Employee attendance is the action or state of being present at a place of work according to the company’s policies.
Quantitative tracking of how employees work helps understand absenteeism, punctuality, time discipline, and accounting. This is more helpful for client-facing roles and checking the productivity of employees. It helps align with the workforce management plan. With this, managers can know whether efficiency and effectiveness are on track or plan to take specific initiatives to improve it. Now, translating to an organization-wide scale, employee attendance management can directly impact the company’s profitability, reliability, and reputation.
Importance of employee attendance
Thanks to digitalization, organizations have become truly global. Organizational workforces are now open to being more diverse. They exist in multiple formats, from brick-and-mortar to remote-first digital companies. New work models, such as remote and hybrid, have emerged after the pandemic. This has led employee populations to become increasingly distributed and diverse. As a result, employee work must be tracked in many more ways. No longer are people coming to the office and swiping in and out for hours clocked. Knowledge workers work on systems and platforms on the cloud.
Given the multiple formats, it becomes even more critical to track employee attendance:
In traditional work formats, more time spent at work meant more productivity. However, with the dominance of the knowledge economy, organizations are focusing more on outcome-driven performance instead of time spent. So how does this translate to employee time and attendance (T&E)?
In an interconnected, collaborative work environment, absenteeism or low productivity of one employee can trickle over to colleagues, teams, and departments, leading to larger issues of coordination and management.
Even one person not showing up consistently can impact the moods and morale of the overall team, departments, and organization on the whole. Lack of discipline can become infectious. Hence strong policy on time and attendance is a must.
Brick-and-mortar industries, such as manufacturers, retail, etc., work on the concept of paid overtime as per labor laws. Hence, one person not turning up may mean calling others for overtime work beyond regular working hours or on holidays to compensate for lost productivity. This can lead to higher cost-to-company.
Time theft employee behavior:
Some employees may engage in time theft by pushing work or pretending not to complete work and taking overtime to earn more. This has a negative cost implication.
Payroll and Compliance:
Time and attendance are critical inputs to calculate salaries, enabling fair and equitable pay practices accurately. Also, compliance statutes must be followed from a labor law and governance perspective. For this, attendance records must be maintained precisely.
Attendance systems factor in role-based access controls, thereby enabling security.
A Human Capital Management solution that can effectively measure, track, and report employee time and attendance is critical to organizational success.
Understanding Employee Absenteeism for Better Attendance Management
Employee absenteeism is a significant problem for most organizations. Several factors, such as stress, burnout, lack of motivation or engagement, and conflict with a peer or supervisor, may cause it.
Absenteeism in the workplace is defined as an occasion or a specific time-period where an employee does not stay present at work. It is any failure to report for or remain at work as scheduled, regardless of the reason. The key to this definition is that the person was scheduled to work but did not work. While absenteeism is generally due to unplanned reasons such as sickness, it can also be due to planned outages such as worker strikes.
It is usually measured in terms of absenteeism rate. According to the International Organization for Standardization, one can measure the absenteeism rate using this formula:
Absenteeism can be measured for an individual, team, or organization for any period. Organizations must have the data points required to calculate this formula. Hence, a Human Resource Information System with a Time and Attendance Management module is imperative to track employee attendance.
Some necessary data points are:
- The number of absent days, i.e., the number of days an employee was 100% absent. Lateness is not included in this.
- Count the number of total annual available workdays or you can choose for a given period. This will vary based on country-specific holidays, workforce plans, etc. To calculate this, consider the number of days in the year, minus public holidays, weekends, and voluntary days off like vacations and special days. The list of public holidays should include mandatory company days.
Maintaining this data on an ongoing basis will help HR professionals and managers calculate the annual absenteeism rate, which is:
Measuring and tracking the annual absenteeism rate is a significant input to strategize effective and targeted interventions toward building workforce productivity, organizational health, and well-being. As a thumb rule, 1.5% absenteeism is usually considered the threshold for high absenteeism.
Contrary to popular belief, less than 1.5% absenteeism is not necessarily good. It could mean that people work when sick because taking time off is unacceptable. This is referred to as presenteeism and can lead to further productivity loss, poor health, and exhaustion.
HR must also track a metric called ‘absence frequency.’ Absence frequency highlights the absence pattern, while absence rate indicates the severity of the absence.
For example, if the absence rate is 4%, it can be that the employee was ill for ten days or was sick ten times for one day each. Low absence frequency means fewer people were ill for a long time and high absence frequency means many people were absent but over shorter instances of absence. These patterns can let the HR team know when to intervene effectively and create long-lasting implications for business productivity. Hence it is essential to organize, measure and track these metrics in an ongoing and accurate manner.
Challenges of employee attendance
Lack of attendance data and analytics:
Many organizations lack valid and reliable attendance data given the multiple sources and formats. Incorrect data can lead to inaccurate insights. Sometimes, even with available data, HR may not know how to gather insights from the system.
Not regularly communicating the attendance metrics and outcomes to stakeholders can create blind holes concerning organizational efficiency and effectiveness.
Lack of action planning:
Lack of commitment to action planning can turn attendance issues into larger business concerns.
Tracking employee attendance requires several activities from employees, managers, and HR. For example, employees may need to enter time in a weekly timesheet. Managers may need to clock in time from a shared device for teamwork. And HR managers may need to track employee apps and websites. Sporadic inputs across HRMS can create disparity and a lack of ownership.
Strategies to manage attendance
Attendance management can be done daily, weekly, or monthly. Daily or weekly attendance tracking helps give real-time feedback to employees and solve issues early on, but it may give an unrealistic picture due to the limited time window. For example, an absent person may apply for leave once back. As a result, the time off is counted as paid time off, not as absenteeism. Most organizations process attendance for the entire month, with daily outcomes. This is possible only by having a reliable and accurate time and attendance tool which uses the latest technology to ensure accuracy and validity.
The best time and attendance solutions are accessible to all stakeholders. It should give employees multiple ways to clock in and out, help them better manage leave and paid time off, and integrate seamlessly with the payroll systems. HR leaders must invest in the right technology after understanding what suits the business and people.
This technology must be woven into the HR strategy, aligning with the desired business outcomes.
How to manage employee attendance
Start with a structured approach to ensure employee time and attendance management is on track:
Offer the right tools:
For a diverse workforce and work models, select diverse tracking tools such as biometrics, facial recognition, radio-frequency ID cards, mobile tracking, GPS tracking, wall-mount card swiping, timesheets, etc. These should be accessible in the cloud from any device. This will ensure dependable data sources for T&E.
Invest in data analytics capabilities:
Even with the right attendance data, HR and business managers may struggle to get real and actionable insights. Build data skills and tech expertise to report insights in a readable form. Organizations must invest in an HRIS embedded with analytics and train HR and business managers to use it.
HR must work closely with leaders to draft a business-centric and realistic workforce plan for individuals, teams, and departments, and trickling up organization-wide. This forms the base for comparing deviations.
HR needs to design and deploy targeted interventions to address attendance concerns. Define a strong attendance policy that defines shifts, working hours, disciplinary rules, regularization policy, overtime policy including eligibility and pay-out rates, workforce calendars including geography-wise holidays and off days, etc. Also, define disciplinary actions and penalties for rule violations.
Drive implementation and adherence:
Attendance management is not limited to the HR Operations team. The line manager should hold ownership of their team members’ attendance. Creating ownership and accountability models involving key stakeholders.
Communicate across levels:
Attendance outcomes must be frequently communicated with all stakeholders, i.e., leaders, managers, and employees. An HRIS with data dashboards and reporting tools can help streamline this for HR operations managers. HR must show leaders the business impact of absenteeism in actual business language. This will help prioritize attendance action planning.
Integrate with the overall HRIS:
HR must invest in a robust time and attendance management software and process. Automating and digitizing will help capture and process data across multiple employee work models. This can help reduce administrative effort and costs. Build or buy a single-point integrated system that congregates all attendance inputs across the HRIS, including payroll, benefits, etc.
Placing employees at the center of attendance management is possible by enabling employees with a self-service attendance module. This will allow them to view their attendance status anytime, anywhere, and on any device and empower them.
The onus of attendance management lies on every employee, from top leadership to managers to team members and even contract or gig workers. A well-designed, holistically integrated, and data-centric attendance management system can drive the right employee behaviors and values. These behaviors, when institutionalized, will cultivate the employee culture – a key lever for organizational success. Attendance management must go hand-in-hand with other people’s policies. Building a holistic well-being agenda, offering flexibility, creating a support system, and cultivating a community basis trust are some ways to engage one’s employees truly.
Thus, HR alone cannot be the custodian of time and attendance management. Given the direct impact on business metrics, time and attendance management should have the active involvement of leaders and line managers.