Managing your resources

Frances Davies goes in search of a remedy for employee absenteeism – and finds one in absence management programs.

Absenteeism can have an enormous effect on the productivity of an organization. The average American worker takes six days sick leave a year, and although this is significantly less than in places such as Europe it is still having a big impact on US staffing resources and productivity. The loss of productivity due to short/long-term illness, disability and caring for families is estimated to cost US businesses somewhere in the region of US$260 billion each year, and keeping sickness at bay is therefore proving to be a major headache for companies. Effective absence management programs can be the best remedy for reducing absenteeism.

Absence management is a key factor in the success of any HR department. Everyone agrees that people are an organization’s most important asset – so it is disastrous for a company when these assets are compromised due to short or long-term illness or disability. Finding replacements or delegating more work into the hands of colleagues can be inconvenient and time-consuming, plus it can put a real strain on already overworked employees.

“Every time an employee is absent from work there is a loss of productivity to the organization,” explains Sharon Kaleta, President and CEO of the Disability Management Employers Coalition (DMEC). “One person absent from work may not create a problem, but several people absent for one or more days can have a significant financial impact to the organization. Unscheduled absence costs an average of US$660 per employee – multiply that by several days and several employees and you have a significant drain on corporate profitability.”

Impact of absenteeism

There are many forms of absenteeism, ranging from short-term illness, long-term illness, unauthorized absence and persistent lateness, to other authorized absences such as annual leave, paternity leave, time off to care for dependents and compassionate leave. Other causes might also include low morale, stress and poor working conditions, many of which are preventable.

The effect absenteeism can have on a business can be wide-ranging, but particularly affects those employees left to pick up the pieces. According to Wayne Wendling, Senior Director of Research at the International Foundation of Employee Benefit Plans, the workings of a company have changed and employees are now much more interconnected than previously – and, as a result, organizations are much more dependent on their employees. “When someone is absent, the entire web of interaction among employees can be disturbed in terms of workflows and the availability of information,” he explains. “Part of that is overcome as more files are now open to people who can fill in and help with the tasks that the individual may have been performing. However, there is a definite ‘ripple effect’ through the organization when someone is unexpectedly ill. The productivity of others is also being impacted.”

And it’s not just other workers. In many instances, customers are likely to feel the effect of an absent employee, as it could cost them their key contact within a business. Clients often retain a certain loyalty to an organization if they feel they have a solid contact within the firm; losing that contact might result in the loss of custom. Wendling argues that “asking a customer if they can wait” simply isn’t as feasible as it might have been 20 years ago. It is, he says, important that organizations are in a position to respond quickly and effectively to customers needs.

Employee issues

The employee also stands to lose out. An employee could experience a loss of income and be concerned about their employment status. Furthermore, people on sick leave can feel isolated socially. “Most of us have our social interactions through the workplace,” suggests Kaleta. “When we move from that it creates a greater division that frequently leads to depression unless the employer is doing everything they can to work with the employee and medical providers to get that person back to work. Everyone prospers when the individual is able to come back to work – even on a limited assignment basis.”

Much can be done in an organization to ease high rates of absenteeism. Normally, high rates are avoidable provided an organization has in place adequate measures such as sick leave and an effective absence management program. If an employee is prepared to invest in employee health, then the benefits are likely to materialize in a number of ways.

For people with disabilities, a return to work may not seem plausible until they are fully recovered. However, there are steps that can be taken to ease people back into the workplace. For instance, a return-to-work program that can assist with an employee’s rehabilitation is the perfect solution to help an employee readjust into the working environment following a spell away due to disability or injury. A worker is given the more manageable tasks of their job to undertake, which take into consideration the nature of their disability or injury.

“We try to explain to employers that it is really not difficult to keep people at work. It is very important for corporations to understand that they don’t have to wait until a person is 100 percent fit to bring that person back into the workplace,” explains Kaleta. “Most of us don’t work at 100 percent anyway – we have headaches, backaches, etc. We are recommending to employers to be aware of transitional tasks that are available within the organization that somebody might be able to do for brief periods of time during the day. The most positive way to mitigate the exposure and the cost of having an employee absent from work is to have that employee come back – even for a short time during the day – and do very specific tasks that will not cause further injury.”

Mitigating absenteeism

Workforce injury is one major reason for absenteeism. Each day around 9000 US workers are injured at work, with an injury occurring every 1.6 minutes – resulting in millions of lost workdays annually. Again, an effective program to reduce workforce injuries and minimize disability from occurring can go some way in helping to reduce these figures. Such a program promotes safety in the workplace and clarifies the roles and responsibilities of employees and supervisors regarding the reporting of work-related injuries. Education is key to reducing the amount of injuries at work.

“Each organization will approach the development of a disability management program differently, depending on the specific needs of the organization,” says Kaleta. “Most companies start with the coordination of case management and return to work activities associated with workers’ compensation and short/long-term disability. Today we are seeing a movement to also include coordination of healthcare programs along with behavioral and disease management programs.”

One way of mitigating absenteeism is by deploying an absence management program. These vary in complexity, but have the basic role of monitoring absenteeism throughout an organization. “Absence management programs vary in what they can do; most basic programs will record absence and enable data to be produced, allowing the employer to measure the absence and the effect any interventions may have,” explains Kate Bawden, Associate of Health Management Consulting at Mercer Human Resource Consulting.

“The more sophisticated programs will respond to preset triggers such as sickness reasons and/or number of days absence. This will flag the need for certain actions to take place, such as a contact phone call from the line manager and/or a referral to the occupational health department. The best programs manage the contact between the individual, occupational health, their line manager and human resources.”

Actively managing absenteeism

This kind of system, Bawden suggests, makes it possible for an organization to actively manage absenteeism and minimize the amount of time individuals are away from work. It will enable a company to measure absenteeism and understand how much productivity is being lost and how this can be rectified. An effective program will enable the company to identify who is available for work, allowing them to plan their workflow. A further key benefit is the provision to manage frequent short-term absenteeism, which is the predominate form of absence.

Such programs also address the problems associated with the traditional ‘bucketing’ of different absences. According to Wendling, organizations have historically created ‘buckets’ to slot the different forms into. “If an employee is out for a day or two then we put things into one bucket,” he explains. “If somebody has an illness that takes them out of work for say, two weeks, then we put things in another bucket. This is typically called short-term disability or sick leave. If someone is seriously ill then we put things into a third bucket and refer to them as long-term disability.” Further buckets include worker compensation for when someone is injured on the job, and a bucket for unpaid leave such as the birth of a child.

Whilst a popular approach, using buckets for absences can be fairly ineffectual due to a lack of transparency within the HR department. Wendling suggests that people can also be treated differently depending on what bucket they were put in. For example, a short-term disability may turn into a long-term disability. However, the people managing long-term disability may be unaware of this until the employee presents his or herself, possibly after they had exhausted the short-term disability period. With more insight into the employee’s situation, these managers might have been able to foresee if this status was going to develop and change. “You literally have two separate illnesses as opposed to a continuum,” Wendling suggests. “If it is treated as a continuum then the results are likely to be better for all involved.”

An absence management program can eliminate the need to separate into different buckets. Instead, a company will need just one, ensuring greater consistency. “For example, you won’t have a person on worker compensation (due to workplace injury) being treated differently to somebody who has a short-term disability, even though the injury is very similar,” adds Wendling.

Working well

There are many measures that an employer can take to help mitigate the rippling effects of absenteeism on the workforce. Sometimes it really is the little things that make the most difference. Allowing employees to visit doctors and dentists, health surveillance, health education and stress management interventions are all good examples. An employer who fosters a supportive workplace when it comes to health is likely to put themselves at an advantage. “Once they are measuring absence and then reducing it, they will find that a fitter workforce will perform better and productivity will increase – giving them a competitive edge in any business environment,” enthuses Bawden.

One of the most effective ways to combat absenteeism, however, is to maintain a happy working environment where people actually enjoy coming to work. “Have a workplace that people love to come to work in and they feel they are doing something meaningful,” Wendling recommends.

Although not always preventable, absenteeism is something that can be mitigated to a certain degree, and absence management programs can definitely help. Fostering a caring working environment where workers are supported during any illness or disability can only work in the favor of the company – and ensures that work isn’t something for employees to be sick of.