The Omicron Surge Caused Massive Worker Absences — But It’s Not All Bad News

March 2, 2022

Well, we have good news and bad news, and we’ll start with the news that should surprise no one: the Wall Street Journal reported last week that employee absences due to Covid-19 were holding back companies’ growth. As the Omicron variant of the Covid-19 virus surged across the US with tidal force throughout December and January, more workers were taken out of their workplaces than at any other time since the pandemic began, either due to infection or precautionary quarantining.

Not that there’s ever a convenient time for a highly contagious virus to sweep through the country, but given the pressures that employers were already feeling amid hiring challenges, record inflation, and worker shortages, this winter did feel like a particularly punishing time for employers to be tasked with weathering yet another widespread surge in Covid cases. From workers who had to miss work to the employers who were left scrambling in their absence, it’s been a pretty miserable few months for everyone. And no one was feeling it as much as the HR teams who had to scramble to accommodate all the absences — and there were so many of them.

6% of U.S. workers were absent from work in January (that’s…a lot)

Nearly 8.8 million people — that’s roughly 6% of workers on U.S. payrolls — were absent from work during the first 10 days of January, either because they were sick or caring for someone who was sick, according to census data. These worker outages hindered companies’ ability to maintain regular business operations, fill orders, and hit goals. This coupled with continuing frustrations around shipping delays, materials shortages, and inflation didn’t exactly set companies up for a successful start to the new year. For example, McDonald’s cut back operating hours by about 10%, according to a call with Chief Executive Christopher Kempczinski in January.

Of course, that 6% worker outage rate wasn’t consistent across companies and regions. In places where the Omicron surge was especially brutal, the number of workers who were out was, of course, significantly higher in some cases. An example from the WSJ illustrates:

At PPG Industries Inc., PPG +0.16% a Pittsburgh-based maker of paints, coatings and specialty materials, some of the company’s plants have had 40% of workers out in recent weeks, Chief Executive Officer Michael H. McGarry said on an earnings call last month.

The company had more than four times as many employees absent from the workplace because of Covid-19 in December and January, compared with October and November, Mr. McGarry said.

“The toughest job in PPG right now is a plant manager,” Mr. McGarry said. “They wake up in the morning, check their phone to see how many people call off sick, then they get to work.”

PPG’s rates of absenteeism declined significantly in the second half of January, Mr. McGarry said in a statement, adding that he was optimistic the trend would continue.

Worker outages are making existing working shortages even tougher

You probably have a grasp on the overall trends governing the hiring market right now: Millions of workers have left their jobs, competition for candidates is intense, and companies are doubling down on efforts to retain employees.

The numbers reflect this story, with more people choosing to leave their jobs and companies bringing down fewer layoffs and firings.

But there’s reason to be optimistic (no, seriously)

So all of that — that’s the bad news. There’s…a lot of it. But let’s talk about that good news we mentioned.

First, Covid is calming down again, slowly. As the Omicron surge starts to subside in some parts of the country and Covid-related worker absences level off accordingly, employers are slowly starting to regain their ability to conduct business as usual. Despite continuing challenges around hiring and employee retention, there’s still optimism about prospects for growth this year, at least in part due to companies’ adaptation to the pitfalls of Covid waves (since unfortunately, we’ve been through quite a few at this point).

“What we’ve seen throughout the pandemic is that the economic fallout from each successive wave of case counts has been smaller and smaller,” said Nick Bunker, an economist at job site Indeed told WSJ. “While Omicron did disrupt everyday life, it didn’t seem to have much impact on the labor market in terms of hiring. It does look like we’re primed for continued strong progress in 2022.”

Workplaces are learning to adapt to Covid-related absences

It’s kind of an upside to a downside: the longer we deal with Covid wreaking havoc on the continuity of our businesses, the better we learn to deal with it and plan for it, and the less it disrupts us. We’re not sure if “learning to live with a wildly disruptive virus” counts as good news, but it certainly is better than if we weren’t learning to adapt.

Another reason to not sink into despair: U.S. employers added 467,000 jobs in January, on the downward slope of Omicron, which was a far more favorable figure than economists expected.

Now, as the year moves on, three big questions hang over employers:
  • Will there be another business-disrupting Covid variant down the road following Omicron?
  • What can we do to attract and retain the best employees in a job market where the bar seems perhaps permanently raised?
  • What steps can we take around leave management to brace ourselves as fully as possible for the eventuality?

And to that last point, this is where we’re particularly hopeful about the future. Because how you go about shaping and managing employee absences really does determine everything about how your company will fare against Covid (which simply does not seem to want to leave us alone) — and we definitely have some thoughts about what you can do. See? We told you it wasn’t all bad news.