· 5 min read · Features

Absence management: Is it time for employers to rethink their policies?

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The Welfare Reform Bill will force employers to rethink absence management policies, with emphasis on prevention and rehabilitation.

Despite reports that sick employees would rather drag themselves to the office just to be 'seen' to be there right now, the depressing reality for HR professionals is that in some quarters long-term absence is actually on the increase. A 2009 sickness absence survey carried out by EEF, the manufacturers' organisation, and Unum, the group risk insurance provider, showed that although overall sickness absence is falling, 36% of employers noted a rise in long-term absence in 2008. Overall, 175 million days are lost every year, costing £100 billion.

But for those companies that see long-term absence as the unavoidable part of business, the new Welfare Reform Bill, which is going through Parliament now, could be a shock. It wants employers to re-examine their absence management and rehabilitation care policies thoroughly, with an emphasis on much earlier intervention and prevention strategies.

According to Matthew Beard, director of vocational rehabilitation specialist Medicess, the Government increasingly wants employees to have earlier access to rehabilitation, especially as the EEF report finds that among those organisations where there were 'no barriers' to rehabilitation, sickness absence rates were 0.7% lower than those with barriers. This equates to an extra 1.5 days attendance per worker, saving approximately 4.5 million days of work lost across the manufacturing industry alone. "Across an entire workforce," Beard says, "failure to intervene and manage an employee's rehabilitation needs can lead to a large and open-ended financial obligation. Within the current economic climate, controlling this is of great importance."

But despite the evidence that intervention leads to fewer days off sick, will cost-cutting businesses really be able to justify spending money on preventive services as the Bill wants?

A Unum spokesperson says: "Absence management is not moving into the 'nice to have' compartments of the corporate purse." Meanwhile, Joy Reymond, Unum's head of rehabilitation and health management services, says the message from the National Institute for Health and Clinical Excellence (NICE) is to go beyond the traditional view that sickness absence is simply the unfortunate consequence of diseases and medical factors usually beyond the employer's control. "They need to recognise there are a number of actions that employers can and should be taking to improve things," she explains.

NICE has long believed employers' actions (or lack of them) can have a significant impact on the health of the people they employ. This is not a new concept. But what is new is that the NICE guidance is focusing not on traditional diseases but on the health problems that are common throughout the population, and offering straightforward recommendations of action employers should be taking.

It is notable there is no vocational rehabilitation profession in England, unlike in Northern Europe, the US, Canada, Australia and New Zealand. Mark Baylis, deputy chair of the UK Rehabilitation Council, believes many employers are resigned to certain levels of absence, while only the proactive few seek to understand how they can reduce them through improved prevention and rehabilitation schemes.

Baylis estimates only 10% of companies take rehabilitation seriously, adding: "Many firms pay lip service to the concept, especially in the public sector and among SMEs. Although the number of firms genuinely adopting rehabilitation as part of absence management is increasing all the time, progress is slow." He adds: "Bosses need convincing rehabilitation works and that it is cost-effective. No employer, as far as I am aware, has ever withdrawn from a commitment to rehabilitation once they have started it."

From an insurance point of view there are sound reasons to tackle long-term absence early. "Absence management is not cheap, but having an income protection policy means companies will be able to offer staff EAP schemes, or get discounts on preventive health policies," says Catherine Moxam, spokesperson for GRiD, the body that promotes group risk. "There is scepticism though. Given there is no job for life any more, employers are rightly asking what is an acceptable amount of time to support someone."

But Alistair Dornan, head of wellness and productivity management at human capital lifecycle company Right Management, says he has found companies misalign their objectives when considering absence and fail to separate the short-term from the long-term. He says initiatives to tackle absence have limited success: "Organisations do not manage their health interventions strategically, often doing little more than event-led initiatives, such as gym membership or 'fruity Fridays', which are difficult to align with corporate strategy or measure in terms of their success and impact on key performance metrics.

"Most organisations' preventive health management programmes are illness management solutions. As a result, while the business case for effective wellness management has never been better understood, the execution is often poorly undertaken."

Jonathan Russell, deputy director, Department for Work and Pensions (DWP), has commissioned Right Management to assess its own attendance levels. "It was obvious there was room for improvement with regard to our working days lost and our attendance management. We want people to think work is a good place to be - and we also want to prevent, as far as possible, people becoming ill in the workplace. If they are becoming ill we want to manage that so they can return to work as soon as possible."

Russell's answer is the DWP's 'Live well, work well' programme. He says: "We recently started an online physiotherapy advice tool, because some of the factors that affect our attendance management and make people ill in our environment are things like musculo-skeletal disorders. Rather than wait until someone goes off sick, we try to nip it in the bud." He adds: "I can see why people might feel it is costly but while other companies may not be able to do something on the scale we are doing, it doesn't mean they can't think about the wellbeing of their staff and take steps to provide elements of it."

He concludes: "If you look after your staff it will pay dividends in terms of attendance. They will be more productive and motivated to help the business to deliver its objectives. Yes, there is an altruistic element to it but there is a hard-nosed business reason too."

RETURN ON INVESTMENT IN HEALTH

The rate of sickness absence and its allied cost are higher than many companies believe, says Hewitt Associates Healthcare Fundamentals Survey: 56% of respondents said stress was an issue for their organisation but only one-third provide stress management coaching for managers. James Kenrick, head of UK Corporate Healthcare Consulting at Hewitt Associates, said: "Reducing absenteeism is the ultimate goal for employers. To achieve this, they need to approach the problem from a total health management perspective. This means collecting quality data on the reasons behind absenteeism and developing a co-ordinated programme to encourage good health in their workforce." Proactive firms that offer subsidised gym membership and promote healthy eating typically see a return of £3 for every pound spent on employee health initiatives.

POOR ABSENCE RECORD AFFECTS JOB SECURITY

The criteria for deciding who should be in line for redundancy can rest on an employee's absence record, according to research carried out by City law firm Speechly Bircham with King's College London HRM Learning Board.

The researchers noted that while 29% of senior HR managers reported an increase in levels of stress among employees, and nearly one-third of respondents said there was an increase in employee relations problems such as bullying and stress, 25% encountered less sickness absence.

Richard Martin, employment partner at Speechly Bircham, said: "While an increase in stress might usually be reflected in higher levels of sickness absence, staff appear to be more reluctant to take time off as they rightly realise this may expose them to greater risk in cutback programmes."