ROI of Dealing with Absenteeism

Return On Investment
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Ayanda Mthakahi
I would like to get a formula to calculate the ROI on . In our organization we have a big challenge of employees being absent from work. There is abuse of sick leaves and vacation leave. I want to convert the data to be ROI driven so as the management to buy in to a wellness programme in my organization. (...) Read more? Sign up for free

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ROI of Work Absenteeism

Hi! It is a tricky question. However I would address it in a following way:
Consider the amount spend after employee leaves (paid leaves) as an investment. Eg employee takes 30 days in a year x 100$ (daily salary) = 3000 $ /employee.
On the other hand calculate the profit that can be generated in 30 days time. (a bit rough way is to calculate the company's net profit /annual divided by number of employees shall give the contribution/employee. Divide by 12 shall give the profit generated by an employee.
After calculating current ROI, you can improvise it by introducing wellness programme. Add the cost of it and the benefits which would reduce the employee leaves by say 15 days. Generate the new ROI. I feel it would be better than the current ROI.
Hope this helps...

  Tyrone Skogstrom, Management Consultant, Sweden

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