Absenteeism Workplace absenteeism is a major problem costing American businesses hundreds of millions of dollars per year. There are a number of underlying issues that lead to absenteeism rates, and the company that wishes to reduce its absenteeism should design a program that takes these multiple causal factors into account. There are a number of viable alternatives for addressing this issue. The only alternatives that will be examined are those dealing with childcare/eldercare. This is a reasonable approach, as there may not be enough budget to deal with multiple causal factors simultaneously. The two main alternatives are the creation of flextime and the creation of a compressed work week. This report will outline the different alternatives and the final recommendation.

Problem Statement

Workplace absenteeism is a chronic issue that costs American businesses $3,600 per year for hourly workers and $2,650 per year for salaried ones. Productivity declines are especially to blame. Either work goes undone, or it must be done by others, who are not as effective as the person who is normally assigned to the task. Thus, absenteeism is a productivity killer. There are many causes of absenteeism, and a number of these are preventable (Investopedia, 2015). There are a number of different causes of absenteeism, which makes it more challenging with respect to tackling the problem -- it is not one problem but many different problems. However, no manager can solve all problems at once, so the focus must be on solutions that are likely to affect the greatest change. Further, since the solution should preferably be measurable, it is best to adopt one solution at a time, so that the results of the solution can be measured.

Report Overview

This report will focus on the alternatives to the problem of absenteeism in the workplace. The alternatives will flow from analysis of some of the underlying problems that lead to absenteeism, in particular the problem of people taking time off relating to child care or elder care responsibilities. First there will be criteria determined to guide the research, then the different alternatives will be laid out. There will be a methodology description followed by analysis and conclusions that highlight the most effective means of limiting absenteeism in the workplace.

Criteria

There are a number of criteria by which the alternatives are judged. These are productivity, cost, company image, worker morale and ease of implementation. The whole point of this exercise is to improve productivity by lowering the absenteeism rate, so that is why that has been included as a criterion -- it effectively measures the success of the alternative against that. The cost is another factor. Put together, the first two criteria focus the evaluation on a cost-benefit analysis. We know that the cost of absenteeism is around $3,600 per year, per hourly worker. Thus, the cost of the solution has to be significantly lower than that in order to be justifiable.

Company image is a third criteria. Basically, management does not want to do anything that could create a backlash, either among the workers or among other stakeholders. The company is concerned with its image and wants to be protective of the brand that it has built up over time. So all solutions must be at the very least neutral with respect to their effect on company image. The fourth criterion is worker morale. The logic behind this criterion is fairly simple -- poor morale is correlated with higher rates of absenteeism. Thus, if the proposed alternative will reduce worker morale, this could offset any benefits offered by changing the structure of the company or its workforce.

The fifth criterion is ease of implementation. This is an interesting area, because sometimes the implementation of a strategy is very difficult, and that can not only come with direct costs but indirect ones as well. The company does not want the solution to be more difficult to manage than the problem so the implementation of the solution needs to be fairly smooth.

Research Methods

There has been a fair amount of academic study about absenteeism, so it should not be too hard to find academic studies that provide evidence of the cost and efficacy of the different alternatives. Thus, it will be a scan of the relevant literature that helps to determine which of the alternatives is most likely to be successful. As many studies as possible should be examined, and the conclusions drawn from the studies should be analysed to understand the strengths and weaknesses of the different options, for the best possible evaluation.

Evaluation of Alternatives - Flextime

The first alternative is the use...

Flextime allows employees to have flexibility in their schedules. This means that as long as they put in the requisite number of hours, or do the requisite amount of work, they are not beholden to a specific, company-mandated schedule. Flextime came into vogue in the 1980s as a means of reducing absenteeism and turnover. Flextime accomplishes this by providing a means by which employees can reduce work/family conflict, the absenteeism driver that these proposals seek to address.
The first criterion is productivity. Flextime has been shown to reduce absenteeism, but not turnover (Ralston & Flanagan, 1985). Still, by reducing absenteeism, it is logical to conclude that flextime successfully increases productivity, because the link between absenteeism and lower productivity has been well-established.

The second criterion is cost. Flextime should not come at a significant increase in cost. First, the workers are still working the same number of hours. Second, modern technology makes it fairly easy to work from home or at off hours without incurring significantly increased costs. It can be assumed that there is some minor cost increase associated with flextime, but this would be very minor indeed. Flextime does not increase profitability (Lee & DeVoe, 2012). However, it also is not associated with significant cost increases either, so flextime is generally viewed as cost-neutral (Christensen & Staines, 1990).

The third criterion is company image. The effect of flextime on company image is negligible to most external stakeholders, but there is evidence that potential employees value flextime in prospective employers. Thus, companies that offer flextime can be said to have a better employer brand than companies that do not. Thus, flextime can assist with recruiting and it can enhance the perception of the company among certain stakeholder groups, including the highly important one of employees and potential employees (Tumasjan, Strobel & Welpe, 2011). Anecdotal evidence from when Yahoo canceled its flextime suggest that the general public has a favorable view of flextime and thinks less of companies that cancel it.

The fourth criterion is worker morale. It appears that worker morale is higher when there is less work-life conflict. This is evidenced in the enhanced employer brand associated with companies that offer flextime, and the reduced absenteeism that is associated with the use of flextime. A reduction in conflict would reasonably be expected to result in higher worker morale. It is worth noting, however, that this does not have an effect on turnover (Ralston & Flanagan, 1985).

The fifth criterion is ease of implementation. Flextime is relatively easy to implement for most jobs, especially office jobs. There was some concern in the 1980s when the concept of flextime was introduced that it might be difficult to implement, but the Internet and other modern communication technology has given rise to entire organizations that are virtual, so a little flextime is easy to do.

Evaluation of Alternatives -- Compressed Work Week

A compressed work week is when the normal forty hours is done in fewer than five days. So instead of 8x5, maybe the work would be done as 4x10. This would give employees an extra day off each week, and in many cases these days could rotate. An interesting dynamic is that this is less flexible than flextime, and could still leave the door open for absences, since many family-related absences are unscheduled.

With respect to productivity, there is evidence that productivity declines during long work days, though this effect is more aligned with heavy work weeks. There is little data available on this, however, and what data does exist shows a negligible decline in productivity given longer work days (Thomas 1992).

On the second criterion, cost, there may be costs associated with this. Essentially, the organization will always be operating shorthanded as someone will be away at any given time. This may require more workers to accommodate this, but that depends on the nature of the business. At best, the cost is neutral but in many cases the costs could be higher. On the third criterion, company image, there is no data, but this is likely neutral. Employees tend to be split on whether or not they favor the compressed work week. There is a personal preference aspect to this. The fourth criterion is worker morale, and this is probably neutral at best. It depends on whether the worker prefers a conventional work week or the compressed one, and there are a number of variables that make that a matter of personal preference.

The fifth criterion is implementation. The compressed work week requires a…