The Cost of Employee Lateness to Your Business

April 10, 2015 | 5,441 views

The Cost of Employee Lateness to Your Business

The Cost of Employee Lateness to Your Business

How tolerant are you about lateness in your business? Is it normal for a few of your employees to show up 15 minutes to half an hour late for their shift?

Tardiness at work doesn’t seem like a big deal. You might just give your employee a slap on the wrist and say, “don’t do it again.” Or, if you’re a little stricter about it, you might decline your employee a promotion. If the problem persists, you’re doing yourself more of a disservice by not taking swift action to stop the tardiness in its tracks. That’s because there is a cost above and beyond that lost time.

Here’s how your late employees are costing your business cold hard cash.

Costly Productivity

It is possible to put a price tag on lost productivity, according to Monday Mornings. It’s called, “cost-loaded time.”


Here’s how it’s calculated:

  1. Estimated Hourly Wage
  2. PLUS Overhead Costs
  3. PLUS Benefits
  4. PLUS Consumable Materials

Altogether, this gives you an approximate multiplier that you can use to calculate lost productivity. On average, this multiplier is 2.71. Multiply the number by your employee’s hourly rate to get the true cost of their tardiness in relation to lost productivity.

Using this rule to calculate the cost of lost productivity, an employee that earns $55,000 each year costs the company $17.92 for each 15 minutes he or she is late.

Employee Morale

That lost productivity spills over onto other employees. Co-workers have to pick up the slack of their late employee, contributing to increased disdain among team members and stress on the job. This costs your company even more in reduced employee morale.

In the United States, it is not culturally acceptable to be late on a regular basis. Although most people can understand the rare occurrence of a traffic accident backing up the roadways, or a forgotten alarm clock, regular tardiness is frustrating. When someone continually shows up late, the rest of the team feels the burden.

Employee morale comes at its own cost too.  Unhappy employees are more likely to leave a company. Total turnover costs can skyrocket to as much as 150% of an employee’s salary, according to author Barbara Bowes from Legacy Bowes Group.

The True Costs

With cost-loaded time and turnover costs paired together, your late employees are costing you more than you realize. What seems like a slight nuisance could actually stunt your business growth.


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