The value of managing absence

Employee absence is the biggest, non-recoverable cost to your business – but bringing these costs down can be achieved through the right strategy. Michelle Walker, experienced HR, health and safety and occupational health practitioner, explores the value to organisations of managing sickness absence.

The cost of absence is often well documented, but not always fully understood. The preferred approach is to undertake ‘attendance management’ as opposed to the more negatively perceived ‘sickness absence’ but no matter how we refer to it, when employees are absent from work the cost to your bottom line is staggering.

According the Office of National Statistics, 131m working days were lost to sickness in 2011; an incredible 22.4m of these as a result of “minor illnesses” such as coughs, colds and stomach bugs. The CIPD calculated that the median cost of absence per employee in 2011 to be £446. Many commentators believe this figure to be conservative, especially when the impact on production, service and other employees is taken into account. In the current climate, as the number of employees within organisations continues to reduce, the impact on the business when an employee is off sick is more significant than ever.

So what can we do to stop it?

The aim when managing attendance should always be to look for a return to work. For many short-term absence cases having the right procedures in place will help to reduce absence. Monitoring short-term absence, targeting those whose absence shows a pattern and ensuring that the correct recording and reporting procedures are followed can help. We all accept that some sickness absence is inevitable and most absences are genuine, but simply having to call in at a set time and speak to their manager can discourage the employee who “doesn’t like Mondays”. Interestingly, it’s also estimated that effective hand washing practices could reduce short term absence by 50% - perhaps worth a poster campaign or intranet announcement considering the 22.4 million days lost to ‘minor illnesses’ in 2011.

What about the long-term?

Long- term absence cases can be more difficult, with many involving employees who have long- term health conditions, many of whom are long serving and highly valued. Statistics show that over 25% of the employed population have a health condition, meaning that the majority are in work and sustaining their attendance. When they do need to take time off due to illness, a holistic approach to managing their absence, including their manager, HR, occupational health and external agencies, can ensure that they return to work as quickly as possible and with any adjustments they need already in place.

However, there will be cases where a return to work isn’t possible and these cases need to be managed to a conclusion as quickly and sensitively as possible. This means ensuring that the business follows both internal and legislative processes, whilst at the same time making sure that the employee continues to feel supported and valued.

For many managers having a conversation with an employee about their absence can be uncomfortable and challenging. They often don’t have the necessary skills to manage absence, so up skilling them is key to bringing absence rates down, with the resulting cost benefits to the business. How many managers, when conducting a return to work interview, have taken the employee to one side and said “let’s just say we’ve done this interview and I’ll tick the box”? This creates a barrier to managing absence and can impact on the attendance culture within the organisation. Line managers tend to know their employees better than anyone and so are key players in managing their attendance.

We know that the costs associated with absence are significant, but there are ways to reduce them. The answer lies in taking a holistic approach.

• A clear policy and objectives on attendance management – including clarity on the roles and responsibilities of the key stakeholders and a definition of short and long term absence.
• An understanding of the types of absence within the business, the reasons for it and the associated costs.
• Support and guidance for managers to enable them to manage absence effectively.

Addressing absence trends

Once the absence trends have been identified measures can be put in place to address them. There’s no point having a market leading approach to managing stress and anxiety if 90% of sickness absence cases are related to musculoskeletal disorders. Understanding the reasons for absence allows you to develop a proactive approach, based on preventing absence in the first place. This leaves you able to concentrate resources on the unavoidable absence cases.

Early intervention and ongoing management of absence cases is the key to achieving a rapid and sustained improvement. For example, an early referral for counselling to an employee assistance programme can minimise the absence of an employee who is absent for mental health reasons. Similarly, an in house physio service can mean a return to work before the employee reaches the top of the NHS waiting list. This individualised approach, together with regular reviews of exiting absence cases, brings absence rates down, with the resulting impact on costs.

Dame Carol Black and David Frost state in their 2011 publication ‘Health at work – an independent review of sickness absence’:

“Sickness absence from work is often unavoidable, but when unduly prolonged it is wasteful and damaging - to individuals and their families, employers and our wider society”

As employers, reducing sickness absence means reducing costs, so it’s vital that we get it right.

For more information on managing employee absences, please contact our HR regional director, Rob Archer.

T: +44 161 829 0457

E:  robertarcher@pageexecutive.com.