Softworks Blog

How to ensure your absence policies deliver every time

Posted by Mairead Walsh on Thu, Jun 4, 2015

Absenteeism is not something that is confined to a few sectors of the economy. It is one of the most persistent obstacles to productivity, profitability and competitiveness. It can cause overtime, late deliveries, dissatisfied customers and a decline in employee morale amongst workers who are expected to cover for an absent employee. Ultimately, absenteeism is a huge financial drain on a company’s bottom line with the indirect costs often exceeding the direct costs. In this article I will reveal why absenteeism remains a persistent problem for organizations, despite the fact that many have clear and well thought out policies in place. I will show you how to promote a culture of attendance and explain why a strategy of proactive absence management is key to the successful eradication of absenteeism.

So why do absence policies fail?

Many of the organizations that we have worked with over the last 25 years have had first class policies on absence management. They have been well planned, thought out and communicated to employees. The failure of these policies has been down to the reliance of organizations on line managers to implement, track and take ownership of these policies. Understandably, managing absence becomes just another headache for a busy line manager. As absence management is usually not considered part of the manager’s core responsibilities or key performance indicators, there is very little incentive to devote time to this area. It also means that action is rarely taken before it is too late or, at all. Set out below are further reasons why absence policies fail;

  • Processes and policies are in place but not consistent – different managers enforce it in different ways.
  • As soon as organizations stop tracking how the policies are implemented absence rates rise.
  • Tracking manually is a nightmare so managers are reluctant and will prioritize “more important” tasks.
  • Senior management don’t appear serious – why should other managers bother?

How much is absenteeism costing your organization?

Absenteeism rates vary among Softworks customers with some customers experiencing a rate of less than 2% and others going into double figures. Figures also vary within organizations. Have a look at the table below for the savings that can be obtained by a 1% reduction in absenteeism based on the size of your company and your location. For the purpose of this exercise I have taken the following average annual salaries. North America $48,000, Europe €36,000 and UK£25,000.

Reducing Absenteeism by 1% - Cost Savings

Number of Employees

North America

Europe

UK

100

$48,000

€36,000

£25,000

250

$120,000

€90,000

£62,500

1,000

$480,000

€360,000

£250,000

5,000

$2,400,000

€1,800,000

£1,250,000

10,000

$4,800,000

€3,600,000

£2,500,000

The figures above are the direct savings based on what absenteeism costs from a salary basis. However, don’t forget the other costs set out in the table below.

Add Tangible Costs
  • Sick pay scheme
  • Replacement cover
  • Additional overtime
  • Lost productivity/level of service
  • Increased administration & forms processing
  • Legal costs of potential claims

 

Plus extremely damaging intangible costs
  • Fostering a culture of absenteeism acceptance
  • Management, HR and payroll time dealing
  • with absence
  • Company Image
  • Employee Morale
  • Company Reputation

 

Taking these costs and savings into consideration, there really is no excuse for not taking a closer look at absence management. There is a proven way to dramatically reduce the incidence of absenteeism in your organization. While it will take a bit of work, the results and savings to be made will more than compensate for the effort. Remember, the costs and savings above are calculated for one year only. Your organization will bank these savings, this year and every year going forward.

Duvet_Day

What can we do to help stem the tide of absenteeism?

Just as an employer analyzes labor turnover, an organization should look at sick leave trends. Is absence higher in one department or under a particular supervisor? Are workplace practices or policies affecting absences? Do children’s illnesses in turn lead to your staff taking time off? Many companies are still using the restriction of sick pay and disciplinary procedures to tackle non-genuine illness, but increasingly using the carrot rather than the stick is being recommended. Implicit in this approach is the address of the wider causes of absence.

Research shows that improvements in employee attendance can be achieved by making absence management an integral part of their overall company policy - by creating an “Attendance Culture”.  It seems that the shift has been away from a punitive approach of ‘absence control’, in favour of enlightened ‘attendance management’ strategies which aim to provide a working environment which maximizes and motivates attendance. Organizations with the lowest absence rates are those where managers take responsibility for managing absence. However many organizations are still struggling with this as managers are reluctant to face the problem head on or are too busy with more “important tasks” to follow up. Furthermore if the business does not truly measure the cost of absenteeism the benefits of managing it are not clear to managers. This is where you should consider an automated absence management system.  With an end to end automated solution to manage absence, line managers are provided with easy to use tools and in turn motivated to manage absence effectively.

An automated absence management system basically sits in the background and kicks in as soon as an absence is recorded. From that point on, every step is automated giving businesses, a systematic and automated way to track and manage absence. This offers organizations a consistent, systematic, fair and automated way of reducing absenteeism. The product does not replace an organization’s current HR Systems, rather it can be installed as a standalone system and/or integrate with systems that you already use.

How can an automated absence management system assist your organization?

  • Automates the entire ‘end to end’ absence management process, applies policies and assists managers implement it in a consistent, uni-formal and fair manner.
  •  Enforces organizational procedures while keeping senior management in the picture in terms of how effectively the process is being implemented i.e. number of employees at each stage, managers not following procedure, how the business/teams are doing versus targets, etc.
  • Automates the generation of warning letters, intuitive emails, documents, reminders and step by step online forms i.e. return to work, disciplinary, etc.
  • Completely configurable to each organization including workflow reminders.
  • Creates good habits right from the start and ensures managers consistently follow the process. If they forget, the system will send reminders or escalate it when necessary.
  • System delivers so managers don’t have to think.
  • As complicated or as straight forward as you want in terms of stages and steps in the process.*
  • Full audit trail so the manager and the organization is protected.
  • Relationship between managers and employees is not strained as the “system” rather than the manager is driving the process.
  • Patterns are uncovered so employees playing the process will be detected and parameters can be set to highlight people playing the process.

Why will an automated system deliver every time?

It works because it is an end to end automated process and includes 3 essential key elements. The process is

  1. Led from the top - Senior Managers can set targets for the business that can in turn filter down to area managers. With on-going reporting, senior management are aware, involved and supportive of the process.
  2. Implemented by line managers - Line managers will use the system due to its logical step by step process. As soon as a supervisor or manager enters the first absence the system kicks in and the automated process begins generating eForms, letters etc. Everything is within the system ensuring a clear audit trail that will protect the employee, the manager and the organization. 
  3. Monitored throughout - With on-going monitoring and management reporting, problems can be picked up at the earliest stages and sorted before they become both costly and disruptive to the organization.

Summary

It is clear that the rewards of attendance management are there to be reaped for those who are ready to take action.  By becoming proactive and automating your absence management, you can easily manage, track and understand issues before they go too far.  Both managers and employees follow a logical series of steps and procedures. These steps are dependent on each organization’s absence rules and policies and can be configured to suit. Absences can be entered by managers and/or employees using a simple step by step process that is hassle free for both the employee and the manager.  By automating you are creating a system that benefits the entire workforce by proactively delivering the right information, to the right person at the right time so that they can take action. It automates the entire process, provides real time analysis and streamlines and standardizes internal processes and policies so that an organization can enjoy substantial savings to their bottom line and in turn build a platform for future growth.

 

Topics: Absenteeism