Minimizing the Impact of Employee Absenteeism a SMALL BUSINESS GUIDE Minimizing the Impact of Employee Absenteeism a SMALL BUSINESS GUIDE 3 Executive Summary

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minimizing the impact of employee absenteeism A SMALL BUSINESS GUIDE minimizing the impact of employee absenteeism A SMALL BUSINESS GUIDE 3 executive summary

MANAGING AND MINIMIZING EMPLOYEE ABSENTEEISM Absenteeism is a costly problem for employers on many levels. It increases labor costs, reduces productivity and even threatens the morale of employees who must pick up the slack for absent co-workers. Although small business owners and managers recognize these problems, they often lack adequate tools to reduce absenteeism and to manage it more effectively. To address it appropriately, it is important to recognize that absenteeism is not a root problem but rather a symptom of a variety of other issues. In addition, much of the conventional wisdom surrounding absenteeism is based on misconceptions. By identifying the root causes and dispelling the myths, you will be better able to Absenteeism is not a root manage this critical workplace issue. Furthermore, understanding and analyzing the costs and causes of absenteeism will enable you to devise strategies and problem but a symptom of practices speciﬁcally for your business’s unique challenges. a variety of other issues.

HIGH COST OF ABSENTEEISM Absenteeism affects every employer in every industry. According to the Bureau of Labor Statistics, average absenteeism rates range from just over 1% to nearly 4%, depending on the occupation and industry.

An absenteeism study conducted at General Motors illustrated just how expensive the problem can be. The GM study found the company’s absenteeism rate to be 5%, resulting in 25,000 employees being absent each day. Over the course of a year, the company lost 50 million man-hours to absenteeism at a total cost of $1 billion.

Although the numbers are certainly on a different order of magnitude at a small business, the impact can actually be even more dramatic. Most small businesses lack the ability to absorb an absent employee’s duties. In a small business, the absence of a key employee can signiﬁcantly impact the company’s relationship with an important customer or its ability to efﬁciently conduct certain operations.

Negative Impacts of Abenteeism

labor customers operations employees

Cost of overtime for Reduced responsiveness Disruptions when Potential morale covering workers and/or when a key contact employees with specialized issues if employees hiring additional staff or or service employee is knowledge or skills are are continually asked temp workers. unavailable. absent. to cover for missing co-workers.

GEVITY INSTITUTE EFFECTIVE STRATEGIES AND PRACTICES While absenteeism can be detrimental to your business, there are measures you can take to reduce its impact. These include:

• Develop clear absenteeism policies.

• Incorporate planned absenteeism into planning and scheduling.

• Create paid time off (PTO) banks.

• Offer comp time.

• Address job satisfaction issues.

• Communicate more effectively with employees.

• Address employee health and safety issues.

• Place emphasis on proper employee ﬁt.

• Provide employees with an appropriate amount of ﬂexibility.

• Offer attendance bonuses.

A SOLUTION FOR YOUR BUSINESS As with most employee management issues, an effective strategy to promote better attendance and manage the impact of absenteeism begins with an understanding of the challenges and capabilities of your particular organization. Only after identifying the root causes of your absenteeism issues should you implement the specific tools that address those causes. There is one fact that is the same for every company: Reducing absenteeism and managing it more effectively can have a significant positive impact on your costs and, potentially, customer satisfaction and employee morale. This adds up to improved financial performance.

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GEVITY INSTITUTE minimizing the impact of employee absenteeism A SMALL BUSINESS GUIDE 5 protecting your business from the high cost of absenteeism

Absenteeism is a prime example of the challenges that a small business owner must handle effectively to have a well- balanced employee management strategy. On the one hand, you want to provide employees with adequate time off and recognize that a certain level of absenteeism is unavoidable. On the other hand, you want to reduce unexpected absenteeism, minimize costs and manage your staff so that absences do not disrupt operations. It can be a difﬁcult balance, but there are tools that can address the root causes of unplanned absenteeism and management strategies that can help you plan ahead to minimize negative impacts from absent employees.

There are tools that can address TYPES OF ABSENTEEISM A common misconception is that absenteeism is a single problem. In reality, unplanned absenteeism and it is a variety of issues that are combined under a single name. For example, an employee absence might be the result of sick leave, leave pursuant to management strategies that the Family Medical Leave Act, paid time off, vacation or personal leave. Or it could be that a disgruntled or indifferent employee has called in sick without can help you plan ahead to a legitimate reason for being absent. Identifying and categorizing the types minimize negative impacts. of absenteeism being experienced by your company will help you determine the most effective approaches for addressing it.

Planned versus unplanned Unplanned absenteeism is tougher to manage than planned absenteeism. Unplanned absenteeism may lead to greater downtime, lost productivity and other problems. Plus, unplanned absenteeism creates greater costs than planned absenteeism.

Planned absenteeism is scheduled in advance and includes employee time off for vacations, holidays, doctor appointments, family medical leave and other authorized reasons. While this form of absenteeism is not usually indicative of any organizational dysfunction, if not properly managed and scheduled it can lead to severe workplace disruption. In addition, changes in the usage of planned absenteeism may be an indicator of deeper organizational problems.

Unplanned absenteeism is any absence that was not previously scheduled or was taken without formal notice. This type is much more difﬁcult to manage and can pose a daunting challenge. Keep in mind, however, that not all unplanned absenteeism is indicative of a dysfunction organization.

Legitimate versus illegitimate If the majority of absenteeism in your organization is legitimate — or based on real and recognized needs — this is an indicator of stable and even healthy employee relations. On the other hand, a high incidence of illegitimate absences—those occurring for reasons that are not covered under your organizational policies — may indicate deeper-rooted organizational problems and unstable or possibly unhealthy employee relations.

Legitimate absenteeism. There are legitimate reasons, both planned and unplanned, that people have to be absent from work. Illnesses, life events and vacations are just a few examples. Although you strive to manage these occurrences, they cannot be eliminated, nor should they be. At the same time, there is a cost associated with legitimate absences, and that cost should be effectively managed, as should any other cost of doing business.

GEVITY INSTITUTE Illegitimate absenteeism. These are absences from work without good Management Tip — While it is reason. Like legitimate absences, they can be planned or unplanned. All important to understand general managers have struggled with the difficulty of distinguishing legitimate absenteeism patterns, don’t lose from illegitimate absences. One of the benefits of an effective approach sight of the need to monitor and to absenteeism is that you will be better able to limit this form of address the absences of specific individual employees. absenteeism and save yourself some of the headaches that come with it.

Categorizing absenteeism When assessing absenteeism, it is helpful to categorize absences into four areas to determine general patterns within your company. This will help you determine which types of absenteeism are generating the highest costs and provide insight into the most appropriate approaches for reducing those costs and improving employee relations.

legitimate illegitimate

Highly Positive for the Some Problems for the Company Company planned • Lower cost to organization • Lower cost to organization • Stable employee relations • Unstable employee relations

Some Problems for the Highly Negative for the Company Company unplanned • Higher cost to organization • Higher cost to organization • Stable employee relations • Unstable employee relations

Planned and legitimate absenteeism. If a majority of absences fall into this category, it indicates relatively low costs associated with absenteeism and an organization that is functioning appropriately, at least based on employee absence patterns.

Planned and illegitimate absenteeism. When most absenteeism is planned but there is signiﬁcant illegitimate absenteeism (unnecessary use of the Family Medical Leave Act, for example), costs can be managed, but the illegitimate nature of the absences may point to other issues, such as employee dissatisfaction.

Mental Vacations — Be alert to the Unplanned and legitimate absenteeism. The legitimate nature of fact that absenteeism, particularly the absences indicates stable employee relations, but unplanned when caused by unhealthy or unstable absenteeism creates difﬁculties in coordinating and scheduling employee relations, may also take the absences and coverage. Addressing issues such as employee health form of psychological absenteeism. For and safety may reduce this type of absenteeism. instance, employees may wander from their work, spend time working on other Unplanned and illegitimate absenteeism. This is the most detrimental matters, surf the Internet, or even work form of absenteeism. It comes at a high cost, is difﬁcult to manage, on their résumés when they are on the and is indicative of broader organizational issues and problems. clock. This form of absenteeism can be Nevertheless, this type of absenteeism can be overcome by just as damaging to organizations as any implementing appropriate employee management strategies type of physical absenteeism. and practices.

GEVITY INSTITUTE minimizing the impact of employee absenteeism A SMALL BUSINESS GUIDE 7

COSTS OF ABSENTEEISM Recognizing the costs associated with absenteeism is an important step in the process of dealing with this issue in your organization. While all forms of absenteeism have costs, the toughest to manage are those associated with unplanned absenteeism. According to a recent survey by CCH, Inc., the cost of a single unplanned absence for a small employer ranges from $400 to $700.1 These costs are both direct and indirect. They include:

• Beneﬁts that you are paying for the absent employee.

• Salary paid to the employee during time away from work.

• Overtime paid to employees covering for the absent person.

• Time to reschedule or rearrange work.

• Lost productivity due to a less experienced ﬁll-in employee.

• Cost of temporary workers.

• Cost of overstafﬁng to cover for absenteeism.

One way of organizing these costs is to distinguish between those that are related to productivity, ﬁnances and administration, as presented by the Society for Human Resource Management in its learning system on employee and labor relations.2

decrease in productivity ﬁnancial costs administrative costs

• Employees must take on additional • Overtime payment • Stafﬁng time to ﬁnd work replacement workers

• Employees must train new or • Beneﬁts and replacement • Management time to reassign replacement workers worker wages staff

• Staff morale and customer service • Insurance and beneﬁts paid • Staff time necessary to monitor may suffer for absent employees absenteeism

Certain types of unplanned absenteeism may result in additional Management Tip — Here’s a simple costs. For example, a work-related injury may lead to additional costs formula for calculating your rate of for medical treatment and workers’ compensation costs. absenteeism per month:

Study result Worker days lost Absenteeism costs affect every type of employer in every industry. X Days in month Avg. # employees According to the Bureau of Labor Statistics’ most recent surveys

GEVITY INSTITUTE on absenteeism, absence rates of full-time salaried and wage workers varied from 1.7% in agriculture to 3.9% in education and health services. Even managerial employees had a rate of nearly 3%, and salespeople had a rate closer to 4%.3 These absenteeism rates included time off from work for reasons such as illness, familial leave, civic duty, jury duty and maternity, but they did not include absences such as vacation time.

Impact examples Unplanned absenteeism is particularly costly in that it often leads to scrambling to ﬁll in for the absent employee. The time managers spend rearranging schedules is time that cannot be used to take care of other productive tasks. Often, this disrupts employees as well as managers. For example, if a key employee on an assembly line unexpectedly fails to show up for work, it may lead to downtime for the entire line. Unexpected absences also are a leading cause of overtime. Not only does this force you to pay time and a half, but it may also lead to morale and job satisfaction problems due to increased workload.

Planned absenteeism also has costs that should not be ignored. For example, in one manufacturing plant, vacation time accounted for an absenteeism rate of 6%. For this company of 1,500 employees, that rate equated to 68 extra employees per year.4

CAUSES OF ABSENTEEISM Chronic and excessive absenteeism does not appear out of thin air. It is almost always the result of persistent, deep- rooted causes within the organization and its employee management practices. Viewing absenteeism as a symptom of deeper problems will help you address those underlying issues. Before developing a strategy for managing employee attendance, it is necessary to understand the seven primary causes of absenteeism. These causes focus primarily on illegitimate absenteeism.

1. Job satisfaction and attitudinal factors One of the most common causes of illegitimate absenteeism is a low level of job satisfaction. Employees who are dissatisﬁed with aspects of their work may seek ways to alleviate their discontent. One of the methods of doing so is withdrawing from work mentally or ﬁnding ways to avoid being at work altogether. While employee dissatisfaction can stem from a number of factors, in the context of absenteeism, it is important to pay close attention to certain factors, including:

Type of work. Sometimes the very nature of speciﬁc jobs can create employee dissatisfaction and an incentive to withdraw from work. Jobs that are either extremely demanding or, at the other extreme, lack interest and variation may, at times, cause absenteeism (either physical or psychological). In many cases you are limited in the manner in which you can design work in your organization. However, it is important to recognize that the When employees are provided with manner in which work is organized has implications for your ability to manage employee attendance. a mechanism to voice concerns,

Poor employee relations. There is a consistent association between there is a reduced tendency for organizations with poor employee relations and a high level of absenteeism. withdrawal—physically and

Poor working relations between co-workers. Workers who experience mentally. harassment, bullying or simply poor interpersonal relations with fellow employees are more likely to avoid work.

GEVITY INSTITUTE minimizing the impact of employee absenteeism A SMALL BUSINESS GUIDE 9

2. Absence of appropriate channels for employees to express concerns Research has shown that when employees are provided with a mechanism to voice concerns, there is a reduced tendency for withdrawal. Most organizations have some formal mechanism for eliciting employee input. A high level of absenteeism may indicate that these formal channels are not fully serving their purpose.

3. Organizational absenteeism policies There are also organizational causes for excessive unplanned absenteeism, whether or not it is legitimate. One of the primary causes is a poor absenteeism policy. An unclear policy can leave a great deal of room for interpretation and may explain a situation in which management is constantly caught off guard by stafﬁng problems. Careful development of absenteeism procedures is an important step in the effort to control the costs of unplanned absenteeism.

4. Problems with health and safety A high level of legitimate absenteeism may indicate a problem with a company’s adherence to safety and health requirements, in that work conditions are producing injuries and illnesses.

5. Lack of employee fit: hiring and training practices Employee fit with the organization is an important predictor of attendance levels. Where there is a poor fit between a given employee or group of employees and their positions or the company itself, absenteeism will likely be higher. This lack of fit can stem from ineffective selection and hiring processes or result from a lack of appropriate training.

6. Low wages Low wage jobs have much higher rates of absenteeism, since the cost incurred by an employee for missing work is minimal. In addition, employees earning close to minimum wage may be less concerned with the potential repercussion associated with absenteeism. Some employers in low wage sectors take high rates absenteeism and turnover as a fact of life. However, even in these sectors, there are ways absenteeism can be managed.

7. Personal and family-related issues and responsibilities High levels of individual absenteeism can arise even in the best workplaces, and sometimes this is the result of personal or family-related issues. Trouble at home plays a signiﬁcant role in employee attendance patterns. While there may be little you can do about such issues, recognizing them can strengthen your organization. By realizing that an attendance problem is the result of external problems and not a lack of commitment to the company, you may be able to retain a valuable employee who might have otherwise been terminated.

DEVELOPING EFFECTIVE ATTENDANCE STRATEGIES Absenteeism and its associated costs cannot be eliminated, but they can be managed and reduced. With an understanding of the forms of absenteeism in your company, you can better plan for legitimate absences and choose the most cost efﬁcient options to cover for such absences. You can also take steps to eliminate a great deal of illegitimate absenteeism, and even some of the legitimate absences may be eliminated.

How to manage absenteeism Plan for a certain level of legitimate absenteeism. Much absenteeism is simply a legitimate cost of doing business. While these legitimate absences are less problematic than other forms of absences, if not properly managed they can be unnecessarily costly. It is important to be realistic in estimating this level of absenteeism so the plans you put in place to handle it are adequate.

GEVITY INSTITUTE Overstaffing. In many instances, overstaffing may be preferable to paying overtime. Say, for example, the average tenure of your workforce is 20 years and you offer three to four weeks of vacation for employees who reach this threshold. At a minimum, you should plan for 15 to 20 days (120- to 160-man hours) of absences per employee. Covering for these hours with overtime, if you pay $10 per hour, would cost $30,000 per 2,000 hours. On the other hand, one additional employee for every 12 to 15 employees with 20 years of service would also make up for the vacation hours. The additional employee would cost your company $20,000, plus benefits. Therefore, it may be more cost efficient to hire an additional employee (or overstaff) for every 2,000 hours (more or less) of planned absenteeism.

Cross-training. Cross-training employees to perform different jobs will enable them to ﬁll in for absent employees and help avoid lost productivity. Many companies implement programs rewarding employees for learning different skills. Often these programs are put into place speciﬁcally to deal with absences.

Clear procedures for scheduling time off. Allowing employees to schedule time off when it is convenient for them would be ideal. But it’s simply not practical. Your time off policies should be structured to ensure you never have too many employees taking vacation at the same time and that employees within the same job category—or those with the ability to work the same job—are not out at the same time.

Paid time off (PTO) banks. A typical PTO bank lumps all time off into the same category. Vacation days, personal days and sick days are generally included. Employees then schedule PTO as far in advance as possible. Any PTO not used can be converted to pay or carried over into future years to “bank” for future absence, such as leave under the Family and Medical Leave Act. Not only does this eliminate last-minute call-ins by employees using sick days for personal time, but it also may reduce overall absenteeism, as many employees will choose to take the pay or bank the time rather than take the time off. This also will reduce the incentive to use up sick days that are typically offered in a use- them-or-lose-them arrangement.

Flexible work arrangements. Recently, a growing number of employers have implemented flexible work arrangements, such as flex-time, job sharing and Management Tip — One way telecommuting. Flex-time requires employees to work a certain number of to manage time off scheduling hours per week, but allows them to vary their starting and ending time. For is to allow vacation time to be example, some employees may work four 10-hour days each week while selected based on seniority. others work a traditional five-day week. Job sharing entails having two or Another method is a lottery more employees share a traditional one-person full-time job. Telecommuting drawing (perhaps based on the allows employees to work from home either full-time or on certain days of prior year’s attendance). Several the week. The amount of flexibility you provide will depend on the nature of scheduling programs can assist your business. If flexibility is right for you, providing this option will reduce in setting up such a system. employees’ need to miss work.

How to reduce absenteeism Reducing absenteeism or even changing the nature of the type of absenteeism requires an understanding of what is driving your speciﬁc attendance challenges. As previously noted, addressing the root of the cause is the most effective way of dealing with absenteeism. Once you have categorized the types of absenteeism you face, you can increase attendance by dealing with the underlying problems directly. Some speciﬁc causes of absenteeism and ideas for combatting them include:

GEVITY INSTITUTE minimizing the impact of employee absenteeism A SMALL BUSINESS GUIDE 11

Job dissatisfaction. Conduct job satisfaction/attitude surveys, because recognizing the problem is the ﬁrst step to solving it. To address workplace satisfaction issues, Flexibility options can you should: reduce employees’ need • Ensure working conditions are safe, clean and tolerable. to miss work. • Establish policies that are reasonable.

• Provide supervisor training in employee relations. (One of the most problematic sources of absenteeism can be a poor or overly adversarial supervisor.)

• Take steps to ensure good relationships between co-workers by establishing harassment and bullying prevention policies.

• Attempt to make jobs as interesting and varied as possible.

• Recognize when you are demanding too much from any one position.

• Recognize and reward employees equitably.

Absence of appropriate channels for employees to express concerns. If you identify this as a source of absenteeism, consider implementing mechanisms and procedures for employees to raise their concerns. This could range from a simple open-door policy all the way to a comprehensive grievance or peer review system.

Organizational absenteeism policy. Make sure your policy is clear and concise regarding acceptable absenteeism and the repercussions for failure to adhere to the policy. A clear policy can reduce absenteeism that stems from misunderstandings and varied interpretations. Examples of absenteeism policies can be found at: www.humanresources.about.com www.shrm.org/hrtools/policies_published/ www.employmentlawadvisors.com/resources/policies/attendance.html

TWO PROVEN ATTENDANCE MOTIVATORS Attendance bonuses could include quarterly or yearly bonuses for perfect attendance or a certain level of improvement. They could be company-wide bonuses or individual. You could also have weekly mini-bonuses, such as a free lunch for the employee group with the best attendance.

Periodic reviews include attendance as part of your performance management appraisals. Make sure you communicate speciﬁcally how employees have or have not met expectations.

GEVITY INSTITUTE Health and safety problems. Workplace safety initiatives, employee assistance programs, and workplace health and ﬁtness initiatives (such as health screenings and ﬁtness club memberships) have all been shown to reduce certain types of absences.

Lack of employee ﬁt. To address ineffective hiring and training practices, make sure your selection techniques identify appropriate candidates both for the job and for the culture of your organization. In addition, as your organization adapts and changes with its environment, make sure employees are trained so that they continue to meet your needs.

Low wages. In addition to being associated with dissatisfaction, low wages also contribute to absenteeism by minimizing the cost to the employee of missing work. While wages are normally set by market forces, it is important to recognize that higher-than-market wages are a potential solution to absenteeism problems. In addition, bonuses and a PTO bank option can have an even greater positive impact on low wage employees.

Personal and family-related issues and responsibilities. People do not work in a vacuum. Work issues cross over to home —and home issues cross over to work—so be sure you are attentive to employees’ individual family needs. Some potential ways to help manage these issues might include ﬂex-time, telecommuting, sick care, day care or employee assistance programs. Not only have these policies been found to reduce family-related absenteeism, but they also have been shown to reduce other forms of absenteeism and increase morale. Moreover, their costs are often much lower than the cost of the absenteeism they eliminate.

conclusion

Absenteeism is a serious and costly concern for small business owners to whom the direct costs of absenteeism alone can be major obstacles to ﬁnancial success. However, through a clear understanding of the speciﬁc types of absenteeism that exist in your organization, you will be able to dramatically reduce these costs.

An effective strategic approach to workplace absenteeism will allow you to manage the costs of unavoidable absences and to limit those absences that can be avoided. By understanding the root causes of absenteeism in your company, planning for unavoidable absenteeism, and taking measures to limit illegitimate and avoidable absenteeism, you can create a competitive advantage.

references

1 CCH, HR Ideas & Trends, “CCH Absenteeism Survey.” [2003]. Current edition available online at www.cch.com. 3 Bureau of Labor Statistics, Monthly Labor Review, “Absence Rates and Occupation, 2004. ”[January 2006] Available online at www.bls.gov/opub/ted/2005/feb/wk2/art01.htm. 4 Lussier, Robert N., Human Relations in Organizations. McGraw-Hill-Irwin, 1999 2 Society for Human Resource Management, “Module Five: Employee and Labor Relations.” The SHRM Learning System. Alexandria, VA: SHRM, 2002.

GEVITY INSTITUTE minimizing the impact of employee absenteeism A SMALL BUSINESS GUIDE 13 appendix

Throughout this paper a wide variety of absenteeism solutions have been presented. Each of these solutions has potential advantages and disadvantages. The ﬁt of any given solution depends on the speciﬁc nature of your business. The following chart summarizes some of these solutions and their pros and cons to help you decide which solutions might be appropriate for you.

absenteeism solution pros cons Overstaffing - Manages absenteeism - Increased payroll costs - Reduces need for overtime - Unintended downtime - Reduces managerial time to find fill-ins - Increases managerial span of control - Increases employer flexibility Cross Training - Manages absenteeism - Training time and expense - Reduces lost productivity when - Difficult to retain all skills employees fill in - May require increased pay - Increases employer flexibility - May lead to increased employee stress - May increase job satisfaction - Increases skill demands on first line supervisors Overtime - Manages absenteeism - Increases payroll costs - Increases employer flexibility - Negative impact on morale - Reduces need for additional employees - Increases stress - Provides additional income - Increases managerial administrative time opportunities for employees Temporary Workers - Manages absenteeism - Can lead to employee conflict - Increases employer flexibility - Higher wage costs - Keeps benefit costs low - Additional managerial skills and duties - Employee morale issues - Increased training time - Lower productivity - Lower commitment Scheduling Plan - Manages absenteeism - May create rigidity - Allows you to plan for absences - Does not reduce overall absenteeism in advance PTO Bank - Manages absenteeism - Potential increased cost of paying for all - May reduce absenteeism days off and for buy back - Leads to greater percentage of planned - PTO may count towards FLSA hours versus unplanned worked for overtime purposes - Increases incentive to attend (if buy - PTO may be considered deferred back unused days) compensation upon termination of - Increases employee morale (indicator employment of trust) - Increased administrative costs Comp Time - Manages absenteeism - Potential FLSA issues - May reduce absenteeism - Administrative costs of scheduling - Increases flexibility and tracking - Increases morale

GEVITY INSTITUTE Flex-time - Reduces absenteeism - Potential communication problems - Increases employee flexibility - Administrative costs of scheduling - Increases employer flexibility and tracking - Increases morale and job satisfaction - Increased stress on supervisors due to longer workdays - Some state legislation requires overtime pay for more than eight hours in one day (rather than on a weekly basis) Job Sharing - Reduces absenteeism - Potential communication problems with - Increases employee flexibility supervisors and job sharers - Increases employer flexibility - Additional supervision stress - Increases morale and satisfaction - Could lead to additional benefit costs - Increased administrative costs Telecommuting - Reduces absenteeism - Occupational Safety and Health Act, - Increases employee and employer Worker’s Comp and FLSA concerns flexibility - Communication Issues - Increases morale - Administrative costs - Supervision stress Absenteeism Policies - May reduce absenteeism - Increases rigidity - Communicates expectations - Potential negative employee reaction - Signals fairness - May reduce employer flexibility - Increased administrative costs of tracking Health and Safety - Reduces need for absenteeism - Financial costs Programs - Reduces health care costs Attendance Bonuses - Reduces absenteeism - Financial costs - Increases morale - Administrative tracking costs - Could create unhealthy employee competition Hiring and Training - Reduces absenteeism - Increased supervisor skills required Practices - Increases job satisfaction - Increased training costs - Increases commitment - Increases productivity Day Care/Sick Care - Reduces need for family-related - Financial costs absences - Increases morale - Increases recruiting ability

GEVITY INSTITUTE THE GEVITY INSTITUTE: ABOUT GEVITY KNOWLEDGE AND APPLICATION Gevity helps clients increase proﬁts, grow sales and The Gevity Institute was established to identify and quantify improve customer satisfaction through our comprehensive the link between people management practices and small- employee management solution. We serve as the and medium-sized business performance. insourced human resource department to small- and medium-sized businesses nationwide. The Institute’s goal is to establish an ongoing stream of information, data and recommendations focused on Our unique approach integrates three key drivers of effective people management for smaller companies. The business success: workforce alignment, administrative relief Institute sponsors research at leading universities and and business protection. We deliver our solution through business organizations. our innovative people, processing and portal approach, combining the resources of our highly skilled human Gevity will apply knowledge gained from Gevity Institute resource consultants and our scalable, Web-enabled research to practical solutions that help small- and medium- technology platform. To learn more, visit our Web site at sized businesses to improve proﬁts, productivity and longevity. gevity.com. To learn more, visit our Web site at gevityinstitute.com.

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