From our archive. This article was published on 9 December 2019. Rules and amounts may have changed since.
In 2018, the absenteeism rate in one European region rose to 7.97% according to official government figures. Out of 100 available working days, an employee was therefore absent through illness for an average of 7.97 days. And that comes with a hefty price tag. An absenteeism calculator is a sobering tool that brings you straight back down to earth.
An employer who scores well
Imagine you are the managing director of an SME that employs 100 people. You have built up a successful business and your heart is in the right place: your people should be doing well. Suppose the average gross monthly salary is 3,510 euros. Because of the high earners, that does not reflect a true average reality. The median gives us a more realistic picture: say 3,100 euros gross. As managing director, you opt for a decent and realistic salary and, across your organisation, you end up at an average gross monthly salary of 3,000 euros.
As managing director, you look after your employees well: a fruit basket is delivered every week, you actively promote exercise in the workplace by regularly organising a yoga session during the lunch break, and you encourage your employees to live as healthily as possible. In return, you get vital employees who perform above average when it comes to absence: let us dream of an unbelievable 1% of your employees who are guilty of short-term absence. Your long-term absence also scores particularly well: only 1 employee is at home with burn-out. You rub your hands triumphantly, because just compare that figure with the national average!
The absenteeism calculator
Want to bet that proud smile melts away when you pick up the absenteeism calculator? According to that calculator, even with these meagre percentages you quickly end up with a total annual absence cost of more than 200,000 euros! Yes, you read that correctly: two hundred thousand euros. Now that is a lot of money.
Disbelief is the average reaction: “surely after a month a sick person is off the payroll”. True, but have you ever stopped to think about the costs that arise when someone is absent for a long or shorter period, in terms of the workload for their direct colleagues, work that is not delivered, knowledge and experience that are not available, … With long-term absentees, a replacement often has to be found. Writing a job vacancy, running the recruitment process and training the new person costs a small fortune. In short, the managing director of this SME has a whopper of a problem!
Negative figures
And yet the managing director in the example scores particularly well. The figures have meanwhile become alarming. Not only did the absenteeism rate rise to 7.97% in 2018, the following figures also raise eyebrows: 64% of employees experience stress at work (Securex), 72% find their job meaningless (AMS), 73% of employees do not feel engaged and 17% are so demotivated that they even (secretly) work against the organisation (Gallup), 51% regularly have a negative feeling at work (Agilitas), 21% feel despondent and 29% are sad, anxious, angry or indignant at work (HIP-Consult),…
These figures point to a fire that is slowly going out. The engaged, motivated worker of the past quietly transforms into a burnt-out individual who weighs on the whole team. We do not need to think of burn-out straight away, but throughout the entire period that precedes this energy disorder, you repeatedly lose the employee in question to short-term absence. And absence, both long-term and short-term, costs money.
The cost of absenteeism
The cost of a sick employee to an organisation is still underestimated. International studies report a total cost of 15 to 20% of payroll expenditure, covering both direct and indirect absence costs.
The cost of the direct components is fairly visible and can add up enormously on its own. Think of the salaries of absent and replacement employees, overtime and administration costs, the time of HR and managers, going through return-to-work programmes,…
However, when you also take the indirect costs into account, the price tag becomes downright astronomical. Reduced productivity and motivation among those who remain because of the increased workload, missed business opportunities because of the time it takes to find a replacement, all kinds of costs and risks associated with training and onboarding replacements,…
In addition to the visible and less visible costs we have just mentioned, we should above all not lose sight of Gallup’s groundbreaking 2017 study, whose conclusion was that on average only 1 employee in 10 is truly motivated and 1.7 actively work against the organisation. The rest of the rowers sit in the boat as dead weight. So it should come as no surprise that the enthusiastic rower becomes exhausted. The colleagues who do not row along, and those who even actively work against the others, are present but far from productive. Result: the company suffers from presenteeism.
The cost of presenteeism
Presenteeism is an indicator of stress and unease at work, but it is often overlooked. When employees keep working despite excessive pressure, usually with the best of intentions and out of a strong sense of responsibility, this inevitably has negative consequences over time for productivity and the quality of the work.
The risks to the individual’s health, such as an increased risk of depression, burn-out and cardiovascular disease, are visibly growing. Moreover, not only are more mistakes made, but relationships within teams can also suffer.
After all, the demotivated, overworked and stressed employee is unproductive, disengaged and a veritable negativity sponge and mood killer, so that irritations and demotivation can spread like wildfire throughout the organisation. Research by Harvard Business School into toxic workers (Housman and Minor, 2015) also shows that a single employee who spoils the atmosphere considerably increases the likelihood that high-performing colleagues will leave the organisation.
The benefits of happiness at work
For every problem there is a solution. Here, the solution is called happiness at work. Choosing happiness at work translates into an integrated approach to company culture, so that short-term and long-term absence are reduced to the absolute minimum. Thanks to the right interventions within a consistent happiness-at-work strategy, you put your employees (back) in touch with their strengths, and that is precisely the answer to all the psychosocial issues that tend to lead to short-term and long-term absence.
Working on happiness at work is an investment that delivers a measurable financial return for companies that opt for a sustainable approach. A selection from the range of positive effects: happier employees make for better-performing teams with a better rapport, closer collaboration and stronger relationships with customers and suppliers. Employees who are happy are more creative, more productive, more efficient and more engaged. Happy employees are more optimistic, more energetic, more resilient, make fewer mistakes, have fewer accidents and fall ill less often. Companies that work sustainably on happiness at work report lower turnover and lower (long-term) absenteeism figures.
Besides these widely described effects, there are also hard figures that point to the return on happiness at work. For example, it appears that 70% of chronic diseases could be prevented by a healthier lifestyle, not only at home but also in the workplace (Securex 2018). Gallup finds that working on engagement leads to 17% more productivity, 20% more sales, 21% more profit, 41% less absence, 70% fewer accidents and 40% fewer quality issues. As early as 2008, the researchers Goetzel and Ozminkowsky noted that every dollar a company invests in the well-being of its employees yields roughly 3 to 5 dollars in return. An article in Harvard Business Review in March 2017 already illustrated that companies that actively invest in happiness at work and a positive long-term employee experience can achieve considerably more financially. The average share value of the group of companies with a ‘great place to work’ (Glassdoor) rating, compared with the S&P500, produced an impressive difference in favour of the happy workplaces.
Happiness at work in practice
More and more organisations are starting to see that happiness at work is the lever for sustainable work. In the Netherlands they have been convinced of this for longer. At the catering company Hutten in Veghel, for example, happiness at work is central. Their motto reads: ‘We want to be the best, the nicest and the happiest’. Because happy employees carry their work out with passion. And with passion as your calling card, you make the difference today.
At Hutten, happiness at work, or ‘enjoyment at work’, is nothing woolly. It is translated very concretely into HR instruments. And that starts right at the beginning of the working relationship. When people join, they do not receive an employment contract, but a vitality agreement. In fact, this is the often unwritten psychological contract, but on paper.
And that this approach pays off is clear from the figures Hutten has reported since placing happiness at work at the centre:
- 37 per cent less turnover,
- 25 per cent less absence,
- a 31 per cent increase in productivity
- 50 per cent more engagement than the benchmark.
- Positive impact on the employer brand and on appeal to customers
- Positive effects on creativity
In short, happiness at work works!
Would you like to get actively started on well-being or happiness at work in your team or your organisation? Then we will gladly help you! Tryangle supports organisations and employees in solving absenteeism and productivity issues through well-being interventions and working on happiness at work. After all, happy employees are more productive.
Do you want more happiness at work in your organisation?
Do you want to know how happiness at work can take your results to a higher level? Would you like to discover, concretely and in more depth, the various areas in which you can work on happiness at work within your business or for your team? Do you want to know which happiness-at-work components can deliver the most results? Do you want to know everything about how to create a happiness-at-work strategy tailored to the challenges in your organisation?
Then book a “discovery session” for the “tools for happiness at work” now.
In this two-hour in-company workshop (for a group of 12 employees), you will find out more about the keys to happiness at work. Together with a happiness at work professional, you can test which tools may be the most interesting and suitable for your organisation depending on the company culture, current challenges and priorities, and find out more about how everything works.
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This article was provided by Tryangle.