Human resources people calculate that just 85 percent of labor costs pay for actual work. The rest goes to “nonproductive time” such as vacations, holidays, sick days, and personal time.
Legitimate absences are OK, but abuse is a “bottom-line killer,” and is rising. People are collecting for vacation, health insurance benefits, or personal days they are not entitled to.
Companies such as Goodyear are doing “dependent eligibility audits.” Each employee must provide a birth or marriage certificate, student ID, or tax return to prove that dependents should be covered by health insurance.
At Goodyear, 13 percent of dependents turned out to be ineligible for health insurance. They included ex-wives, step-children who lived elsewhere, and “students” who were about 30 years old. This drove up the cost of insurance for all legitimate employees and dependents.
To check on absences, more companies are using tracking software.
At Wal-Mart, disciplinary action begins after four unauthorized absences. Dell, Georgia Pacific, and Southwest Airlines are hiring consultants who have rebranded “lost time” into a new science called “absence management,” according to Business Week.
Southwest says new software that tracks its “under the wing” crew has already saved the company $2 million annually in reduced administrative costs. They will soon have automated absence tracking for headquarters staff.
The software programs track malingerers and point out problems.
In one company, absenteeism was much higher in one department than others. Confidential talks and focus groups revealed that staffers didn’t like the boss, so they took more time off. When the problem was fixed, absence rates were normal and workers were pleased.