ROI of Dealing with Absenteeism

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ROI of Dealing with Absenteeism
Ayanda Mthakahi
I would like to get a formula to calculate the ROI on absenteeism. 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.

ROI of Work Absenteeism
ashish, Member
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...

Dealing with Absenteeism Depends on the Circumstances
Tyrone Skogstrom, Member
Dealing with absenteeism depends on the circumstances:
1. Do you pay them something during sick- and vacation leave?
2. How large is your organization? Can the employees still at work see any issues and problems?
3. Why do they abuse it?

The first two identify if there are any actual cost/profit loss. The third is the most critical: Is this caused by poor management, poor salay, poor working tasks, etc? And the most critical loss for your organization could be: The staff that do show up at the office/work - how is their performance? Underperforming staff at work is probably a higher number of FTEs at stake. I have calculated performance improvements before and that is usually a strong persuasion issue for management, however hard to measure. But there are reliable workarounds for that too.



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