An estimated 8.7% of all payroll costs are tied to absenteeism, according to a recent study from the Macrothink Institute. To put that in context, a company valued at $1 billion that attributes 60% of its costs to payroll would incur $52.2 million annually due to absenteeism.  And that’s just looking at the administrative costs. What are the costs in performance and service when an employee unexpectedly doesn’t show?

For example, let’s use a customer support professional in any industry as a case study. If this person calls in sick 30 minutes before their shift begins, it’s likely the business will suffer at least a period of time where nobody is covering the sick employee’s job. At best, once management has a little time to address the situation, they may pull in a peer, or several peers, of the absent representative to cover for that person for the remainder of the shift. By piling more on the peer group, leadership spreads the employees thin, which tends to lead to lower performance from the peer group, who now have more on their respective plates. And, if this happens frequently, it can take a serious toll on morale.

No organization can prevent employees from getting sick, but what if business leaders could improve their lead time and have a day or even two of notice beforehand? In a well-run organization, even a little notice can help minimize the impact of unplanned absenteeism. Business leaders can shift resources, staff temporary personnel and plan in general to reduce the frenzy of trying to fill a gap the day of.

There are several areas where changes in both the employer’s and employee’s attitude or approach can contribute mightily to making this type of absenteeism less of a burden. At the same time, focusing on these areas can contribute to improving morale and performance.

Cultivate A Culture Of Honesty And Transparency

According to a 2005 study by CCH, 65% of all unplanned absences were due to reasons other than personal illness. Whether they are caring for a family member or going to a doctor’s appointment, employees often perceive disapproval for taking time off for non-health-related reason, worrying it could affect their careers and their employers’ perception of them. True or not, if this wall of fear comes down, employers can enjoy the benefit of more advance notice for absenteeism, and employees are likely to appreciate a more humane work environment and, as a result, contribute more when they are at work.

Implement Combined PTO (Paid Time Off)

Another way employers could encourage more advanced notice of absenteeism is by implementing PTO (paid time off) programs that combine sick and vacation days into one account. This is advantageous because, according to a CareerBuilder survey, 40% of people admit to calling in sick when they are not, most often on Fridays and Mondays. If an employee is not worried about losing a vacation day, they are much more likely give notice for the occasional three-day weekend. However, this policy can create a separate problem. In that same CareerBuilder survey, 33% of people also admitted to working when they were sick in order to save days off for vacation. As a result, employers will need to monitor their workforce to determine if anyone is bringing anything contagious into the office.

Employ Data And Analytics To Plan

If you have ever flown on an airplane, you’ve seen the tactic that carriers use to avoid having too many empty seats: They overbook the plane based on historical data to account for those who don’t show up for their assigned flight. Hotels use the same methodology. Only occasionally are the vendors stuck with having to make deals because too many people show up — and that’s because they use predictive analytics.

A new class of tools now available to employers, called people analytics software, allows business leaders to predict blocks of absences and other key employee performance indicators well in advance based on historical data. Factors like the time of year, location, age and tenure are among the multitude of factors that can be incorporated to get an accurate forecast of the patterns of your workforce. While employers might not be able to pinpoint who might not show up on a specific day, they could predict the number of people who could miss work and plan ahead.

Investment In The Future

The final component to strategically mitigate the impact of absenteeism is investment. After you have broken down the walls between employee and employer to encourage maximum advance notice when employees will be absent and you have employed a people analytics solution to forecast peak times for absence, providing resources to plug the holes left by absenteeism is the last step.

Ideally, an employer would have a trained bench of staff to fill in for absent employees, with similar skill sets and experience. But that possibility is neither likely nor profitable. Employing trained people who do nothing until there is a gap to fill would probably cost more than it would be worth. The solution, then, is to cross-train co-workers.

However, constantly asking employees to cover for others can be a quick way to drive people out the door. First, such actions should be recognized and compensated. Employers should offer bonuses to those who cross-train and step up to fill in for absent co-workers while holding down their own responsibilities. And if volunteers step up to work more during known absence hikes (for example, 12% of employees skip work after the Superbowl), that should be rewarded as well. These incentive programs can also provide unique insight for employers in terms of who companies’ future leaders might be, based on the willingness to step up.

Don’t resign yourself as a team or company leader to accepting unplanned absences as something that just can’t be avoided. Instead, improve your culture and policies. Forecast with your data, and invest for success.

Originally Posted by Forbes