Absenteeism
Let’s start with absenteeism and break down the real costs of letting it go unchecked.
Absenteeism can stem from several workplace issues—burnout, frustration, stress, unresolved conflicts, or even feeling undervalued. When employees don’t feel motivated or supported, they disengage. And when disengagement turns into frequent absences, the financial toll is staggering.
Reports indicate that the cost of absenteeism to the U.S. economy is over $500 billion per year. But what does that mean for your company?
The U.S. Bureau of Labor Statistics reported the national absence rate to be 3.1% in 2023. With roughly 260 workdays per year, that 3.1% translates to 8.06 missed days per employee. For a manager earning $100,000 per year, that’s $385 per day × 8.06 days = $3,102 lost annually per manager.
Multiply that across 100 managers, and you’re looking at $310,200 lost every single year—just from absenteeism. And that’s before you factor in the indirect costs: missed deadlines, reduced team morale, and the added pressure on employees left to cover the workload.
Employee Conflicts
In addition to that, employee conflicts are another major stressor for organizations. Beyond creating a tense work environment, they also waste resources and drag down productivity.
According to a survey done by Accountemps, on average, managers spend 18% of their time—more than seven hours a week or nine weeks per year—intervening in employee disputes.
Take the same manager earning $100,000 per year. If they waste 18% of their time mediating conflicts, that’s $18,000 per manager per year—gone.
And that’s just one side of the equation. Conflict always involves at least two people. That means not only is the manager losing valuable time, but the other employee (or employees) involved in the dispute is, too. If we conservatively double that estimate, the real cost jumps to $36,000 per manager per year.
If a company has 100 managers, that’s $3.6 million spent annually—just on managing conflicts.
Now, let’s put these two costs together:
- One manager costs the company $3,102 per year in absenteeism.
- That same manager costs $18,000 per year in conflict resolution.
- Combined, that’s $21,102 per manager per year.
- Multiply that by 100 managers — over $2.1 million lost annually.
And we’re still not done. What happens when a manager has had enough of the constant stress and decides to leave?
Employee Turnover
When leaders decide to leave, the impact extends far beyond the cost of replacing them. A company loses valuable expertise, teams experience disruption, and rebuilding stability takes time.
In fact, one of the biggest costs organizations underestimate is employee turnover.
A mid-level employee turnover costs between 125% and 150% of their annual salary to replace, while a high-level or highly specialized employee is roughly 400%.
Let’s go back to our $100,000-per-year manager. If they leave, replacing them costs the company $125,000 to $150,000. Now, let’s say 10% of a company’s 100 managers quit annually. That’s $1.25 million to $1.5 million lost every year—just in replacement costs.
And that’s after the company has already lost over $2.1 million to absenteeism and conflict.
Total potential loss? Over $5 million per year.
And these are just the measurable costs. The emotional toll of constant crisis management—on leaders, teams, and the organization as a whole—is impossible to put a price tag on.
