The metric to look at in a tight labor market

In an environment where it is difficult to hire new people, employers need to look after the staff they already have. One metric in particular – absenteeism – can provide insight into how well they’re doing it.

Ask any hiring manager how easy it is to fill positions and they’ll tell you it’s a struggle. Companies across the board are grappling with a tight labor market and are finding it difficult to find the right people – at the right cost. In this environment it is more important than ever for companies to retain the talent they already have and ensure they’re working to their full potential. This includes providing a positive work environment and culture. An indication that employers are not doing this – and might have low engagement and wellbeing among their staff – is in absenteeism.

Being a good employer means being attuned to your employees, listening to them, and understanding the relationship between absenteeism, employee engagement and their wellbeing. Companies that do this well will have an advantage when it comes to attracting the best talent over the competitors. And if companies are not doing this well, they may find that declining engagement or wellbeing will manifest themselves in rising absenteeism levels.

Absenteeism is usually defined as absences that haven’t been planned – so things like parental leave or annual holidays don’t count – and it could also refer to habitual absences. If the numbers are increasing, it’s worth finding out why.

Absenteeism is an important metric because it carries costs, affects productivity and has other knock-on effects as well. In an environment where companies are already short-staffed, absenteeism places an even greater burden on the workforce that remains, which in turn could lead to more absences.

People shouldn’t be working when they’re sick, and there are plenty of other valid reasons why people are absent from work. But there is a gray area with absenteeism that can arise when a company doesn’t have a working environment that is good for its employees. Take an engaged employee, for example, who is not feeling 100 percent. It’s a Monday morning, they don’t feel great, and they’re slow to get their brain in gear. But they’re committed to their job and instead of going to the office, they stay at home and get what they can done. Compare this with the miserable employee working in a toxic environment, with a bully for a boss. They’re also not feeling 100 percent, so they call in sick.

For employers, it can be hard to tell if their employees are sick, or just sick of their job. This is why it’s important to take a closer look at the organization’s absence rate, absence frequency and duration. How often, on average, do people call in sick, and for how long? And from there you can drill deeper and ask more questions. If the absenteeism is high, or has been increasing, it could be down to a poor culture. Are there pockets of high absenteeism? Are particular teams affected? Or is it all down to one line manager? How does the absenteeism compare with the results of your last employee engagement survey?

These are just some of the questions a company that can be asked in assessing how well you’re doing. This is especially important in a tight labor market when it is even more crucial to keep the talent you already have.