The Hidden Costs of Absenteeism in Healthcare

Beyond the sick day

Absenteeism in healthcare is something all organisations face, a challenge that’s part of the everyday grind. But its true impact extends far beyond the immediate inconvenience of filling shifts, affecting everything from patient care to organisational culture. By looking beyond the sick day, we can uncover these hidden costs that are draining the system.

In 2022, absenteeism cost Australian businesses $24.2 billion in lost productivity. In New Zealand, the cost reached NZD $2.86 billion, marking a significant increase from previous years.

While these figures are concerning, they only scratch the surface. In the healthcare sector, the ripple effects of absenteeism flow outwards, compromising patient care, adding a burden to remaining staff, and exposing organisations to compliance risks. Absenteeism is not just a staffing problem. It’s a systemic one.

The obvious and immediate costs

When a healthcare worker is unexpectedly absent, the impact can be immediate, and the costs are often measurable. With many organisations already operating near capacity, even a single absence can trigger a cascade of issues: additional overtime, reliance on agency staff, and unanticipated training needs.

For example, in New South Wales, the use of agency nurses has grown dramatically. Agency staffing costs ballooned from $6 million to $37 million over the seven years between 2016 and 2023.      

But this is really just where the financial impact begins. These figures don’t include the indirect costs associated with training and onboarding, or the potential errors made by temporary workers unfamiliar with systems and patients. The direct financial hit is real but it's only part of the story.

Flow-on effects: fatigue, burnout, and attrition

When one team member is absent, others must pick up the slack. In healthcare settings already running at or near capacity (which unfortunately includes many healthcare environments today), even a single absence can trigger a domino effect. Nurses and allied health workers absorb additional responsibilities, extend their shifts, and work under increased stress. This slow accretion adds up over time, contributing to chronic fatigue and professional burnout.

A recent study on workforce turnover in Australian health services found that client-facing staff experienced alarmingly high turnover rates, up to 164% in some cases. Burnout that leads to resignation can create challenges, from the cost of recruitment and training to the disruption of team dynamics. These are well-recognised concerns, but the complex cycle of absenteeism often remains unchecked, exacerbating these issues.

Then there’s ‘presenteeism’, where staff continue working while unwell or mentally depleted, which is another less visible stressor. Staff may continue to show up to work, either out of duty, financial necessity, or fear of letting down colleagues, but their performance is often impaired as a result. This can lead to increased errors, reduced quality of care, and longer-term health issues, ultimately fuelling an ongoing cycle.

Long-term? High rates of absenteeism can also erode organisational culture. Team members may feel undervalued, unsupported, or resentful, creating a toxic workplace atmosphere, which, in turn, feeds further absenteeism.

Compromised patient care

At the heart of healthcare is the commitment to people—patients and staff alike. When staff are unavailable, whether for a day or weeks, patient outcomes can suffer.

Missed nursing care is one of the most well-documented consequences of understaffing. Research in Australia shows that inadequate staffing levels are strongly linked to omissions in care: tasks like monitoring patient conditions, delivering medications on time, or providing basic hygiene support.

The result isn’t just longer wait times or overworked clinicians, either. It’s real harm: higher readmission rates, increased risk of infection, lower patient satisfaction, and in the worst cases, increased mortality rates. In one study, researchers found that, for every patient you add per nurse, the odds of that patient dying within 30 days of hospital admission rose 7%. That’s a sobering increase, all things considered. Each additional patient also correlated with a 23% increase in staff burnout.

Imagine a scenario in a regional hospital where two nurses call in sick, and no agency staff are available. A single nurse may be left to cover a ward, reducing vital time per patient. In aged care, this might mean missed hydration rounds, increasing risk of UTIs or falls among vulnerable residents. While these might seem like isolated lapses, they accumulate over time and contribute to systemic failures in care delivery.

Long-term consequences can include increased hospital-acquired complications, delayed recovery times, and even legal action (in the event of severe or negligent oversights). The reputational damage from poor patient outcomes can affect community trust and funding, further compromising an organisation’s standard of care. And so, the downward spiral continues.

The compliance and risk angle

Compliance with staffing, safety, and reporting requirements is non-negotiable in healthcare. We recognise the complexity of maintaining these standards, and how absenteeism adds another layer of risk that needs to be addressed proactively.

Delayed audits, skipped training sessions, or over-reliance on undertrained or temporary staff can result in breaches of duty of care. In the digital age, overworked or reduced staff may also be more vulnerable to cyber security threats, leading to breaches in patient privacy and data protection.

In Australia, penalties for serious or repeated data breaches can reach up to $50 million. Non-compliance with infection control standards, medication protocols or safe work practices can also result in sanctions, fines, and reputational damage.

During flu season or COVID outbreaks, absenteeism and infection control are deeply intertwined. Staff shortages make it harder to enforce surface sanitisation protocols, air quality, or isolate cases appropriately. This raises the likelihood of outbreaks, further increasing absenteeism and compliance risk in a vicious loop.

The important thing to note is that risks rarely exist in isolation. A single breach in data protection, safety protocols, or care standards can trigger audits, negative media coverage, or loss of accreditation, especially in regulated aged care facilities.

A complex problem with no silver bullet

While it seems reasonable on the face of it to try to address absenteeism with better rostering or stricter sick leave policies this perspective ignores the broader system at play. It’s the equivalent of treating a patient’s symptoms, without bothering to find the cause. And absenteeism is a symptom. It’s a sign that your system is under stress. In broad terms, absenteeism can reflect:

• Unhealthy physical environments (e.g., poor air quality or temperature control)
• Poor workplace design or workflows that increase injury risk
• Psychological stress caused by toxic culture, understaffing or lack of support
• Inflexible rostering and limited professional development
• Inefficient or outdated systems and tools that add to staff frustration

These issues require input and action from multiple departments: HR, clinical leaders, facilities managers, compliance officers, digital teams and finance. Without this coordination, even well-intentioned efforts are likely to fall short.

Like so many things in healthcare, while absenteeism is easy to diagnose, we recognise fixing the problem isn’t always simple. But the first step, at least, is straightforward: the need to reframe the way we think about absenteeism.

Framing of the issue matters

Absenteeism is often framed in operational terms: How many people called in sick? How many shifts were missed? What was our agency budget this quarter? But these numbers are the end result of deeper systemic stressors. By shifting focus from the absence itself to the conditions that create it, we find healthcare organisations can start to see patterns, and address them before they lead to burnout, risk, or patient harm.

Time to shift the lens

Absenteeism in healthcare isn’t just about who’s not at work. It’s about the broader conditions that make it hard to show up in the first place and the compounding risks when good people burn out or give up.

Reframing absenteeism as a systemic challenge, rather than a staffing inconvenienceopens the door to more sustainable, holistic solutions. And ultimately, it helps build healthier teams, better outcomes, and more resilient healthcare systems.