The Effect of Employee Lateness and Absenteeism on Store Performance

Abstract

We empirically analyze the effects of employee lateness and absenteeism on store performance by examining 25.5 million employee shift timecards covering more than 100,000 employees across more than 500 U.S. retail grocery store locations over a four year time period. We first document that both lateness and absenteeism rates are sizeable: in our sample, shift-level lateness (by at least 5 minutes) and absenteeism rates are 9.6\% and 11.6\%, respectively. Additionally, conditional on being at least 5 minutes late, employees clock in on average 21 minutes after their designated start time. Using instrumental variables constructed from shifts scheduled with short notice, we find that lateness and absenteeism negatively affect sales, transactions, and average basket sizes. We also find that one employee's lateness and absenteeism can ``spillover" onto their coworkers, which causes them to stay past their original clock-out times. Our estimates suggest that even with accurate demand forecasting capabilities, retail stores can potentially improve performance by accounting for employee lateness and absenteeism in their labor scheduling decisions.