Rates of absenteeism, retention and turnover are indications of the workplace environment
and satisfaction of employees. By calculating these rates, you can determine how well your
workplace has adapted to the current realities of the workforce and your level of preparation
required to address future human resource needs. |
To ensure that information is consistent, the following definitions are provided: |
Absenteeism |
Employees missing part or whole days of work due to personal illness, personal
business, or other reasons (excluding paid vacation). These absences may be
avoidable or unavoidable. |
Retention |
Employer’s capacity to keep employees. |
Turnover |
Replacement of employees who have left the workplace due to either voluntary
or involuntary reasons. |
1. Absenteeism Rate – calculate the number of days absent for employees in a 12 month
period for the following reasons: |
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Case Example: Five years ago, Company ABC experienced a sudden increase in new clients.
Although the increase brought in additional revenue, the additional workload began having
negative effects on employees. |
An employee survey found that more than 50% of the workforce reported experiencing
moderate to high levels of stress as a direct result of difficulties in trying to balance work and
family life. During the past year, the company experienced its highest absenteeism rate with
an average of 10 sick days taken per employee. This resulted in lost productivity and decreased
employee satisfaction.
Recognizing the negative impact on business, management gathered suggestions from
employees on how to address their human resources issues. Based on feedback, the company
introduced a number of family friendly policies such as flex-time, reduced hours, working-from-home option, and reduced overtime as part of their commitment towards a healthier
and more balanced workplace.
A recent follow-up employee survey shows increased levels of employee satisfaction and
engagement and an astounding 35% reduction in the absenteeism rate. |
2. Cost Resulting from Absenteeism |
Note: |
Include all days or part of a day due to paid leave. Include paid and unpaid sick leave. Exclude vacation leave. |
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Case Example: Employee’s stress levels were reflected in both a rise in absences and health
problems. Absenteeism was costing the company directly and indirectly over $795,000 per
year. It was clear that the issue needed to be addressed quickly. |
After assessing workplace practices and receiving feedback from their employees, Company
ABC developed a long-term strategic human resources plan that included implementing
gender-sensitive job evaluation and pay equity, and providing a range of family-friendly
benefits and training opportunities. The long-term human resources plan helped the Company
better invest in its workforce. |
Since implementing the plan and new policies, Company ABC has saved $1.2 million in
productivity costs. In fact, a recent survey of its employees showed a dramatic increase in
overall employee satisfaction and improved health and well-being. Many reported less stress,
which was reflected in reduced absenteeism and turnover. This resulted in a more productive
workforce. By having a more positive and healthy workplace environment, Company ABC
became more competitive and better able to retain and attract more skilled workers. |
3. Retention and Turnover Rates – calculate the retention and turnover of employees by
gender for the following reasons: |
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Case Example: During its third year, Company ABC not only experienced higher absenteeism,
but its turnover rate had nearly doubled to 14%. |
As a result of competition for skilled workers in an ageing workforce and shrinking labour
pool, management was experiencing difficulties not only with retaining skilled workers but
also recruiting skilled workers. Employee turnover was having a negative impact on workplace
morale, bringing employee satisfaction and productivity levels down to an all-time low. |
Company ABC was compelled to address the issue quickly. Along with introducing new family
friendly policies, management also offered cross-training opportunities. Cross-training not only
benefited employees by exposing them to a greater range of skills and career options, but also
allowed the company to retain and attract more skilled workers. |
A recent assessment showed a dramatic reduction in the turnover rate to 6 % from 14%. |
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