Increase Attendance and Decrease Labor Costs

A day off as an incentive for perfect attendance?
Some inexperienced managers award a day off to employees with perfect attendance for a one year period. This is rather like giving a pack of cigarettes to someone as a reward for quitting smoking. The cost of a day off is much higher than one would believe at first glance. Consider a conservative figure of $15/hr for an employee wage and then include an additional $5/hr for benefits and overhead which yields an hourly cost of $20. The cost of a day off is roughly $160 or higher. If you have 200 employees with perfect attendance the cost is an unexpected $32,000 per year. This does not even take into account the lost productivity of the coworkers of the employee who has the day off.

Why do an incentive program?
An incentive program can be effective at a far lesser cost than a day off because it derives it's effectiveness from the interest and excitement it creates not just from the dollars it awards. Think of the lottery.  The chance to win something big is almost irresistible to many people.  A successful incentive program can offer the chance to win something big with the certainty of winning something of value. This combination grabs employees' attention and gets them focused on the desired behavior. 

Reward and recognition are key factors in generating a high level of excitement for a successful program. An incentive award program offering merchandise rewards such as CD Players, Television Sets and Golf Clubs will generate employee interest and motivation. At the beginning of the program incentive award catalogs are distributed to all participants. When the employee takes the catalog home, winning becomes a family goal. Family evolvement then becomes an additional motivating factor.

Then add the factor of recognition.  At the end of the year all employees can be awarded a tee shirt, jacket or some other visible evidence of their accomplishment.  This helps the employee feel appreciated and gives them the opportunity to share their accomplishment with their coworkers.  One cannot overestimate the importance of instilling the sense of appreciation.  Many employees stay at a lower paying job than they otherwise might have because they do feel appreciated.

How much should a firm invest in an attendance program? 
The first step is to calculate the current cost of absenteeism.  A simple formula is: <average missed days per employee> X <number of employees> X <average salary + overhead per employee> = Total Cost of Absenteeism.  This of course does not include all the intangible costs of missed days such as decreased productivity of coworkers who inefficiently fulfill the function of the absent employee. 

In the example above, if the workforce of 200 employees misses an average of 3 days each per year the cost per annum is $96,000.  If only half of those employees achieve perfect attendance the annual savings is a whopping $48,000.  Often firms enjoy collateral benefits of increased quality and productivity as well.  Once the potential savings is estimated an intelligent decision can be reached as far as the expenditure to achieve the goal.  A typical budget for an attendance program might be 25% of the estimated savings.  See the strategies that other firms are using to increase attendance.

For additional information on wellness programs, contact us via email or call 1-440-234-9080. Start increasing attendance today!