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Missing Persons

When employees call in sick, it's your business that suffers.

I'm not feeling so good," your employee croaks over the phone, just a little too hoarsely. Most employers discount sick calls, whether real or fake, as just one of those things. However, recent statistics show unscheduled absences have lingering effects, especially on small businesses.

A rise in employee absenteeism is coming on like a bad flu, and small businesses are feeling the symptoms. Companies with fewer than 100 employees suffered from an 18 percent increase in absenteeism this year over last year, according to a survey by CCH Inc., a business materials publisher. This increase was far more substantial than the average 3.5 percent increase experienced by businesses in general.

Unfortunately, though small businesses may be the most affected by absenteeism, they're also usually least likely to do something about it. "Most companies are beginning to understand that unscheduled absences and sick leaves pose a significant cost," says Paul Gibson, an attorney with CCH. "However, a lot of smaller companies can't focus full time on implementing programs to get the situation under control."

According to the survey, the maximum annual cost of absenteeism per employee for companies with fewer than 100 workers shot up like a fever, from $267 per person in 1994 to $622 in 1995. Though this marked the highest rate of increase among businesses of all sizes, small companies reported feeling the pain less in obvious dollar figures and more in indirect costs. "They know it's happening," says Gibson. "They just can't measure it."

Still, those indirect costs are nothing to sneeze at. According to the survey, the greatest casualty of unscheduled absenteeism is productivity, followed by customer service, employee morale and ability to meet deadlines.

Besides indulging in mental health days, more employees are requesting days off just to run errands. According to Gibson, personal illness accounted for only 45 percent of total absenteeism, while dealing with family issues accounted for 27 percent of unscheduled time off. Thirteen percent of businesses surveyed said their employees used sick days to take care of personal needs, while 6 percent said employees were not so much sick as they were sick and tired-they needed the break to escape stress.

"In a work/family context, people just need more time to manage their obligations outside of work," Gibson says.

The prescription? Gibson recommends small businesses adopt the principles of the increasingly popular "paid leave bank program," which allots employees a group of days for vacation, sick or personal leave. That way, employees don't have to fake illness to get a day off-and you get advance notice so you can plan around absences and staff more effectively. "The best thing small companies can do is give people the opportunity to manage their time off as they see fit," says Gibson, "and not force them to classify themselves as sick according to some company policy."

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This article was originally published in the January 1996 print edition of Entrepreneur with the headline: Missing Persons.

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