Tuesday, November 4, 2008
Overheard At: Retiree health -- now and in the future
News You Can Use: Absent employees cost companies more than one-third of payroll each year
It’s no secret that missing workers cost companies millions of dollars in lost revenue each year. But exactly how much does the combined cost of absenteeism affect your business?
According to a new survey by Mercer, “The Total Financial Impact of Employee Absences,” the total cost of absence can equal as much as 36% of payroll. Of that 36%, nine percent accounts for unplanned absences. Planned absences, like vacations and holidays, average 26.6%.
For even a mid-sized business, this unplanned absence can account for as much as $4.5 million dollars per year.
“Employers tend to focus their energies on managing healthcare costs because the dollars are easily measured,” said George Faulkner, principal and absence management specialist at Mercer. “But this new survey suggests that absences cost employers more than half the cost of healthcare, a startling number and a call to action for all organizations to get a better handle on this often unchecked cost.”
Unplanned absences like casual sick days result in the highest per-day productivity loss, 21% versus just 15% for planned absences like vacation days. On average, employees have 5.3 unplanned absence days per year.
“The cost of absenteeism is often misunderstood, seen as un-measurable, or dismissed as negligible,” said Toni Kellam, absence management consultant at Kronos, the company that commissioned Mercer’s survey. “[T]his new survey shows is that employers can control labor costs and increase productivity by better tracking and controlling their absence-related expenses and minimizing unplanned absences.”
In order to help manage unplanned absences, 36% of survey participants use a PTO bank rather than a tradition TTO plan for nonunion hourly workers. In contrast, only 29% use PTO banks for salaried workers.
Fourteen percent of employers don’t provide paid sick leave for non-union hourly workers (excepting disability claims).
Nearly 500 employers participated in the survey.
According to a new survey by Mercer, “The Total Financial Impact of Employee Absences,” the total cost of absence can equal as much as 36% of payroll. Of that 36%, nine percent accounts for unplanned absences. Planned absences, like vacations and holidays, average 26.6%.
For even a mid-sized business, this unplanned absence can account for as much as $4.5 million dollars per year.
“Employers tend to focus their energies on managing healthcare costs because the dollars are easily measured,” said George Faulkner, principal and absence management specialist at Mercer. “But this new survey suggests that absences cost employers more than half the cost of healthcare, a startling number and a call to action for all organizations to get a better handle on this often unchecked cost.”
Unplanned absences like casual sick days result in the highest per-day productivity loss, 21% versus just 15% for planned absences like vacation days. On average, employees have 5.3 unplanned absence days per year.
“The cost of absenteeism is often misunderstood, seen as un-measurable, or dismissed as negligible,” said Toni Kellam, absence management consultant at Kronos, the company that commissioned Mercer’s survey. “[T]his new survey shows is that employers can control labor costs and increase productivity by better tracking and controlling their absence-related expenses and minimizing unplanned absences.”
In order to help manage unplanned absences, 36% of survey participants use a PTO bank rather than a tradition TTO plan for nonunion hourly workers. In contrast, only 29% use PTO banks for salaried workers.
Fourteen percent of employers don’t provide paid sick leave for non-union hourly workers (excepting disability claims).
Nearly 500 employers participated in the survey.
Monday, November 3, 2008
News You Can Use: Small businesses crave open enrollment advice
What do small businesses plan to do during open enrollment this year? Our new Web-only piece from SMB-HR gives you the scoop.
News You Can Use: Bikers need benefits, too
Leaving no stone unturned in the nation's effort to reduce the burden of gas prices and the downward economy, a little-known provision in the Emergency Economic Stabilization Act (aka, the $700 billion bailout law) allows employers to provide $20 a month in commuter benefits for employees that bike to work.
Covered reasonable expenses include the purchase of a bicycle and bicycle improvements, repair and storage.
Covered reasonable expenses include the purchase of a bicycle and bicycle improvements, repair and storage.
Tip of the Day
Get a handle on diabetes costs. Two new studies on diabetes reveal the number of Americans with the disease spent $12.5 billion last year on drugs to manage it, and that although newer, more costly medications are driving the spending surge metformin (an inexpensive, reliable generic) may be more effective than sticker-shocking Avandia.
EBN reporting from earlier this year aims to help you "close the gate" on diabetes -- a gateway illness that can lead to or worsen hypertension, heart disease and obesity.
EBN reporting from earlier this year aims to help you "close the gate" on diabetes -- a gateway illness that can lead to or worsen hypertension, heart disease and obesity.
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