2004 Shift Workers Absenteeism Cost Employers $111 Billion

January 7, 2005 (PLANSPONSOR.com) - Employee absenteeism among shift workers cost employers $111 billion this year, up more than $25 billion over last year's totals.

Circadian Technologies Inc. has found in a report that the rate of absenteeism for those who work nights or twelve-hour shifts rose 12.4% in 2004, up significantly from 2003s 5.8% increase.

Alex Kerin, coauthor of the report, said a growing demand for goods and services caused employees to work longer hours, and that, in turn, resulted in higher absenteeism rates, according to the Boston Globe. Instead of hiring new workers, most firms are offering current employees additional hours, according to Kerin.

“Last year, when the country emerged from the recession, demand was up, but there was still pressure to keep headcounts down,” Kerin told the Globe. “Productivity was also up. That meant that for every hour, people worked harder, and they worked more hours.”

Turnover in extended hours operation is usually nearly 10% per year, according to an executive summary of the report, which is well above the US average of 3.2%. This rate was unchanged from last year. The cost of turnover per employee was $30,000 in 2004 however, up significantly from $25,550 in 2003.

Regarding fatigue of extended hour’s workers, last year, 50% of employers cited such a problem. This year, the figure was 61%. Compensation is often higher in companies were fatigue is greater however, according to the report. 2004s overtime rate was 16.2%, up from the previous year’s 12%, according to the report. The average hourly wage increased by 77 cents (4%) for extended hours employees in 2004 however, bringing the average compensation level to $19.16.

The study asserts that employers spent an average of $8,035 for every absent shift worker last year, compared to only $1,108 for daytime employees. Shift workers earn an average of $400 more per year than regular employees.

In its study, Circadian found that emergency service workers had the highest rates of absenteeism in 2004. The average rate for those employees was 15%, just ahead of health care workers. With a 5% absenteeism level, retail workers had the lowest rates. Absenteeism rates for transportation workers working late-night shifts was 12% in 2004, almost six times the level for other workers.

The report was based on a nationwide survey of 440 managers and 149,000 full- and part-time shift workers.

To order a complete copy of the survey, please see http://www.circadian.com/publications/swp2005.html. An executive summary, is at http://www.circadian.com/publications/SWP2005.pdf .