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Employee Absenteeism in the Workplace

Americans miss work every single day because of stress. And it costs businesses millions of dollars every year in lost productivity. So it makes sense that you want to reduce absences.

Here’s the tricky part: Most absences are completely unavoidable.

The truth is, you can’t get rid of them for good. But if you learn why your employees are calling in every week and take steps to address their needs, you can reduce the number of absences. Sound good? Let’s dig into how you can take charge of absenteeism.

What Is Employee Absenteeism?

Inconvenient absences are incredibly frustrating, but not every absence qualifies as employee absenteeism.

Absenteeism is when an employee is constantly absent from work. It’s when an employee habitually shows up late, calls in sick an hour before their shift, or just doesn't show up to work at all. Even though you might be able to adjust on the fly when this kind of stuff happens, it really drags down company productivity and morale.

On the flip side, employee absenteeism is not an employee taking a sick day or scheduling PTO ahead of time. Think of absenteeism as the attitude behind the behavior. The why. Employees utilizing their employee benefits is not absenteeism.

So, what causes an employee to miss work to the point that it becomes absenteeism?  

Why Do Employees Miss Work?

Employees are people and their lives are messy. That goes for the leaders in the boardroom as well as the folks on the front lines of customer service. So the root causes of employee absenteeism are really no mystery. Illness, mental health, personal reasons and a lack of job satisfaction are why employees most often miss work.


As you would expect, illness and health-related issues often lead to unplanned absences. We learned that in kindergarten, right? Just like when kids would catch the latest stomach bug going around at school, it’s inevitable that employees are going to get sick and miss work.

But here’s the thing: When an employee doesn’t feel well, they should miss work. You don’t want sick employees to come to the office or log on to their computers. Health should always be a priority.

And absences aren’t always for the employee’s health. Since 2020, caretakers and parents have been missing work at higher rates to tend to their children and loved ones when they’re sick.1

Mental Health

More companies are paying attention to their employees’ mental health—and for good reason. The SmartDollar 2022 Employee Benefits Study shows that nearly half of employees said their mental health impacted their ability to do their best work in the last year.

And Gallup shares that those who rated their mental health as fair or poor unexpectedly missed work four times more often than employees who rate their mental health as good, very good or excellent.2

Personal Reasons

Let's not overlook another major cause of employee absenteeism—personal reasons. Personal reasons can be anything from relationship issues and outside appointments to money problems and everything in between.

According to the American Psychological Association, money is a source of stress for 66% of Americans.3 Out of those people, 55% said money stress affects their relationships. If your employees are worried about their finances and relationships, they can’t focus on their job.

The 2022 SmartDollar Employee Benefits Study shows that money plays a major role in absenteeism:

  • 47% of employees said their personal finances cause them to lose sleep.
  • 55% of employees worry about their personal finances daily.
  • 45% of employees have been distracted by financial problems while at work.

If employees are losing sleep and are distracted at work because of their money problems, they’re going to check out and be absent. It’s a vicious cycle that consumes your employees and hurts your business.

Lack of Job Satisfaction

When employees are disengaged, overwhelmed or burned out at work, they don’t show up. That’s way different than no wanting to get out of bed simply because they didn’t sleep well. They’re not just tired. They’re fed up with their job–and that means they dread going to work because they hate it there and they want something different.


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Understanding why your employees miss work helps you better serve their needs. And the best way to find out what’s going on in your employees’ lives is to sit and talk with them, kneecap to kneecap. You can’t offer them the best solutions if you don’t know their real problems.

Is Employee Absenteeism Hurting Your Business?

Absenteeism is absolutely hurting your business. It kills your bottom line with high general costs, health-related costs and lost productivity. Here’s how it breaks down for your business:


cost of employee absenteeism table

4Circadian, 2016
5Integrated Benefits Institute, 2019
6,7SHRM, 2014

Wow—that's a lot of info to process. Bottom line: Absenteeism is a serious issue. And helping people is a lot more challenging than reading an article about it. Now that we've talked through the problem, let's talk about solutions.

3 Ways to Fix Employee Absenteeism in the Workplace

Like we talked about, employees often have legitimate reasons for missing work unexpectedly. But as an employer, you need to stand firm and correct habitual absenteeism before it hurts your business permanently.

You can proactively fix absenteeism in three simple ways:

1. Promote benefits employees care about.

Building a healthy work environment is the first step toward fixing absenteeism. And you can begin by offering benefits employees care about. Providing resources for physical and mental well-being (like a counseling or fitness reimbursement) puts your money where your mouth is.

When employees work for a company that really cares about the benefits they offer, they’re more likely to stay. Not only that, but the company as a whole will benefit because you’ll have a healthier workforce with improved productivity and morale.8

You can help your employees prioritize their health by adding more sick days or offering more flexible scheduling so they can adjust on the fly.

2. Help employees take control of their money.

The 2022 SmartDollar Employee Benefits Study shows some shocking statistics about employee money problems:

  • Over one-third of employees have missed work due to a financial problem.
  • Nearly one-fourth of employees are facing a financial crisis.

What if you could offer a benefit that helps your employees with their money? Offering a financial wellness benefit, like SmartDollar, teaches employees how to pay off debt, budget and build wealth for the future.

Employees’ money problems are keeping them from bringing their best selves to work. But a financial wellness benefit can teach them how to change their attitude and behavior surrounding money.

When employees feel better about their finances, they’re more focused and likely to be more productive at work!

3. Improve employee morale and engagement.

How your employees feel about being at their job has a lot to do with them showing up. High employee engagement cuts absenteeism by 81%.9  

The more engaged an employee is at work, the better their morale will be, and you’ll have fewer absences. But you can't just wish for morale and engagement to improve. You have to do something about it.

We recommend starting with these four things:

  1. Listen to your employees. Find out what’s bothering them and what they enjoy about their job. Conduct surveys and interviews to get feedback on how to improve things.
  2. Think outside the box. When it comes to showing your employees you care, get creative and use the feedback you get to adjust and try new things.
  3. Show that you care about your employees. Provide them with opportunities for professional growth and development.
  4. Offer benefits that your employees care about. Even though we’ve already talked about it, it’s worth repeating again—the right benefits for your employees will improve morale and engagement.

These recommendations might require you to make some pretty big changes in your workplace. Don’t overwhelm yourself. Start with one thing at a time and take baby steps. As a leader, build momentum and get your employees on board.

How Do Leadership Styles Affect Employee Absenteeism?

Business leadership is the ability to influence and maximize the talents, passions and skills of employees to achieve a goal. Leaders influence their team members and maximize their impact on the company—both good and bad.

Your leadership styles directly impact your employees’ absenteeism. Think about it. Have you ever had a boss that made you hate work? Did you dread showing up and call out sick at the last minute? Were you in constant fear of being fired because they threatened you with it all the time? What a horrible way to work!

Don’t overlook leadership styles when you’re analyzing your company’s absenteeism. Here’s how three of the most common leadership styles affect employee absenteeism:

Style 1: Transactional Leadership

Sometimes called managerial leadership, transactional leadership is all about order. A transactional leader functions with rewards and punishments, which takes a toll on the team because they feel the pressure to perform. That pressure can cause stress that leads to absenteeism.

Style 2: Transformational Leadership

A transformational leader is someone who’s built trust and respect with their team—and because of that, they can influence their team to work harder and think smarter to achieve a common goal. Transformational leaders encourage their team to overcome challenges from absenteeism. But by helping others achieve more, a transformational leader can experience burnout and be absent themselves.

Style 3: Servant Leadership

Servant leaders prioritize empowering and growing their team. They focus on what they can do for others instead of what others can do for them. Servant leaders minimize absenteeism because they spend the necessary time to get to know their employees and empower them at work.

The challenging thing about leadership styles is finding the right type of leadership for your business, employees and goals. But with the right leadership style, you’ll decrease absenteeism, improve engagement, and increase productivity.

How Will You Address Employee Absenteeism in Your Workplace?

Employee absenteeism is holding your business back from ultimate productivity and efficiency. But the uphill climb to reducing absenteeism doesn't have to feel impossible. With the right policies, tools and conversations, you can boost employee productivity and give absenteeism the boot.

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Ramsey Solutions

About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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