Counting the cost of relocation

With the rise of offshore outsourcing and an increasing number of American companies looking to relocate staff members to new offices and facilities across the globe, getting a handle on the cost of living in overseas locations is imperative.

Delivering benefits such as paid time off that help strengthen employee morale and encourage a more productive workforce are the mainstay of HR’s mission. However, without adequate data and analysis of illness-related absence trends, many employers are unable to uncover larger issues (such as those that reveal organizational sickness) or gain a firm grasp of how much employee absence really costs.

When employees call out sick, medical illness may not be the only reason keeping them out of the office. According to the 2005 CCH Unscheduled Absence Survey, 26 percent of unscheduled absences were attributed to entitlement mentality and stress. Gaining insight into sectors of the employee population that display unusual rates of absenteeism or patterns in absence occurrence can provide valuable information about workplace issues that are affecting productivity. Insight into absence patterns also proactively creates opportunities for HR to implement strategic initiatives that reduce absence, address management and motivational issues, and create a winning scenario for the organization.

Get the facts behind absenteeism
There are many factors that can influence absenteeism within an organization. Taking a rigorous look at absence trends can uncover patterns including certain days of the week where absence rates are most prominent (such as Fridays or Mondays) and departments that experience an elevated rate of absenteeism (due to management changes or problems), or reveal other issues in addition to illness that contribute to employees missing work (such as child care issues).

The survey also revealed that the rate of unscheduled absenteeism is twice as high at companies with poor/fair morale (3.2 percent) than those with good/very good morale (1.5 percent). The study found that employers are concerned about the impact of unscheduled absenteeism, with nearly one in three (31 percent) reporting that it is a ‘serious problem’. Improving morale may indeed lessen absence rates, but to do that employers need to understand why their employees are electing not to come to work and instead tap into their sick time. With industry research indicating that organizations with higher levels of absenteeism pay higher levels of overtime (often upwards of 20 percent) when compared to those with low absenteeism, organizations also have a vested interest in gaining control of unscheduled absences.

Best practices for data collection
Absence management is a challenge for most organizations because of the myriad leave types and the complexities of compliance. On top of the many types of employee absence – including those granted by federal and state laws as well as company policy – there are many ways in which absences can be granted and occur, such as concurrently or intermittently. In order to most effectively minimize the administrative burden as well as the risks associated with non-compliance and/or discrimination, employers may find that turning to an automated solution that delivers determination of eligibility and leave tracking is a best practice for their organization.

For organizations that opt not to invest in a vendor-provided absence management solution, taking control of absence management begins with a stepped approach to ensure that absence policies are consistent, clearly communicated and compliant with federal and state regulations. Organizations also need to make certain that they are administering absence consistently across the workforce and have a standardized approach to capturing data for each type of absence. Once organizations put the steps in place and begin to establish processes that move toward automation, the more they can speed the delivery of data and solutions.

Armed with the facts, launch programs in response
Employers who manage absence by first identifying trends can then begin to attack any problems at the root. For example, there is a range of options and benefits that management can provide to ensure a healthy and supportive workplace – from implementing training programs to onsite childcare and stress management programs – depending on the needs of the employee population. By implementing programs that are meaningful to employees, organizations can begin to minimize unscheduled absences and improve their operations.

For example, a southern Connecticut manufacturing facility managed two sister plants and an analysis of absence data revealed higher employee absences at one of the plants. Since employee demographics were equivalent at both locations, management enquiries into the reasons behind the elevated absence rate determined that a particular shift had higher incidences of unscheduled leave than any other group of line workers. Uncovering this data sparked the need for a more detailed evaluation of the department and exposed a particular manager as responsible for the elevated absence rates.

Looking at the cause (in this case poor managerial relationships) rather than the effect (employees taking excess time off from work) enabled management to rectify the problem by offering training courses to the line manager. In addition to providing skills that boosted the manager’s professional development, the company was able to improve morale within the department and reduce absence rates that ultimately increased productivity and helped the organization reach its business as well as revenue goals.

Furthermore, it’s not uncommon for companies to experience a spike in unscheduled ‘sick time’ absences during the winter months. Although employees are legitimately sick, these increased rates of absence still have a negative effect on productivity and employee morale. Arming management with this data provides a springboard for the implementation of health and wellness programs, such as an onsite clinic that offers influenza injections as well as dietary courses, which help employees remain healthy and productive. Offering programs that address wellness needs are perceived as valuable by employees and have a positive effect – not only on productivity, but also on employee retention.

Don’t let sick days become contagious
Knowing the facts behind unscheduled absences and the reasons why they occur enables employers to launch programs and offer benefits that improve the management of unscheduled absences, ultimately motivating employees, boosting morale and better aligning the workforce with long-term labor needs. When sick days are contagious, taking a proactive approach to the measurement and management of unscheduled absences and embracing best practices enables HR to make a strategic contribution to the organization. The ability to solve absence problems – and the resulting productivity issues – increases the overall health of the organization through improved employee morale and better bottom line results.