The difficult economic climate has heightened the need for expenditure control and cost reduction in most organisations and the increased focus in this area will be with us for some time to come. Financial controllers are no doubt scrutinising their operating statements to identify opportunities for savings and highlighting areas of over expenditure for remedial action, a necessity at any time but an absolute must in today's environment. An obvious and vulnerable area of high cost in urgent need of special focus and action is sickness absence, which has the potential to be a major problem with all the evidence of the recent CBI/Pfizer survey pointing toward rapidly escalating costs.
Our experience during many years, both as front line HR and now as management consultants, is that much needs to be done and can be done to control and reduce this major cost area which in itself is often grossly underestimated.
All too often the cost of absence is taken as the 'face value' wage cost when in fact the knock on costs are considerable, most particularly those relating to disruption in customer service, and consequential overtime &/or agency cover. We all recognise that our employees' time and contribution is our most valuable (and often most costly) asset, why then do we not fully commit to tackling sickness absence? Our experience would seem to indicate that whilst the emphasis may vary, the reasons for not fully committing are common to many organisations and can be summarised as a combination of:-
- A lack of ownership throughout the business: the problem is seen as one for HR to solve with local management being reluctant to accept its responsibilities in this area
- A prevailing undercurrent of "it's too difficult or thorny an issue" and therefore a reluctance to take action
- A lack of confidence and knowledge in handling difficult people issues within the organisation, which stops local management getting fully involved.
- A lack of an effective, fair and workable system for monitoring and measuring absence and/or the associated costs
- A lack of a legally compliant, fair and effective procedure and/or a failure to clearly communicate it across the business - combined with a lack of training for key people.
- A cultural carry over that sickness absence is akin to, or an extension of, holiday leave entitlement
- A lack of commitment to tackle the issue at senior level
- An incorrect belief that legislation precludes positive action and a reluctance to accept the need for a pro-active approach
Although this list of reasons may, at first, seem daunting, recognising and accepting the blockers to positive action is always the starting point to improvement. Some organisations may indeed be capable of identifying which combination of reasons apply, but often an objective view from outside is needed to accurately diagnose the barriers to tackling the 'Absence issue'.
It is fair to say that even if an organisation accurately knows its stumbling blocks, it often needs - and benefits from - the catalyst of specialist outside help to kick-start awareness and action. We, at Springboard HR, for instance, find that we are able to build confidence and 'get the message over' bringing broad experience and specialist knowledge to the table, to provide a fresh impetus which often is only available from outside intervention. Without doubt, each of the barriers can be addressed and overcome through a considered plan of action, to achieve a stop-change in absence management within most organisations. Sickness absence costs are likely to significantly increase in the coming months and to delay positive action is to store up a problem which organisations can ill afford. Financial controllers, line managers and HR managers must surely spotlight this high cost area and treat it with the same rigour and energy as other cost areas. Organisations cannot today afford to accept increases in supplier costs or high material wastage and nor should they accept the escalating cost of sickness absence in these increasingly tough times.
Positive action to kick start a drive to curb and then reduce sickness absence is a measure that should be at the top of today's priorities for all organisations, irrespective of size and sector.
Rachel Fallding is a managing consultant, Springboard HR
