The Logic of Absenteeism: How Absenteeism Creates Costs

The logic of absenteeism begins by identifying its causes and consequences. To provide some perspective on the issue, we begin our next section by citing some overall direct costs and data that show the incidence of employee absenteeism in the United States and Europe. Then we focus more specifically on causes and consequences, and we present a high-level logic diagram that may serve as a “mental map” for decision makers to help them understand the logic of employee absenteeism.

Direct Costs and the Incidence of Employee Absenteeism

How much does unscheduled employee absenteeism cost? According to a 2008 Mercer survey of 465 companies, if one excludes planned absences (vacations, holidays), the total direct and indirect costs consume 9 percent of payroll.⁵ Direct costs include actual benefits paid to employees (such as sick leave and short- and long-term disability), while indirect costs reflect reduced productivity (delays, reduced morale of coworkers, and lower productivity of replacement employees).