November 21, 2023
What is the Cost of Employee Turnover?
In this article, we’ll look at the cost of employee turnover, break down the direct and indirect costs asso...
Every business should allow adequate sick leave as part of its leave policy. Everyone gets ill, and employees need time to rest, recharge, and recover to 100% before coming back to work. It’s also important that staff don’t feel forced to come in when they’re not well, as this risks spreading the illness to other workers.
The problem comes when you have people abusing your sick leave policy. This can be costly, in terms of sick leave paid out and productivity lost, as well as signaling trust issues within the workplace.
Sick leave abuse is when employees call in sick to avoid work, even though they’re not actually ill or injured. You like to think that people won’t take advantage of your sick leave policy, but unfortunately, sick leave abuse does happen.
Read on to learn more about the cost of sick leave abuse, how to identify it, and what to do if you suspect abuse.
According to the Centers for Disease Control and Prevention (CDC), absenteeism like sick leave abuse costs employers USD 225.8 billion per year in the United States, which translates to around $1,685 per employee.
But we shouldn’t confuse absenteeism with providing time off for your employees so they can maintain work-life balance, avoid burnout, and perform at their best. Some level of unplanned absenteeism should also be planned for, as it’s normal to come down with minor illnesses or injuries every now and then.
There are some estimates that an absence rate of 1.5 percent is where the optimal balance lies between maximum productivity and avoiding burnout.
But according to the U.S. Bureau of Labor Statistics, in 2018, the average annual absence rate was 2.9 percent (almost double the optimal rate).
In Europe, absence rates tend to range between 3-6 percent, and the cost of absenteeism is estimated to be over 400 billion Euros, nearly 2.5 percent of GDP.
Sick leave abuse is not only expensive for the employers, but also affects productivity of the entire team. It falls on the rest of the team to pick up the slack when there are unexpected absences.
Needless to say, you should try to reduce absenteeism while at the same time encourage your team to take enough time off to stay fresh and motivated.
Below, we will discuss all you need to know about preventing absenteeism, specifically sick leave abuse. We’ll cover how to identify it, prevent it, and how to deal with employees who are abusing sick leave.
How you identify potential sick leave abuse in your team often depends on the size of your organization, how much communication there is between team members, and several other factors.
For example, if it’s a close knit team, and everyone talks to each other a lot, then it is easier to identify if someone is feeling a bit burned out which could potentially lead to more sick leave requests.
On the other hand, if you run a large team with multiple locations, then you might have to be more reliant on data and patterns to spot any potential sick leave abuse.
Sometimes it can be difficult to spot these, especially in bigger teams, but you can look for patterns of increased absence during crunch time.
Are there certain employees that frequently call in sick when there is increased pressure to complete projects by deadlines? Are there people who regularly tend to call in sick during scheduled quarterly meetings?
Another sign to look for is if there are a higher than average number of sick leave requests at certain times of the year when there is a greater demand for vacation days.
For example, during the summer when the weather is nice and everyone is planning activities on the lake, etc.
Your HR manager could periodically glance at your team’s leave calendar or run absence reports to look for and identify these patterns of sick leave abuse.
When you suspect sick leave abuse, your first instinct might be to take action against the offending employees.
And you should definitely make it clear in your time off policy what the consequences are for sick leave abuse.
But first, you should dig deeper to figure out if there really is sick leave abuse, if so, what are the root causes contributing to the issue.
When you identify a pattern that you suspect might be a sign of sick leave abuse, resist the temptation to jump to conclusions without further investigation.
Are there other factors that could be at play?
For example, if there is a spike in sick leave requests in October, then one of the possible explanations could be the beginning of the flu season.
Also consider whether the employees in question are demonstrating other signs of absenteeism.
Is their productivity below where it should be? Are they consistently missing deadlines?
Try to get a holistic picture of the employee’s overall performance when you suspect sick leave abuse to get a better sense of the story.
The best way to understand what is really going on is to schedule a meeting with the employee.
But be aware of how you approach the topic, and the tone of the conversation, especially if this is the first time you’ve noticed an issue.
It might be best to approach the topic from the point of offering help if the team member is having trouble.
Avoid having the conversation from a point of assumption that there is sick leave abuse. Remember, you’re still trying to get to the bottom of it all.
Ask them how they’re doing. If they’re feeling stressed, overwhelmed, exhausted, or burned out.
This approach will accomplish a few things.
First, if there is actually sick leave abuse, then it will make the employee aware that you’ve noticed the issue. That might be enough on its own to prevent further abuse in the future.
Second, it communicates that you’re concerned about the employee’s well being, and that you’re interested in helping them succeed instead of punishment. It will make them more willing to perform better for you and the team.
Finally, it also allows for more open communication with your employee, which will make it easier for you to learn if they are legitimately having health issues or dealing with burnout, so you can make plans/arrangements accordingly.
Ideally, no. You don’t want to promote a culture of mistrust in the workplace where the HR manager has to act like the police and ask for verification when people call in sick.
Asking to show a medical certificate is like treating the symptom and not the underlying root causes of sick leave abuse, which could be employee burnout, lack of motivation, or misalignment with the company vision/mission.
But it could be a temporary solution if you suspect sick leave abuse is rampant in your organization. You can ask to see a medical certificate for sick leaves in the short term while you identify the causes, and take steps to prevent them.
You could also include exceptions in your policy, because sometimes a week isn’t enough to recover if an illness or injury is serious.
So, for example, you could state in your leave policy that employees get a certain number of paid sick days, but if they need more time to recover, then they can request unpaid sick leave with a medical certificate.
In these cases, it would be more compassionate to allow employees to present a medical certificate when they get back to work after a recovery.
You want to create a culture and systems in your organization that prevent sick leave abuse in the first place. Here are a few things to consider.
Your time off policy is the foundation that allows your HR team to maintain a team absence schedule that facilitates maximum productivity while also encouraging employees to rest and recover when necessary.
Clearly stating your sick leave policy will encourage employees to take time to recover from illness, but also prevent absenteeism and costly sick leave abuse.
Here are some key points to include in your sick leave policy.
You can also define what is considered abuse of leave policy. Things like requesting sick leave for reasons other than recovering for illness, not showing up for work randomly without requesting leave, etc.
Employees should be clear on what are the consequences of abusing leave policy. Maybe it’s a warning at first, then loss of leave days, and eventually termination.
A robust leave management system allows you to implement a simple process for requesting/approving sick days that is transparent and easy to understand.
When submitting a request for sick leave, each employee will be required to include relevant information like the dates they need to be away, and the reason they need time off.
You could maintain a manual or a spreadsheet-based system, but a leave tracking software like Hello Flamingo makes it for everyone in the team.
A simple absence tracker software makes it easy for the HR manager to keep an eye on the following:
A high-performing leave management system also includes streamlined processes for requesting sick leave days.
It discourages employees from abusing sick leave because they know that the HR manager will be easily able to review their leave records.
One of the best ways to prevent sick leave abuse or absenteeism in general is to make sure that your team members are feeling happy, energized, and stress-free.
If you can prevent employee burnout, it is less likely they’ll be looking for ways to avoid and skip work.
Here are a few tips.
Absenteeism and sick leave abuse are not only costly for you, the employer, but they also negatively impact productivity and morale for the rest of the team.
Abuse of sick leave is a trust issue. It signals that your employee is, at best, not fully committed to the job, or at worst, actively taking advantage.
This abuse also affects other team members, as they are forced to work harder to make up for absent workers.
You can prevent sick leave abuse by clearly stating your medical leave policy, and by encouraging your team to take adequate time off so they can stay energized and motivated.
A leave tracking software like Flamingo can make it easy for your HR team to efficiently manage the leave calendar and quickly identify any patterns of sick leave abuse.
Flamingo makes managing your team’s paid time off a breeze.