Thursday, September 29, 2011

How much is employee lateness costing your business?

Have you ever missed your train or gotten a flat tyre en route to work? Maybe your just not a morning person or you struggle to get the kids out for school before you head to the office?

Whatever the reason, when not measured and managed properly, employees’ lateness can cause businesses thousands of dollars each year in lost productivity and profits.

To understand exactly how much lateness could cost your organisation, let’s look at the example below.

Company ABC Pty Ltd has 150 employees.

10% of their workforce (15 employees) is persistently late for work by 10 minutes. Their average hourly pay is $25.00 p/h (10 minutes late represents $4.16)

Assuming there are 232 working days per year: 232 x 15 (late employees) x $4.16 ($ lost due to lateness) = $14,476.80 lost per year

Combine that with the lost productivity, extra overtime costs occurred when covering workload, and the order value of the contracts lost due to delays in delivery, and you can clearly see how just a few minutes lateness can really affect your bottom line.

So what can you do to address the issue? The Forum of Private Business proposes the following below steps:

1. Set boundaries

Your staff needs to know what you expect from them, therefore a clear lateness policy should be introduced and communicated across your workforce.

The policy should cover:
  • The required standards of timekeeping, i.e. working hours, shift patterns, any flexi-time or flexible working arrangements
  • Any consequences of persistent lateness
  • What disciplinary action will be taken under the disciplinary procedure
  • How your company will monitor time keeping, i.e. timesheets or clocking in machine
  • If and how your staff will have to make up any time they have missed
  • Who they should report lateness to if they know are going to be late and by when

2. Create a formal procedure

The Forum suggests that persistent lateness can often be resolved informally and the employee may be given an opportunity to improve.

This often proves to be a more effective way of resolving such an issue at an early stage - highlighting potential problems that you can quickly address and negating the need for an investigation and disciplinary meeting.

If after the informal action lateness continues to occur, it may create grounds for a formal disciplinary procedure.

3. Be fair and flexible

We’ve all been affected by unexpected events i.e. rail strikes, traffic accidents or inclement weather, which can impact on the time taken to travel to work.

Employers need to be realistic and understanding about occasional unavoidable problems with getting to work. They should always listen to employee’s reason for lateness, which may indicate problems concerning management, working relationships and work hours.

Where possible companies should plan ahead and be open to changing shift patterns, allowing temporary home-working or flexible working arrangements, if appropriate.

How to effectively monitor attendance and reduce the financial impact of Employee Tardiness

It doesn't take a rocket scientist to know that if you monitor employees’ attendance and absence patterns their overall presence rate will generally improve.

An automated Time and Attendance system can help reduce employee lateness by effectively monitoring and analysing working time and absence patterns. I for one know that if I have to register my attendance in the morning, I make double sure I make it into the office on time!

An effective Time and Attendance system also allows you to set up specific rules relating to your business operation. For example, you could set up a rule whereby once a person arrives late to work by 7 minutes, the system rounds that figure up to 15 minutes, meaning 15 minutes worth of pay will be reduced from your employee’s salary.

Continue to our website to find out more information about automated Time andAttendance systems and absence management modules.

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