Employers that suffer from surprise employee absenteeism are seeing more than just a direct reduction in revenue; there are hidden costs that include loss in productivity and stress among workforces.

The “perception” associated with employee absenteeism has become a growing concern among the present workforce, says Joyce Maroney, director of the Workforce Institute at Kronos Incorporated, a global leader in delivering workforce management solutions in the cloud.

“There is very high impact, in terms of added workload and stress on fellow employees,” says Maroney. “Especially when it comes to unplanned absence.”

See also: Employee purchase programs can encourage workers to use their vacation time

In new research, roughly 75% of employers report that employee absences have a moderate to large impact on productivity and revenue. The Total Financial Impact of Employee Absences Survey, conducted by the Society for Human Resource Management and in collaboration with and commissioned by Kronos Incorporated, highlights that this detrimental impact is due to the sheer cost linked to paid time off for full-time employees. When employers factor in wages, overtime and replacement workers, paid time off equaled about 15.4% of payroll in 2013, according to the study.

The survey, which includes responses from more than 730 SHRM members and Kronos customers and prospective customers, finds that when adding in indirect costs – such as gaps in productivity, adding to and disrupting workloads and increased stress – the total costs of paid time off in terms of payroll is between 20.9% and 22.1%.

“Understanding the drivers of absenteeism and addressing them immediately can influence strategies for improving productivity, as well as minimize the burden on co-workers and supervisors impacted by employee absences,” Evren Esen, SHRM’s director of survey programs, explains.

See also: Duration of absences affects manager response

According to Maroney, having policies that are consistent and administered can be a plus, she says, but notes that having a welcoming workplace may ease some of the associated stress. Meanwhile, the study finds that three-fifths to two-thirds of all organizations, depending on employee type, say that have formal written attendance policies.

“Creating a workplace culture in which people can have adult conversations in advance of their need to take time off so that the manager can plan to either shift work around, if that’s possible,” Maroney says. “You’re not going to erase unplanned employee absenteeism, [but] planned absenteeism is going to help mitigate some of these costs.”

One efficient way to encourage planned absenteeism is through effective tracking of paid time off through technology. While 35% of organizations report using an integrated system/HR information software and 29% utilize automated third-party software, 15% of employers are still using manual processes to track employee hours.  

“It’s obviously not a realistic expectation to think that were going to achieve some nirvana, where nobody ever takes a day off that we don’t know about in advance,” says Maroney. “But I think the real key to all this – the extent to which managers can plan ahead – it’s going to mitigate the extra costs associated with unplanned absence.”

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