs your business thousands of dollars in turnover-related costs. Each employee who must be replaced means more training expenses and employee retention investments.

6. Customer Dissatisfaction

Although absenteeism causes a variety of issues in every industry, there is one field in particular where it really hurts: customer care. Whether it’s a customer service representative, an online chat assistant, or a company phone operator, employees who work directly with customers make the biggest impact.

You want your customers to have a quick, convenient, and favorable experience with your business. Customer satisfaction leads to more sales, more leads, and more feedback – all of which help your company learn and grow.

When absenteeism runs high in the workplace, customer satisfaction rates drop, which threatens your bottom line, your relationships with existing customers, and your ability to gain new leads and sales.

Most of us have walked into a storefront and noticed it’s understaffed. We’re all familiar with the scene – long lines, unbearable wait times, frustrated employees scrambling to get work done, and stressed customers that are more likely to complain or cause a scene. If you don’t want your business to look like this, it’s critical to address absenteeism as soon as possible.

7. Safety Risks

At first, you might not associate absenteeism with increased safety risks, but the reality is that it’s very probable. Here are some ways safety risks can emerge from long-term problems with absenteeism:

  • Overworked employees may pay less attention to their surroundings or rush themselves, thus causing potential accidents and spills
  • Undertrained temps or replacements may not be qualified to handle certain equipment
  • Being understaffed means that some employees may come to work while sick just to cover for their missing peers, thus spreading illness


Absenteeism may initially seem like an innocuous and expected dilemma, but it’s rather insidious in nature. Over time, your company will suffer if absenteeism is left unchecked. In order to see your business thrive, it’s critical to deal with absenteeism at the root before its impact reaches your company’s bottom line.

Ari Bratsis
Team Writer: Ari is a writer, blogger and small business owner based in Washington state.

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Team Writer: Ari is a writer, blogger and small business owner based in Washington state.

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