Latest News & Info

Latest News & Info

Employee Absenteeism

How much work time is missed when employees go to the doctor?
How do employee absences affect the bottom line of the company? A Mercer study from 2008 entitled “The Total Financial Impact of Employee Absences” determined that the full cost of employee absences was 36% of payroll. These costs can be broken down into direct costs, indirect costs and administrative expenses. The direct costs consist of benefits and wages that are paid to the employee even while they are absent. The indirect costs consist of lost productivity from having to replace workers who are absent with people who must “cover” for the absent employee. The administrative costs consist of internal staffing and overhead to cover the absence. In this area, we will focus on direct and indirect costs. In the Mercer study, they found that incidental unplanned or extended absences accounted for 9.2% of payroll or more than half the cost of healthcare, measured at 15.4% of payroll in. This fact says that employers have an opportunity to control healthcare costs by spending more effort in managing absences than just focusing on the hard dollar cost of healthcare. Incidental unplanned absences result in both direct costs for paying the employee when they are not at work and indirect costs of having someone fill in for them. In the Mercer study employees across all classes averaged 5.3 employee absence days per year. (Mercer, 2008) If you take the average pay per day per employee, you can come up with direct costs of employee absences. When an employee is absent, do you bring in a temporary or move their responsibilities to another employee? How does this impact productivity? How many times per year do employees use their sick days for non medical issues? How is your sick day program put together? Many companies are looking at their plans to determine how to manage employee sick pay and to make sure that the system is not abused costing the company more money.
How does an on-site medical clinic help this situation? First, having a clinic on site allows for the employees who are sick to get to the doctor quicker and get back to work. Another advantage to on-site primary care clinics is that there are no co-pays for people to go to the doctor. This encourages employees to get issues taken care of instead of self-medicating or not going to a doctor based on their costs. The object of the clinic is to help employees get and stay healthy so that they can be present on the job.