Finding the best absence rate formula for your small business

How can absence formulas help a small business track absenteeism? HR consultant Lyndsey McLaughlin explains the benefits of measuring absence and some of the formulas available for businesses.

Many challenges are associated with running a business, and absenteeism can significantly impact business owners. Absences are inevitable in any business, but they become problematic if they are a regular occurrence. You can use an absence rate formula to help you deal with any absence issues within your company.

It would be impossible to eradicate employee absenteeism, as there are many reasons why an employee may be off work. They may be absent from work due to sickness, a bereavement, maternity or paternity leave, jury duty, to attend appointments, or it could be completely unexpected, such as severe weather conditions or even a pandemic!

How does absence impact small businesses?

How does absence impact small businesses

Sickness absence has been falling since the last decade for age groups 16 to 64 but increasing for age 65 and over. The decline in sickness absence could be down to various factors, but most significantly, it may result from increased flexible working options.

There are several ways that absence can impact a small business. When employees are absent and their work needs to be covered by temporary workers, it creates additional costs for the company. In addition to this, it can cause projects to be late or even to fail, which could damage the business's reputation or even cause a company to lose clients.

Employee absenteeism can also lead to discontentment within the workplace if others must pick up the slack. They can become stressed and even resentful towards their co-workers. Large organisations are in a better position to absorb these issues without it causing much disruption. However, for a small business, it is not quite as easy!

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Why you should measure absences

You should not just ignore employee absenteeism, especially when your business is growing. If you measure employee absences using an absence formula, you may be able to uncover issues within your organisation, that you can improve on. Quite simply, it is a formula for calculating sickness absence. When you track employee absences, you can highlight problems and make changes that might otherwise be detrimental to your business. For example:

  • If you track absence, you might find that an employee is absent regularly, and it may be that they have an illness and need some additional support, such as reasonable adjustments.
  • High absence could be caused by a hostile working environment and, in some cases, even bullying within the workplace.
  • The employee might be taking days off as they are suffering from poor mental health, and you might be able to offer alternatives, such as working from home more regularly.
  • Employees may be struggling with their work and might need some extra training.

As a small business, it is vital to have the right employees to allow you to grow and prosper. However, it might simply be the case that an employee is just ''pulling a sickie'' or burning the candle at both ends, in which case, you may need to take them through a disciplinary procedure.

Absence formulas – what are they, and how can you use them?

Absence formulas

As the name would suggest, absence formulas are simply formulas you can use to understand your absence rate. With this information, you can then reach conclusions and make changes to your business to help improve your absence rates. These are some formulas you might want to consider.

1. The Bradford Factor

If you want to drill down on specific employees, particularly if you notice there have been many short spells of absence, the Bradford Factor is a good formula to utilise.

  • The formula is S (number of spells in 52 weeks) x S x D (days of absence in 52 weeks)
  • For example: Sally has had 10 absences in 52 weeks; this has amounted to 20 days; the formula would be 10 x 10 x 20 = 2,000

You can use this formula to compare absenteeism throughout the company. Consequently, you will be able to identify any employees with higher absenteeism than others, and therefore, make changes to support your employees.

Learn more: How to best utilise the Bradford Factor in your small business

2. Lost time rate

Another absence formula you can use is lost time rate. With this, you can understand lost workdays because of an absence.

For example: John works 180 hours per month. His absence within the month amount to 30 hours. 

  • Absence: 30 hours x 100
  • Possible hours worked: 180
  • Lost time rate: 3000/180 = 16.66%

Track and measure staff absence more accurately and efficiently with an online absence management system.

absence management software

3. Frequency rate

If you are concerned about the number of absences per employee, the frequency rate is a good absence rate formula to use.

  • For example: You have 5 employees, and there have been 10 absences. The formula would be: 10 x 10 = 1000
  • Divide this by employees: 1000/5 = 200

As your business grows, it is advisable to keep track of your absence. It will enable you to deal with issues or problematic employees as early as possible, but also because you may need the documentation at some point in the future.

Read more from the myhrtoolkit blog

How to calculate a sickness absence percentage for employees

Do attendance bonuses make absence levels worse?

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Written by Lyndsey McLaughlin

Lyndsey McLaughlin is a CIPD qualified HR consultant and recruitment professional who specialises in HR advice and writing about a range of business and staff management topics for employers and managers.

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