Employee absence can be a key factor of staff disengagement
Rob Gray, August 10, 2012
During this summer of abundant sporting events, there has been a degree of concern about staff pulling sickies.
As HR reported in May, a Harris Interactive survey for the Workforce Institute at Kronos found that 19% of UK workers admit to calling in sick to stay at home and watch sport on TV. Doubtless appreciated by athletes and broadcasters, such behaviour is clearly problematic for those employers hit by unauthorised absences.
Deciding on how to tackle unauthorised absences isn't always straightforward. Given the increasingly flexible nature of work today, with many office staff frequently working from home, is a robust absence management policy - incorporating, for instance, clocking in, Bradford Factor analysis, a strict lateness policy - always desirable, or even appropriate? Is there potentially more to be gained from a light touch and trusting staff to manage their time, placing the emphasis on effective outputs, rather than on measuring attendance?
"If you look at McGregor Theory, every organisation has a starting-point of either X - where management inherently distrusts staff to be able to operate autonomously and therefore enforces a range of processes and rules - or Y, where you trust your staff and build engagement," says Moneysupermarket director of HR, Alan Cairns. "The approach at Moneysupermarket is of 'structured autonomy': the aim is to build a culture where people feel trusted, but also understand there are ultimate guidelines that protect the majority and highlight any high incidences of absences."
In brief, the price comparison website believes in trusting people to come to work and be productive. Staff surveys have found that its people feel trusted and the company enjoys absence levels far below the UK national average. Moneysupermarket's guidelines require people to self-report. Managers hold return-to-work catch-ups to understand reasons for absence, identify problem areas and offer support. Where an employee exceeds an absence trigger point, the company implements a formal absence-management procedure that involves an attendance review meeting. This, adds Cairns, is to support the employee and ascertain what can be offered, in terms of adjustments to assist their recovery and return to work, for instance, reduced hours, changes to duties, counselling or therapies.
For David Smith, HR director at insurer LV=, absence will always be a key indicator, as it points towards wellbeing and engagement. But over-monitoring can be perceived negatively, with staff resenting any approach that smacks of a police state. The important thing, he feels, is the discussion between line manager and individual, with a view to supporting and resolving underlying issues driving absence. A good monitoring system, he argues, should simply flag exceptions.
So, what of the Bradford Factor? Is the scale still useful and relevant in the modern flexible workplace? Smith believes it is. "It's designed to be tough on frequent, short-term absence and support serious sickness. These are good aims, but it is important managers don't use it mechanistically and avoid having the conversations that really lead to supporting and resolving underlying issues. Good managers know who's contributing well and who isn't. Having a measure just gives visibility that encourages active management."
James Arquette, director at absence management company, FirstCare, is not a fan of the Bradford scale. He feels it doesn't place enough emphasis on why an absence has occurred, which is what employers and managers must look at to determine how to support members of their team. "Ultimately, it is the action of employers once they have absence data that will allow them to manage absences most effectively," says Arquette. "The Bradford scale is far too reactive, whereas a policy based on sensible 'triggers' - a specific number of stress-related absences - can allow employers not only to identify a problem, but to step in proactively and provide appropriate support."
Some HRDs consider sickness management to be a never-ending process, akin to painting the Forth Bridge. Yet it can be vital for the wellbeing of the workforce and the health of an organisation.
Dean Shoesmith, executive head of HR at the London Boroughs of Sutton and Merton HR shared service, says establishing a clear policy framework that promotes a positive attendance culture is key. In his experience, this is founded on an efficient, modern, HR information platform with real-time data available to managers and employees. "More important is the analysis of the data and action plans to address the emergent issues - which is where HR plays a key role with senior leaders. HR also has a pivotal role to support managers with their development to provide them with the confidence and knowledge to tackle absence fairly, robustly and in a timely manner."
And he believes in active health promotion, to nip problems in the bud before they become significant. Sutton and Merton have found positive benefits and improved attendance from a balanced approach between active absence management and active health promotion. In the case of the latter, an employee assistance programme and occupational health services are bought in, as part of a London-wide strategic procurement framework. Examples of the measures in place include: healthy living advice, lunchtime walking sessions, smoking cessation support, Pilates, Tai Chi, and regular health check-ups embracing blood pressure and cholesterol levels.
"Another key factor is the correlation between occupational sick pay and absence," says Shoesmith. "In the public sector, we tend to pay full remuneration when employees are absent. A recent CBI survey reveals a link between additional absence and occupational sick pay. Organisations where statutory sick pay is the norm tend to have a consistently lower rate of sickness. These are challenges ahead in local government for the national employers and the trade unions and it would be timely to discuss and review occupational sick pay."
One school of thought is that absence management should be more about outputs. The focus could shift to performance, hitting deadlines and sales targets, rather than the amount of time spent at work. However, there are some flaws with this approach.
"Employees can certainly be incentivised for performance with additional time off," says Karen Bull, product strategy manager at outsourcing consultancy, MidlandHR. "But managing poor absence levels by focusing on performance doesn't work, because it is widely understood that high performers generally have lower absence levels."
During the economic downturn, many employers reduced the size of their workforce and it is therefore vital to ensure high levels of productivity from those who remain. Effective absence-management processes may well play a part in a strategy to improve productivity. There is now an increasing emphasis on the cost of 'presenteeism': the impact of sub-optimal health on those at work.
Glenn Laming, employer services director at insurer, Legal & General, forecasts this focus will continue in the years ahead. "I expect absenteeism and presenteeism to be viewed jointly by employers, to gain a full understanding of the overall impact on productivity. We are seeing improvements in the use of health portals to provide better insight into the health of a workforce and this can help to justify spend on health and wellbeing and ensure it is focused in the right areas."
Do all the changes mean the end of clocking in and out? Definitely not, asserts Simon Macpherson, senior director, operations EMEA, Kronos. New technology is adding more to the mix, he explains. "More and more organisations are registering both attendance and activities at work through a workforce management system, and, by using smartphones or tablets, field workers can also register hours and activities in the day. With a self-service terminal in place, employees can change preferences, check schedules and holiday entitlement and even apply for shift swaps and request annual leave."
Striking a balance between enforcement and encouragement is a judgement call and a heavy-handed approach can backfire. "An over-monitoring problem could occur where an employer oversteps the line - and contact with employees on sickness absence goes from being genuine, reasonable enquiries to borderline harassment," says Russell Brown, employment partner at Glaisyers Solicitors.
After all, the majority aren't skiving off to watch the Olympics.
According to CIPD's latest Absence Management Survey, in 2011 the median cost of absence per employee was £673. That represents a rise of more than 10% over 2010.
Research from global professional services firm PwC shows UK workers have a median average of 10 unscheduled days' absence from their jobs each year - far more than counterparts in the US (5.5 days) or Asia Pacific (4.5 days), although broadly comparable with other Western European markets. PwC believes the annual cost to UK business of this absenteeism is a staggering £32 billion. On a more positive note, UK absenteeism has declined steadily over the past decade, having remained fairly constant during the 1990s. Labour market research from the Office of National Statistics (ONS) finds that 131 million days were lost to sickness absence in the UK in 2011, down from 178 million days in 1993. Interestingly, workers in organisations with 500 or more employees had the highest level of lost working hours last year, at 2.3%.
Carrot: Vaillant addresses absence through flexibility
With approximately 13,000 employees, Vaillant Group develops and manufactures products at 16 sites in eight countries and sells them in more than 80 countries. The heating manufacturer has been working with time-and-attendance specialist Kronos for a number of years.
Although Vaillant takes absence management seriously, by bringing in an effective time and attendance system, for example, the emphasis is on offering good, flexible working conditions.
"Our focus at Vaillant is to encourage attendance, rather than simply managing and punishing absence, with a wide range of flexible working options and a willingness to listen to the needs of individual employees, in order to provide working conditions that work for both the employee and for Vaillant," says Vaillant's continuous improvement manager, Allan Harley.
"The focus in manufacturing is around quality production, planned attainment and efficiency. However, if you haven't got a satisfied workforce, all three will suffer. Kronos allows us to proactively manage absence and enables us to offer a wide range of flexible working conditions, which I firmly believe improves attendance levels and staff retention at Vaillant."
Introducing the changes had had a positive impact. Staff turnover has fallen from 3.8% to 0.6% and absence levels are down 31% from 4.1% to 2.8%. This has delivered important benefits commercially - there has been a 30% reduction in temporary staff costs and an 80% drop in time lost due to skills shortages.
The approach has also been well received by Vaillant staff, with research indicating improved employee morale.
Stick: Synergy Housing gets tough
In April 2011, Synergy Housing was recording 12.96 days average absence per employee per year. Annual absence costs of £472,000 (£1,350 per employee) were unsustainable. Synergy head of HR, Rosie Green, responded by devising a new absence management strategy for Synergy's 350-strong team - deliberately linking absence to pay. It was a tough approach, but one she believed would work, due to its fairness.
Employees' Bradford Factor scores would dictate the annual pay increase received:
- <64 = the full pay increase
- 64-199 = 50% of any pay increase
- >199 = no pay rise
Managers monitor scores every month; employees approaching 64 points are invited to meet and discuss the reasons why, so interim action can be taken. If an absence problem continues, without improvement or explanation, employees face disciplinary action.
Once employees realised the new system's effect on pay, short-term absences fell dramatically. In 12 months, Synergy's average number of absences per employee fell from 12.96 to 5.13 days - a 60% improvement. The monetary saving, in terms of pure salaries and on-costs alone, was over £285,000. Had absence cover and intangible benefits been analysed, the savings would be even greater.
Inevitably, some colleagues at first considered the new process draconian, fearing it might be detrimental to employees that are unwell. In fact, combining use of Cascade HR software to analyse vast amounts of data and line manager education/empowerment helped to uncover individual issues that may have been unacknowledged otherwise. As short-term absences improved, managers gained more time to investigate long-term issues on a case-by-case basis, says Green. A stronger relationship with the occupational health department also helped Synergy return three employees with severe long-term problems to work.
An employee survey revealed an 86% satisfaction rate. Anecdotal feedback showed staff felt the new strategy fairer. Even those with long-term issues, who didn't receive a pay rise, did not think it unfair.