Absenteeism (Part 1 of 2)

Absenteeism (Part 1 of 2)

ISSA has released a new analysis of data which strongly supports the position that cleaning is economically efficient and, thus, a relatively modest investment in improved cleaning produces substantial returns.

CLICK HERE to download the new Value of Clean Paper and learn more about justifying your cleaning budgets in a completely new way with hard numbers decision makers are looking for.

The following is an excerpt from the paper:


Absenteeism

One of the many benefits of a clean facility is the reduction of harmful contaminants in the indoor environment.  A clean and hygienic facility gives building occupants a visual comfort level and reduces potential risks that may be associated with buildings that are not as clean.  Although there are many studies that address improved indoor air quality and the risks associated with dust and bacteria on surfaces, few have demonstrated how health risks due to inadequate cleaning impact building occupant personnel costs and, ultimately, a business’s bottom line.

The research that follows addresses the connection between cleaning and the spread of illness, which manifests itself in employee lost work days (absenteeism).   Absenteeism is a substantial cost to businesses that can be reduced through proper cleaning practices.

An Absent Management Study was conducted in 2011 by Chartered Institute of Personnel and Development (CIPD) (The Chartered Institute of Personnel and Development, 2011).  CIPD is an internationally recognized company with more than 135,000 members across 120 countries.  It is one of the world’s largest human resource organizations.

The CIPD study gathered data from 592 organizations across the UK, employing more than 2 million employees.  The study documented the average days of absenteeism per employee in a variety of work settings, along with their estimated costs to employers.  The average sick days per employee per year were 7.7 days (Table 1).  CIPD determined the average cost of absences to be £673 ($869 USD) per employee per year.  Illnesses such as colds, flu, stomach upsets, and headaches were the most common cause of short-term absences.

Table 1: Average Level of Employee Absence, All Employees1

Average working time
lost per year (%)
Average number of days lost per employee per year
Mean Standard Deviation 5% Trimmed Mean Mean Standard Deviation 5% Trimmed Mean
2011: All Employees 3.8 3.5 3.4 8.7 8 7.7*
2010: All Employees 3.4 1.9 3.2 7.7* 4.3 7.4
Base: 403 (2011); 429 (2010)

A study published in the Journal of Occupational and Environmental Medicine in 2003 reported that, based on a random sample of 28,902 United States workers, health-related lost productive time (LPT) costs employers $225.8 billion per year, or $1,685 per employee per year(Stewart, 2003).

That study calculated absenteeism as the sum of hours per week absent from work for a health-related reason.   Cost impact is estimated by multiplying lost productive time (absence hours plus hours lost from reduced performance) by the individual worker’s hourly labor cost.  This is the recommended method of calculating the basic impact of absenteeism and its cost to the organization.

Hidden Costs of Absenteeism

While some organizations may track worker absenteeism, thus providing preliminary data useful in connecting cleaning impact on personnel costs, they may be missing all the absenteeism costs involved.

A 2008 survey conducted by Mercer/Marsh (Kronos Consulting & Mercer, LLC., 2008) identified the hidden costs of absenteeism.  The survey found that, in addition to the payroll cost of the absent employee, organizations must hire temporary labor or offer overtime to cover the absent employee’s responsibilities and that the “hidden costs” should be factored into absenteeism calculations.  To do so, multiply the additional hourly costs by the number of hours incurred and add this figure to the absent employee’s direct costs.

The survey also revealed that many employers fail to account for the 36 percent in administrative expenses that it takes to manage absence benefits.  This includes tracking, reviewing, and processing the absence by company staff.  Once that cost is determined, often as an annual percentage, it can be evenly divided by the total number of employees to determine the average per employee.  It then is added to the average direct and indirect labor costs above, per employee.

Still more impact was revealed by the Mercer/Marsh survey:  the disruption in the labor supply affects productivity, even with replacement staff.  This could lead to lost sales, late delivery of goods/services, customer dissatisfaction and loss of revenue. Respondents to the survey reported that unplanned absences caused a 54 percent decrease in productivity/output and a 39 percent drop in sales/customer service. If an organization can estimate these additional costs, the annual average cost of lost revenue per employee then would be increased.

[“Absenteeism (Part 2 of 2)” ]

 


A 5 percent trimmed mean was used because the large standard deviation shows there is high variation across organizations, with some reporting extremely high levels of absence. In 2010 the arithmetic mean was used because the standard deviation was within acceptable limits, showing less variation in the absences reported by organizations. Table 1 includes the mean and 5 percent trimmed mean for reference.

Dan Wagner

Dan Wagner is ISSA's Director of Facility Service Programs and has been with ISSA since November of 1999. He is primarily responsible for leading the association's sustainability and facility service programs, including the Cleaning Industry Management Standard & CIMS-Green Building Certification Program and Transpare. Dan has published numerous articles and spoken at various conferences, workshops and seminars on CIMS, standardization, management principles, and the true value of clean.

Dan is also a noted "subject matter expert" on green cleaning and a sought after speaker on environmental preferability, sustainability and green operations and maintenance. He has served as an SME for the International Facility Management Association and IFMA Foundation and is a co-author of the Foundation's "Global Guide on Green Cleaning," as well as a primary contributor to the "Business of Green Cleaning" manual.

Dan is also the association's Director of Facility Service Legislative Affairs and in-house legal counsel, having received his Juris Doctor degree from DePaul University in 1998. He is also a licensed attorney in the State of Illinois; a member of the American Bar Association, the Illinois Bar Association, the American Society of Association Executives; and serves on the Board of Directors of the National Floor Safety Institute.

About ISSA

The leading trade association for the cleaning industry worldwide, ISSA has a membership that includes more than 6,100 distributors, manufacturers, building service contractors, in-house service providers, and others interested in the cleaning industry. ISSA helps its members and their employees make valuable contacts through the industry’s largest cleaning shows, produced in conjunction with Amsterdam RAI, under the brand name ISSA/INTERCLEAN®.

ISSA also helps increase professionalism and networking opportunities through its global Web site, ISSA.com, and by offering business tools, industry standards – including the popular CIMS/CIMS-GB program - and legislative and regulatory services. It is through these initiatives that ISSA increases awareness of the true value of clean and its impact on human health, the environment, and a better bottom line. The association is headquartered in Lincolnwood, IL, USA. For more information, visit www.issa.com.

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