Employee Absenteeism - A Guide to Managing Absence

Transcription

Employee Absenteeism
A Guide to Managing Absence
IBEC | the Irish Business and Employers Confederation
www.ibec.ie/research
IBEC is the voice of Irish business and employers both nationally and internationally. It is the umbrella body
for Ireland’s leading business and industry groups and associations. IBEC represents more than
7,500 member organisations, of all sizes, in all regions and across all industry sectors.
With acknowledged expertise in all aspects of business representation, policy development, employee relations,
human resources, employment law, environment, health and safety, trade and EU affairs, IBEC is uniquely
positioned to provide indispensible, tailored advice to members. To learn more, contact IBEC on www.ibec.ie
IBEC MISSION
IBEC promotes the interests of business and employers in Ireland by working to foster
the continuing development of a competitive environment that encourages sustainable
growth, and within which both enterprise and people can flourish.
Employee
Absenteeism
A Guide to
Managing Absence
July 2011
A Guide to Managing Absence 2011
Table of Contents
FOREWORD
4
INTRODUCTION
5
RESEARCH METHODOLOGY /NOTES ON INTERPRETATION OF DATA
6
Participant profile
DEFINING/MEASURING ABSENCE AND ABSENCE RATES
8
Number of spells or frequency of absence
9
The Bradford Score
9
Calculating the Bradford Score
9
Monitoring when absence occurs
10
Absence rates
10
Number of days lost per employee
12
RECORDING ABSENCE/ATTENDANCE
13
Methods of recording absence
14
Use of biometric data
14
Case study on use of biometric data
15
Who should record absence?
16
Defining problem absence
16
Absence triggers
16
COST OF ABSENCE
2 | IBEC Research Unit
6
18
Components of the cost of absence
18
Checklist for calculating the cost of absence
19
Actual cost of absence (€)
20
ABSENCE MANAGEMENT STRATEGIES
21
Sick pay and absence
21
Restricting sick pay
21
Fit note
21
Attendance bonus
22
HEALTH EDUCATION/WELLNESS PROGRAMMES
23
Flexible working arrangements and absence
23
Return to work interviews
24
CAUSES OF ABSENCE
26
SHORT-TERM ABSENCE
27
Causes of short-term absence
27
Management of short-term absence
28
LONG-TERM ABSENCE
30
Causes of long-term absence
30
Long-term absence strategy
32
Rehabilitation/reintegration
32
Mental health & absence
33
Work-related stress & absence
35
THE ROLE OF THE LINE MANAGER IN ABSENCE MANAGEMENT
37
THE ROLE OF HR IN ABSENCE MANAGEMENT
39
ABSENCE MANAGEMENT POLICIES
40
CASE STUDIES
41
SAMPLE ATTENDANCE POLICY
49
IBEC Research Unit | 3
Foreword
As businesses operating in Ireland face continuing challenges on reducing costs, the area of absence
management is one which has received a significant amount of focus in the last few years. Problem
absence can present a significant direct cost to employers, as well as potentially creating additional
costs that are more difficult to quantify, for example, the cost of reduced quality of output, increased
pressure on colleagues and increased administration time in replacing absent employees. This survey
of over 600 companies, carried out during 2010, conservatively estimates the cost of absence in
Ireland per year to be in the region of €1.5 billion.
The 2009 absence rate found in this survey (2.58%) is lower than in our last guideline on absence
produced in 2004(3.38%), and amounts to an average of 5.98 days per employee per year. This report
evidences the positive impact on absence rates of an improved management focus. However, it would
seem that some work remains to be done: over a quarter of respondents indicate that it would be
possible for them to reduce their absence rate further.
In an effort to reduce absence rates, this report would suggest that in addition to measures such as
recording absence data, holding return to work interviews and providing absence data to line managers,
employers are increasingly putting in place employee health and wellbeing supports. Over one in five
respondent companies provide a counselling service to employees, and around one in ten organise
health education programmes. However, the actual effect of these programmes on either short- or
long-term absence is unclear. The potential impact of this type of initiative may lie in its ability to
reduce absence rates over a longer term, or to work in combination with other methods to provide an
effective method of improving employee attendance.
The research unit are grateful, as always, to our member companies who took the time to provide
us with extensive information around their approaches to absence, and without whom this report
would not have been possible. A special word of thanks is due to the companies that provided us with
additional detailed case study material.
We are grateful also to a number of IBEC staff who gave generously of their time and expertise
in putting this report together, in particular to Helen Fitzgerald, Kara McGann, Rhona Murphy and
Lorraine Parkes. We would also like to recognise the efforts of our research team and in particular,
Geraldine Anderson, who authored this report.
We hope you find this report useful.
Brendan Butler
Director of Policy and International Affairs
Introduction
Data from the IBEC quarterly business sentiment survey, as well as anecdotal
evidence, would suggest that the focus on absence management is increasing in
member companies. An awareness of the cost incurred by absent employees, as well
as the imperative for employers to be responsible and to have a duty of care for their
employees are both driving an increased engagement by companies in this area.
This report provides guidance in identifying and dealing with problem absence. The
report explores the potential cost of absence to employers, as well as providing
recommendations on how both short-term and long-term absence can be managed.
The report also examines the role of human resource professionals, highlighting the
various approaches taken by our survey respondents, and paying particular attention
to the co-ordinating role of HR professionals in relation to the ongoing monitoring and
reporting of absence.
This report acknowledges the enhanced role of the line manager in dealing with
employee attendance, and explores the areas in which line managers can be most
effective in the management of absence within companies.
Employers, no matter what their size, or area of activity, will be interested in the
findings of this survey, and will be supported in their endeavours by the practical
guidance and support contained in this report.
RESEARCH METHODOLOGY /NOTES ON
INTERPRETATION OF DATA
Survey data was collected from a total of 635 companies across all pay surveys
undertaken by IBEC in 2010. These surveys covered the manufacturing, wholesale
distribution, retail, financial services, contact centres, and software sectors. The
companies included in this report employed a total of 114,025 employees, and were
based in the Republic of Ireland.
It is worth noting that some care should be taken in comparing 2010 results to our
previous report on absence in 2003, as results are drawn from a different sample and
are not, therefore, directly comparable.
PARTICIPANT PROFILE
Over half the respondent companies to the survey had less than 50 employees, while
one in seven respondents employed over 250 staff. Full details are set out in table 1
below.
Table 1: Company size
Company size
No. (%) of organisations
No. (%) of employees
<50 employees
366 (58%)
7,675 (7%)
50 – 99 employees
91 (14%)
6,477 (6%)
100 – 249 employees
92 (15%)
14,852 (13%)
44 (7%)
15,637 (14%)
Over 500 employees
42 (7%)
69,384 (61%)
Total
635 (100%)
114,025 (100%)
While there was a spread of responses across sectors, almost one in five responses
(18%) were from the wholesale distribution/transport sector. High-tech manufacturing
accounted for 16% of respondent companies, while other services accounted for 15%.
Table 2 overleaf sets out the full details.
Table 2: Sector
Sector
No. (%) of
employees
Manufacture of food/drink/tobacco
44(7%)
7,629 (7%)
High-tech manufacturing
100 (16%)
23,281 (20%)
Manufacture of rubber and plastics
25 (4%)
1,708 (1%)
Manufacture of metals/engineering
59 (9%)
4,290 (4%)
Other manufacturing
52 (8%)
3,898 (3%)
Wholesale distribution/ Transport
116 (18%)
22,944 (20%)
Contact centres
15 (2%)
5,355 (5%)
Retail
54 (9%)
20,562 (18%)
Software services
38 (6%)
5,923 (5%)
Financial services
36 (6%)
15,255 (13%)
Other services
96 (15%)
3,180 (3%)
Total
635 (100%)
114,025 (100%)
No. (%) of
employees
Dublin
291 (46%)
70,928 (62%)
Cork
59 (9%)
11,066 (10%)
West
44 (7%)
6,067 (5%)
Mid-West
51 (8%)
6,202 (5%)
South-East
69 (11%)
8,765 (8%)
North-West
31 (5%)
3,062 (3%)
North-East
38 (6%)
3,037 (3%)
Wicklow
12 (2%)
771 (1%)
Kildare
17 (3%)
1,478 (1%)
Midlands
23 (4%)
2,649 (2%)
Total
635 (100%)
114,025 (100%)
Table 3: Location
Almost half the respondents to the survey were based in the Dublin region. However,
there was a good spread of responses in areas outside Dublin also, with for example,
the south-east accounting for over one in ten responses. Additionally, the Cork region,
the Mid-west and the West accounted for almost a quarter of responses between them.
Table 3 above sets out the full details.
DEFINING/MEASURING ABSENCE AND
ABSENCE RATES
Absence can be defined as ‘unscheduled disruption of the work process due to days lost as
a result of sickness or any other cause not excused through statutory entitlements or company
approval’.
Under this definition, the following are not included as absence:
•
Statutory leave i.e. annual leave and public holidays, maternity leave, parental
leave, force majeure, carer’s leave;
•
Days lost due to strikes and lay-off; and
•
Excused leave such as bereavement leave, exam/study leave, marriage and
paternity leave.
•
For the purposes of comparability respondents to the survey were asked to
calculate their absence rate using the following formula:
TOTAL DAYS LOST =
Number of days absence in period under investigation
X 100
(total number of employees) x (total number of work days available)
The above formula has some limitations in that the average absence rate can relate
to few absences of longer duration, or several shorter absences, or a combination of
the two. As a result, an absence rate can remain relatively stable over time even if the
underlying absence behaviour has changed. In order to uncover underlying absence
trends and patterns, a more exact measure of the extent and nature of the absence
problem may be required. Measures of absence frequency can provide a better
indicator of short-term absence than the absence rate on its own and may be a more
valuable measure in planning absence control. Three measures of absence frequency
are important to consider, in addition to the average absence rate:
•
The average number of days lost per employee per annum;
i.e. the total number of days lost divided by the total number of employees.
•
The individual spells of absence or the frequency rate;
i.e. the total number of spells divided by the total number of employees.
•
The average duration of an absence spell.
i.e. the total number of days lost divided by the number of spells of absence.
NUMBER OF SPELLS OR FREQUENCY OF ABSENCE
A spell is an unbroken period of time off, amounting to anything from a day to a year or
more. The calculation of spells enables us to determine the frequency and duration of
absences, that is, the number of occasions on which people are absent and the number
of days they are inclined to be away. Knowing the number of spells of absence can help
in identifying potential problem absence, where several short spells of absence may be
occurring. A useful tool in measuring both the frequency and duration of absences is
the Bradford score, outlined below.
THE BRADFORD SCORE
In many organisations, particularly where the majority of staff work shifts and rotas,
the disruption caused by frequent short-term absences is often greater than that
caused by occasional longer term absences. By their nature, short-term absences are
more difficult to predict and their unexpected nature makes them difficult to plan for.
The Bradford score combines both frequency and duration as measures of absence.
These scores indicate the composition of an individual’s absence record, comprising a
few, or many, spells of short or long duration. This method of monitoring absenteeism
weights the score in such a way as to identify those with a number of short spells of
absence which require management attention. The Bradford score system helps to
ensure that there is consistency in management’s approach to dealing with absence
problems. It can be used to monitor trends in sickness absence and is one way to
provide ‘trigger’ points. The area of absence triggers will be explored subsequently in
this report. However, it is worth noting at this point that the Bradford score, while a
useful tool to provide insights into absence patterns, should not be used in isolation to
trigger a management response to absence.
CALCULATING THE BRADFORD SCORE
The Bradford score is calculated by multiplying the square of the number of absences
by the total number of working days lost. For example, someone who was absent from
work on five occasions with a total of 14 working days off work would have a Bradford
score of 5x5x14=350.
The formula is as follows:(S x S x D) or (S2 x D)
Where S = number of spells of absence in last 52 weeks (or other relevant period of
time)
D = total number of days of absence in the last 52 weeks (or other relevant period of
time).
Example
An employee has four episodes each of three days in the last 52 weeks.
(S x S x D) or (S2 x D) = Bradford Score
S = 4 (i.e. number of absences),
D = 12 (i.e. the total number of days absence in the period)
4 x 4 x 12 = 192
Staff with more frequent absences will achieve higher scores and, therefore, receive
more attention under this approach.
MONITORING WHEN ABSENCE OCCURS
General examination of absence data will provide some information on when absence
occurs and allow a pattern to be identified in terms of when absences are taking place.
Among respondents to the IBEC survey, some 37% monitor/identify when absences
tend to occur. Of these, almost three quarters (74%) identify absences that straddle
the weekend i.e. Monday/Friday absences. Among those that identify such absence, on
average, Monday/Friday absence accounts for just over a quarter (26%) of all shortterm absence. Over two out of five companies (42%) that monitor this type of absence
have taken measures to address the problem.
ABSENCE RATES
Some 502 companies provided information in relation to their absence rate for the full
year 2009. The average rate of absence was 2.58%, with a median of 2.0%. Of these
502 companies, 51% had an absence rate of less than 2%. Some 21% of companies
indicated an absence rate of between two and three per cent and 28% a rate of over
3%.
Larger companies, on average, reported higher absence rates and companies with
fewer than 50 employees generally reported lower rates. For smaller companies, the
average absence rate was 2.17%, while for companies with over 500 employees, the
average annual absence rate was 3.58%.
The IBEC survey covered responses from manufacturing, wholesale distribution
companies as well as software, contact centres, financial services and retail companies.
Across sectors, the highest average absence was recorded in contact centres (3.67%)
with the lowest average rate occurring in the software services sector (1.56%). Full
details of absence rates by sector and company size are set out in tables 4 - 5 below.
Table 4: Average absence rate by company size (2009)
Company size
Average Absence Rate (%)
Median Absence Rate (%)
<50 employees
2.17%
1.80%
50 – 99 employees
2.85%
2.40%
3.06%
2.76%
3.46%
3.36%
Over 500 employees
3.58%
3.27%
Total (N=502)
2.58%
2.00%
Table 5: Average absence rate by sector (2009)
Sector
Average Absence Rate
(%)
Median Absence Rate
(%)
Manufacture of
food/drink/tobacco
3.29%
2.86%
High-tech manufacturing
2.99%
2.50%
Manufacture of rubber and
plastics
3.27%
3.00%
Manufacture of
metals/engineering
3.23%
2.68%
Other manufacturing
2.95%
2.89%
Wholesale
distribution/ Transport
2.09%
1.50%
Contact centres
3.67%
3.50%
Retail
2.06%
1.94%
Software services
1.56%
1.26%
Financial services
2.43%
1.90%
Other services
2.17%
2.00%
Total (N=502)
2.58%
2.00%
NUMBER OF DAYS LOST PER EMPLOYEE
The average number of days work lost per employee averaged at 5.98 days across 502
respondent companies. When we extrapolate this figure to the economy generally, the
total cost to the economy of days lost through absence was around 11 million days.
Given the difference between the highest and lowest rates of absence recorded by the
survey respondents, it would seem from an objective point of view that there is scope
to improve absence rates among the respondent companies, in general. Individually,
some 27% of respondents to the IBEC survey felt that it would be possible for them to
reduce their absence rate.
Long-term absence, which will be explored in detail in a later chapter, accounted for
23% of all absence days.
It is worth noting that not all absence is problem absence. When employees are ill,
they are generally being responsible in remaining home from work in order to allow
themselves time to recover and prevent the spread of illness to work colleagues.
However, some monitoring of the reasons for absence, the frequency of spells
of absence and the duration of absences, as well as when absences occur i.e. does
absence straddle a weekend for example, or take place at bank holidays or other
holiday periods, can provide insight into absence patterns. This can be of immense
benefit in determining if an absence problem exists within the company.
RECORDING ABSENCE/ATTENDANCE
Understanding the dimensions of an absence problem is essential. Without putting
in place measures to monitor and record absence/attendance, companies will find it
difficult to understand if a problem exists and/or the extent and cost of the problem.
Monitoring absence allows companies to answer such simple questions as:
•
Who is absent?
•
Why?
•
When?
•
How often?
•
Is the absence certified by a doctor or uncertified?
Keeping a record of absence sends out a message to employees that attendance is a
priority in the workforce and that failure to attend for work will be noticed. If records
are not kept, there may be a perception that some level of absence is tolerated within
the company. The availability of attendance or absence records further allows a
company to benchmark either across divisions, company locations or against rates
set either internally or by corporate headquarters. A record of absence can establish
patterns of poor attendance for example,
•
With particular employees
•
With particular departments
•
With particular work patterns, e.g. particular shifts
•
At different skill levels
•
At particular times
•
With types of absence (i.e. long-term or short-term)
Recording absence additionally allows targets to be set. Where a uniform attendance
standard or target rate is defined for all employees, it becomes easier to identify cases
that deviate from the standard or normal position. At the same time it can provide
an imperative for supervisors or managers to deal with absence abuse, as with an
objective measure and analysis tool in place, taking action against problem absence
becomes more easily done.
Within the IBEC survey 78% of employers indicate that they record absence. Some
74% of these companies record absence on a formal basis and 23% on an informal
basis. Almost all, (95%) of companies with over 500 employees indicate that they
record absence (the remaining 5% did not provide details). For smaller companies, i.e.
less than 50 employees, seven out of ten companies in this category indicated that
they record absence (25% did not provide details). By sector, high tech and financial
services sectors were more likely to record absence with 97% of software services
companies and 92% of financial services companies recording absence. Some 88% of
high tech manufacturing companies recorded absence.
METHODS OF RECORDING ABSENCE
There are a number of methods of recording absence:
•
Manually (e.g. through the manual completion of absence record cards, time
sheets, diaries or sign-in books);
•
Mechanically (e.g. a clock-in system);
•
Computerised system; or
•
Spreadsheet (manual or computerised)
Additionally the use of biometrics is also becoming a feature in the current survey with
1% of employees indicating that they use fingerprint or other biometric information
to register attendance. Employers considering the introduction of biometrics are
encouraged to take legal advice in relation to data protection issues which may arise.
In the IBEC survey, differentiation was made between categories of employee in
relation to how absence was recorded. Many of the companies in the survey did
not employ manual grades and this creates some difficulty in comparing manual
categories to other categories of employee. However it would seem that for manual
grades, computerised recording of absence was more common than manual systems.
For staff and management categories however, manual systems were still more widely
used than computerised systems. In the case of staff, manual recording occurred
in 40% of respondent companies with computerised recording in 30%. In the case
of management, manual recording occurred in 37% of respondent companies, with
computerised recording in 26%. Very few companies, less than 1% across all categories
of employee used spreadsheets to record absence.
USE OF BIOMETRIC DATA
A small proportion of survey respondents (1%) indicated that they used methods such
as fingerprinting, retinal scans or iris recognition software to record attendance. There
are some specific considerations in relation to the use of this method, outlined below.
Biometrics are used by companies as identification systems, which confirm the identity
of an individual; or as authentication/verification systems. Secure storage of this data
is a key consideration for companies that use biometrics. Companies need to ensure
that they have appropriate security measures in place to prevent unauthorized access,
alteration, disclosure or destruction of the data held.
In deciding to use biometric systems companies need to ensure that the data was
fairly obtained and processed, particularly in the case of sensitive data. They also need
to ensure that the information held is proportionate and not seen to be excessive.
The Data Protection Commissioners provide guidance notes on the use of biometric
systems and examine a number of factors to determine what would be seen to be
excessive, these include:
•
The nature of the workplace;
•
Purpose of the system, is there a less intrusive method?
•
Efficiency of the system;
•
Reliability;
•
Accuracy;
•
Transparency.
The Data Protection Commissioners advise companies thinking of introducing such as
system to conduct a privacy impact assessment. Further details on a privacy impact
assessment can be found on the website of the Data Protection Commissioners
www.dataprotection.ie
CASE STUDY ON USE OF BIOMETRIC DATA
In case study 1 of 2005, available on the website of the Data Commissioner1, a number
of employees at a public institution complained about the use of a biometric time and
attendance system, stating that it was ‘an unreasonable intrusion of their privacy’.
The issue examined by the Commissioner was whether or not the use of a biometric
system for this purpose, which involved data being stored on a central database, was
proportionate.
The company said that the biometric system was the outcome of a security review
process. The Commissioner established that the data collected was held in encrypted
code and was derived from a person’s finger. This template was then used for future
authentication. The company stressed that, as a reader was used, no picture of a
fingerprint was formed and so this could not be used to re-generate a fingerprint.
The Commissioner looked at the concerns of management regarding physical
security of the premises and unauthorized access to restricted areas. It also took into
consideration the features of the biometric system. It was found that the system was
proportionate and did not constitute an unjustified interference with the privacy of the
employees.
1
www.dataprotection.ie
WHO SHOULD RECORD ABSENCE?
According to the IBEC survey, the line manager records the initial absence in over a
third of respondent companies (36%). However the initial recording of absence was
centralised in just under one third of respondent companies (32%). Following on from
the initial absence record, over half the respondent companies (52%) indicated that
subsequent data recording was centralised. One in ten companies indicated that line
managers were responsible for recording absence information after the initial absence.
As the first point of contact with the employee the line manager is often best placed to
notice the individual’s absence. The line manager may also be more likely to be aware
of issues relating to the individual and may be in a good position to form a view on
whether or not the absence is genuine.
Having the line manager record absence, however, can also create difficulties where a
standard approach is not implemented across departments. This may result in some
managers implementing the policy in great detail, while others do not. This could
give rise to unfairness within the system, as employees may feel that they are being
unfairly held to higher standards than colleagues. A detailed look at the role of the line
manager in absence management occurs later in this report.
DEFINING PROBLEM ABSENCE
Once monitoring systems are put in place to identify absence, spells and patterns
of absence, the system then requires an objective judgement on whether particular
absence amounts to a problem absence or not. The appropriate use of absence
‘triggers’ can be helpful in this regard.
ABSENCE TRIGGERS
Absence triggers are an increasingly common way of helping to identify where and
when action on attendance is needed. In order to do this the attendance record of
individual employees may be monitored against set criteria. This allows the company
to identify whether or not the level and/or pattern of individual absence is acceptable.
The company may use ‘triggers’ to identify areas of concern.
Triggers fall into two broad categories:
•
Informal arrangements where periodic reviews of an employee’s sickness
absence pattern are undertaken. It is left to the manager to determine whether
any action is required.
•
More tightly specified absence thresholds, used by some employers to identify
when managers should introduce a formal review, counselling, refer to
occupational health, or take disciplinary action.
Typical triggers may be:
•
cumulative days absence in a set period;
•
number of spells in a set period;
•
combinations of days and spells;
•
pattern-related.
COST OF ABSENCE
Few organisations have mechanisms in place to measure the cost of absence and where
they exist relatively few companies examine the findings systematically. Around a
quarter of the respondents to this survey (24%) calculate the cost of absence, either
formally (64%) or informally (36%). The CIPD study of UK absence in 2010 found that
fewer than half the respondents to their survey (45%) monitor the cost of absence.
This was a slight increase on the comparative figure of 41% in 2009.2
COMPONENTS OF THE COST OF ABSENCE
The most widely recorded components of the cost of absence are direct costs, including
the cost of sick pay, followed by replacement for employee, medical referrals and
overtime. While it is more difficult to quantify the indirect costs of absence, some effort
here is useful in that it allows a more realistic picture of the actual cost of absence to
be developed. Companies in the recent IBEC survey were more likely to include only
direct costs (in particular the company sick pay scheme) as opposed to indirect costs.
(See Table 6 below.) Notwithstanding this, the survey shows an increase compared
with earlier surveys, in the proportion of companies examining administration/HR
time in managing absence and/or increased work pressure on colleagues.
Table 6: Costs included in calculating the cost of absence.
Absence cost components
Percentage of Companies
Direct costs
Company sick pay scheme
66
Replacement for employee
34
Overtime
28
Medical referrals
30
Effect on productivity
32
Effect on quality
14
Admin/HR time in managing absence
21
Increased work pressure on colleagues
22
Other costs
1
Indirect costs
TOTAL
2
CIPD, (2010) ‘Absence Management – Annual Survey Report 2010’, UK, p.13
161 (100%)
Costs can be increased several times over by the repercussions of absence on other
employees. Issues such as lowered morale, delays in work processes, idle machines etc
all incur costs to the company, even though some of these costs may be difficult to
quantify. Dilts, Deitsch & Paul3 describe the implicit costs of absenteeism as affecting
‘in domino fashion such intangibles as employee morale, discipline and job satisfaction
which in turn, increases labour turnover and reduces worker productivity, thereby
reducing product quality and making product scheduling more difficult.’
The following table outlines a series of items that potentially could be included in
calculating the cost of absence. Both direct and indirect cost items are included on the
following list.
CHECKLIST FOR CALCULATING THE COST OF ABSENCE
1
Direct Costs of Absence (Annual)
1.1 Occupational Sick Pay
1.2 Continued payment of fringe benefits during absence
1.3 Overtime payments for those filling in for absentees
1.4 Overtime payments for employees later down the line which arise out of absence
1.5 Excess cost of temporary staff (e.g. employment agency fee)
1.6 Overstaffing to cover for absence (weekly wage plus employment cost x number of extra staff x 52)
2 Indirect Costs of Absence (Annual)
2.1 Cost of recruiting and training extra staff (cost per person x number of persons)
2.2 Cost of management/supervisory time devoted to dealing with absence-related issues, e.g. revising schedules,
disciplining, record keeping, counselling, etc. (hours devoted per week x hourly rate x 52)
2.3 Reduced productivity from work being done by less experienced/more tired employees, from returning workers
operating at lower point in learning curve (excess hours per annum required to achieve standard output x hourly
pay rate, or lost output per annum x profit contribution per unit of output)
2.4 Lower product quality of work due to replacement of staff, cost of rejects, i.e. cost of scrap materials and cost
of re-work, i.e. materials and labour costs to put things right and cost of extra premiums to maintain saleable
volume (e.g. extra overtime to make up the volume).
2.5 Cost of disruptions/section shutdown due to absenteeism; estimate of profit foregone by lost production or
financial penalty incurred due to late delivery; cost of feeding other parts of the company.
2.6 Extra costs incurred to meet slipped deadline (e.g. freighted by air instead of sea.)
2.7 Loss of customers due to failure to meet deadline or to inferior product quality (last financial year) – profit loss
from customers who did not re-order as expected (when this can be related to absence)
2.8 Low morale amongst other staff caused by lax attendance of certain employees (lateness, turnover, failure to
work at measured standard performance).
2.9 Cost of absence monitoring equipment and staff. Estimate the cost involved in equipment purchase or hire, and
wages and employment costs of staff.
2.10 Insert any other calculations relevant to your organisation
Cost p.a. Grand TOTAL €
Source: Huczynski, A. and Fitzpatrick, M. (1989) Modified from Table 1: Calculating the Trues Cost of Absence
‘End the Mystery: Calculating the true cost of employee absence’. Employee Relations Vol. 11, No. 6. 12-15
3
Dilts, D.A., Deitsch, C.R. and Paul, R.J. (1985) ‘Getting Absent Workers Back on the Job – An Analytical Approach.’ p21 Quorum
Books: Connecticut
ACTUAL COST OF ABSENCE (€)
In terms of actual costs, only 10% of companies in the IBEC study provided information.
On average, the cost per employee in these companies was €818 euro per employee,
per annum, which is a slightly lower figure than that recorded in the 2003 report. If we
take this figure of €818 per employee and project it to include all those in employment
in the same period, we find that the total cost of absence per annum is around €1.5bn.
In the UK, the Confederation of British Industry (CBI) found that the average direct
cost of absence per employee was £595 – approximately €675, with a total loss to the
economy of £16.8bn in 2009.4 Also in the UK, the Chartered Institute of Personnel
Development (CIPD) found a very similar cost of absence among respondents to its
survey, conducted in 2010. According to the CIPD, the median cost of absence per
employee was £600, approximately €681.5
4
CBI/Pfizer, (2010), ‘On the Path to Recovery: Absence and Workplace Health Survey 2010’, UK, p14.
5
CIPD, (2010) ‘Absence Management – Annual Survey Report 2010’, UK, p.13
ABSENCE MANAGEMENT STRATEGIES
SICK PAY AND ABSENCE
There is occasionally a perception that the existence of a sick pay scheme can
encourage absence as some employees may see the existence of such a scheme as a
licence for absence. In the case of the IBEC survey, there was a slight difference in the
level of absence in companies with a sick pay scheme. The average absence for those
with a sick pay scheme in place was 2.73%, while the lower average rate of 2.13% was
recorded in companies that did not operate sick pay schemes for employees. Almost
two-thirds (66%) of respondents to the IBEC survey had a sick pay scheme in place.
RESTRICTING SICK PAY
Where there is a sick pay scheme in operation, employees are guaranteed some
payment in the event of illness. This is designed to provide employees with some
protection in times when they cannot work due to illness. The existence of a sick pay
scheme is sometimes considered to be a contributory factor to short-term absence,
or even to encourage it. This is due to the way some schemes are managed, with
employees feeling ‘entitled’ to take a certain number of days casual absence per
annum. The restriction of sick pay is generally part of the control mechanism built into
a scheme and consists of either:
•
Restricting the number of paid days casual absence in a given period of time, or
•
Suspension from benefit where abuse of the scheme has been proven or where
the absent employee has failed to comply with the rules of the organisation’s
sick pay scheme.
•
Retaining an element of discretion as to when sick pay may be impeded.
FIT NOTE
In the UK from April 6th 2010, the sick note was replaced with a ‘fit note’. The essential
difference is that on the ‘fit note’ a GP can advise that the employee is ‘not fit for work’
or that they ‘may be fit for work’ under certain conditions, for example,
•
If they return to work gradually, for example, by starting part-time
•
If they can work different hours temporarily
•
If they can perform different duties or tasks
•
If they have additional support to do their job, for example, if they have back
pain, avoiding heavy lifting
On the ‘fit note’ the GP can also give general information around the individual’s illness
and how it may affect his/her ability to work.
On foot of the provision of a ‘fit note’, the employee and employer can then discuss
how best to proceed, deciding on what support the employer can give to ensure that
the employee can return to work as soon as possible.
ATTENDANCE BONUS
Employers can consider rewarding employees who have an excellent, or near excellent,
attendance record with an attendance bonus. However, there are some disadvantages
surrounding attendance bonuses in that over time they can lose their effectiveness, or
alternatively, they are not at a high enough level to encourage increased attendance.
A further argument against this approach is that the employees who gain the bonuses
tend to be the people that would have attended work anyway.
An additional consideration for employers is that employment equality issues may
arise, and legal advice should be sought if you are considering the introduction of such
a bonus.
In relation to the management of short-term absence, attendance bonuses were used
in only 15% of respondent companies.
The option of non-cash incentives can also be considered by organisations. These can
be awarded on an individual or team basis.
HEALTH EDUCATION/WELLNESS
PROGRAMMES
In an attempt to reduce the levels of employee sickness, employers can try to improve
and promote the health and well-being of their employees through offering occupational
health services, supporting health promotion activities, and, in some cases, employee
assistance programmes (EAPs). These types of services can include:
•
Stress workshops
•
Back pain treatment
•
Blood pressure measurement
•
Physical activity assessment
•
Body fat and healthy eating analysis
•
Smoking and alcohol assessment
•
Good use of VDU and work station design
•
A confidential counselling service (generally covered under an EAP).
From a recent (2010) IBEC survey of Human Resource Management practices in
member companies, over one-third of respondents6 had engaged in employee health
screening in the 12 months preceding the survey. Almost one in five (18%) had had
a stress management campaign and just over one in ten (11%) had held a mental
wellbeing campaign in the previous year. While these results relate to companies with
reasonably advanced HR practices in operation, it would seem evident that company
engagement in this area is becoming significant.
FLEXIBLE WORKING ARRANGEMENTS AND ABSENCE
Much has been written about flexible working arrangements and their impact on absence
levels. It is argued that if employees have flexibility in their working arrangements,
they will be better able to reconcile personal, family and work responsibilities and
thus will not need to take time off work to deal with these issues. These types of
arrangements, it is suggested, bring benefits to both employees and to the company in
terms of increased morale and higher productivity.
Over six out of ten companies in the IBEC survey (62%) stated that they had some
form of flexible working in place. The overall existence of these types of arrangements,
however, did not appear to be associated with a lower absence rate. Overall, companies
6 The IBEC HRM survey was conducted during October/November 2010, and provides a comprehensive overview of HR policies and
practices in respondent companies. A total of 228 companies took part, from manufacturing, distribution and services sectors.
operating flexible work systems recorded a slightly higher average absence rate of
2.72%, compared with 2.36% in companies where flexible work arrangements are not
in place.
However, across various flexible work types, the results vary somewhat. For companies
with home or tele-working five days per week, the absence rate was lower at 2.08%,
than for those companies that did not operate it (2.73%). Similarly for companies that
operated home working one or two days per week, their average absence rate was
2.38%, compared with 2.80% in companies without such an arrangement. Flexi-time
also seemed to have a slight effect in that the absence rate for companies with flexitime in operation was 2.58% and 2.77% for companies that did not operate flexi-time.
Companies operating shift, have an almost 1% higher absence rate than those who do
not operate shift systems. Companies operating part-time work also report a higher
average absence rate of 2.77% compared with 2.56% in companies where part-time
working is not in operation.
It is worth noting that the absence rate within companies may be influenced by factors
other than the existence or otherwise of these arrangements. However, it would seem
that the above provides some evidence that the type of flexible working arrangement
in place may affect absence rates.
RETURN TO WORK INTERVIEWS
Return to work interviews are an extremely useful tool in dealing with employee
absence. According to the CIPD study7 findings, return to work interviews are regarded
as one of the most effective tools for managing short-term absence. The return to
work discussion gives the line manager/supervisor an opportunity to welcome the job
holder back to work. This interview also enables a check to be made that the employee
is well enough to return to work. The necessary paperwork can be completed, so that
the absence and its conclusion are properly recorded. Additionally, the fact that an
established procedure is in place to investigate and discuss absence with an employee
may act as a deterrent for non-attendance on foot of disingenuous reasons.
In order for return to work interviews to be successful, a number of criteria need to be
borne in mind.
•
Interviews should be carried out as promptly as possible following the absentee’s
return to work
7 CIPD, (2010) ‘Absence Management – Annual Survey Report 2010’, UK, p.5
•
The employee should be welcomed back to work and given an opportunity to
discuss the reasons for his/her absence.
•
If the absence is part of a pattern of absence, the interviewer should explore any
particular issues that the employee may have which are leading to absence.
•
Should the interviewer have reason to believe that the absence forms part of an
ongoing pattern of absence, and/or constitutes a problem absence the interview
offers an opportunity to raise this with the individual concerned.
•
If the problem absence is part of an ongoing pattern, then the interviewer
should consider whether the pattern of absence may be due to an ongoing
disability, within the meaning of the Employment Equality Acts 1998 - 2008 or,
alternatively, outline any action that may be taken for example, invoking the
disciplinary procedure, or issuing of verbal or written warnings.
•
The manager can also, as part of this interview, outline the effect of the
individual’s absence on the department, i.e. what arrangements were in place
during the absence and explain any changes in work practices that might have
occurred while the employee was absent.
•
The supervisor/line manager should then brief the returning employee about the
current situation i.e. what tasks are now priorities, what work has already been
carried out and where the employee should now focus his/her efforts.
Return-to-work interviews should be consistent and fair. They are an acknowledgement
that the employee has been out, and help to ease the employee back into the workforce
after an absence. They provide an opportunity for the employee to outline any issues
that may arise for them as a result of their illness, and provide the employer with an
opportunity to discuss any potential issues from the employer side.
Having a return to work interview demonstrates clearly to employees that the employer
is sympathetic to genuine illness but that there is a procedure in place through which
problem absence can be identified and dealt with. It sends the clear message that the
company takes absence seriously and shows management’s strong commitment to
controlling absence in the workplace.
CAUSES OF ABSENCE
It is often difficult to isolate the true cause of absence. Why do some companies
have higher absence rates than others? With illness identified as the main cause of
absence, do their employees get sicker than other employees, or are there other
reasons? Because illness-related explanations are generally the only reasons accepted
as legitimate for unplanned absences from work, other reasons for absence can go
unnoticed or unmeasured.
There are many reasons why employees do not attend work, apart from illness. These
can include psychological factors, such as when employees perceive their work life
as being unfair in terms of return for input. There are also individuals who need to
exert some control over their work environment, and without this, take time off. Other
employees may have unreasonable expectations compared with the reality of the job
itself, while still others may feel that their effort in the workplace is not recognised
and that ‘no one cares anyway.’ There can additionally be sensitive issues that prevent
people from going to work such as difficulties with partners, or drug or alcohol
dependency.
Staying away from work occasionally may also be regarded by some, or all, members
of the work group as acceptable behaviour. Voluntary absenteeism is not simply seen
as the result of individual behaviour, it is also substantially influenced by the existence
of an ‘absence culture’. The culture of an organisation i.e. its values, beliefs and norms
can also affect attendance in a positive way by having an ‘attendance culture’ (i.e. there
is encouragement/support/rewards/expectations for, and of, high levels of attendance),
or in a negative way by having an ‘absence culture’ (i.e. where absence is ignored/not
managed/not punished/accepted).
SHORT-TERM ABSENCE
CAUSES OF SHORT-TERM ABSENCE
In the IBEC survey, around one third of respondents (35%) recorded the causes of
short-term absence. The same proportion (35%) recorded the causes of long-term
absence.
The main causes of short-term absence were minor illnesses, such as
colds/flu, stomach upset, headaches etc for both males and females. Some 44% of
respondents identified this as the primary cause of absence for men and 49% as the
primary cause of short-term absence for women.
In terms of causes other than minor illness, home responsibilities and recurring health
problems also ranked as the main causes of short-term absence for both males and
females. Work stress was mentioned as a main cause for males in 5% of respondent
companies and for females in 4%. Mental ill-health as a factor for males was recorded
in 2% of respondents and for females in 3%. Tables 7 and 8 set out the full details.
Table 7: Causes of short-term absence - Males
Cause of short-term absence
1st cause
Mentioned as a cause
(1st, 2nd or 3rd)
Minor illness
44%
61%
Recurring Health problems
1%
17%
Home responsibilities
1%
16%
Personal problems
1%
13%
Back pain
2%
11%
Other absences not due to genuine ill
health
1%
11%
Accidents outside work
0%
10%
Low morale/job commitment
1%
7%
Work stress (increase in work
demands)
1%
5%
Alcohol/alcohol related problems
1%
4%
Accidents at work
0%
4%
Commuting difficulties
0%
3%
Mental ill health
0%
2%
Management/employee relations
0%
1%
Bullying/harassment
0%
1%
Other
0%
2%
Table 8: Causes of short-term absence – Females
Cause of short-term absence
1st cause
Mentioned as a
cause
(1st, 2nd or 3rd)
Minor illness
39%
57%
4%
26%
2%
20%
Personal problems
2%
15%
Back pain
1%
7%
health
0%
7%
0%
6%
0%
4%
Work stress (increase in work
demands)
0%
4%
Mental ill health
0%
3%
Commuting difficulties
0%
3%
Accidents at work
0%
2%
0%
1%
0%
1%
Bullying/harassment
0%
1%
Other
0%
3%
MANAGEMENT OF SHORT-TERM ABSENCE
There are many measures that an organisation can take to manage absence. Almost
three-quarters of the companies in the IBEC survey (74%) indicated that they had at
least one of the measures listed in the questionnaire to manage short-term absence
and more than 40% had five or more of these measures. As Figure 1 shows, apart from
recording and analysing absence data (these being the two most common short-term
absence management measures) companies are most likely to provide line managers/
supervisors with regular absence information (40%), in addition to holding return to
work interviews (37%), as measures to manage short-term absence.
Measures to manage short-term absence
Recording of absence data
69%
Analysis of absence data
45%
Provide line managers/supervisors with regular
absence information
40%
Invoke disciplinary procedure
37%
Hold interviews on return to work
37%
Provide medical examination
36%
Specify absence ‘triggers’
26%
23%
Restrict occupational sick pay scheme
Provide counselling service
22%
Flexible working arrangements
21%
Provide absence management training for line managers
Attendance bonus/reward scheme
Self-certification
Organise health education programmes
19%
15%
12%
11%
Figure 1: Measures to manage short-term absence
LONG-TERM ABSENCE
There are various definitions of ‘long-term’ absence. The IBEC study defines long term
absence as absence that lasts more than 20 days. According to companies in the
IBEC survey who provided data on both the total number of days lost plus the number
of those days that were long-term absence, 23% of days lost were due to long-term
absence. This was similar to the CBI 2010 survey finding of 22% of days lost due to
long-term absence8.
CAUSES OF LONG-TERM ABSENCE
Less information was provided by respondents in relation to the causes of long-term
absence than those of short-term absence. The main cause recorded by respondents
was recurring health problems for both males and females (12%) – ranked either 1st,
2nd or 3rd as a cause of long-term absence. In the 2010 survey, mental ill health ranked
as the third most important reason for long–term absence for males (9%) and the
second most important reason for females (9%). Given that a significant number of
respondent companies did not provide information in relation to the causes of longterm absence, it can be difficult to draw conclusions from this data. Potentially, an
improved awareness of the issue of mental health among employers or a willingness
on the part of employees to identify mental ill-health as the reason for long-term
absence may be factors.
8
CBI, (2010), ‘On the Path to Recovery: Absence and Workplace Health Survey 2010’, UK, p.20.
Table 9: Causes of long-term absence – Males
Cause of long-term absence
1st cause
(1st, 2nd or 3rd)
6%
12%
3%
10%
Mental ill health
3%
9%
Back pain
2%
7%
Accidents at work
3%
7%
Personal problems
1%
6%
Work stress (increase in work demands)
1%
4%
0%
3%
1%
2%
0%
1%
health
0%
1%
0%
1%
Bullying/harassment
0%
1%
Table 10: Causes of long-term absence – Females
Cause of long-term absence
1st cause
(1st, 2nd or 3rd)
5%
12%
Mental ill health
4%
9%
Personal problems
1%
7%
1%
6%
Back pain
1%
5%
1%
5%
Work stress (increase in work demands)
1%
4%
Accidents at work
1%
3%
health
0%
1%
Alcohol/alcohol-related problems
0%
1%
0%
1%
0%
1%
Bullying/harassment
0%
1%
LONG-TERM ABSENCE STRATEGY
Just over half (57%) of respondents in the IBEC survey indicated that they had a
strategy for long-term absence, the most common elements being keeping regular
contact with employees when they are out sick, in addition to having a return to work
interview and assessment. Around one in three companies provide re-training for
employees when they return to work, while just over a fifth (22%) of those with a
strategy provide temporary or permanent redeployment opportunities to assist the
employee in returning to work.
REHABILITATION/REINTEGRATION
Estimates of the number of people who are on long-term sickness benefits vary across
the EU, but they approach 10% of the labour force in some countries. In Ireland, in
2009, a total of 77,665 people were in receipt of illness benefit (i.e. a payment made
to insured persons who are unfit for work due to illness). A further 52,922 were on
invalidity pension (payable instead of disability benefit if a person has been incapable
of work for at least 12 months)9.
Research has shown that the longer a person is absent from work, the harder it is for
him/her to return. According to Philips et al 10, there is evidence to suggest that ‘a
proactive approach to supporting the return to work of ill and injured workers can have
beneficial consequences both in terms of reducing lost working days and securing an
employee’s continued employment’.
Philips et al suggest that management should not only be taking action against
‘illegitimate’ long-term absence, but should also be trying to facilitate the return to work
of those who are ‘legitimately’ absent, as a result of ill health. His findings pointed to a
number of areas where employers could review their current arrangements in relation
to managing long-term absence, including putting in place appropriate procedures,
and the adoption of a case management approach. Employers are also reminded
of their obligations under S.16 of the Employment Equality Acts to seek reasonable
accomodation for employees who are suffering from a disability.
Under a case management approach, all those with relevant expertise and management
responsibility meet to discuss how a particular case should be handled. This offers a
9
Department of Social Protection, (2009) ‘Statistical Information on Social Welfare Services 2009’, Table E3, ‘Number of Recipients of
Illness, Disability and Caring Payments by Payment Type’ p.52
10
Philips, J., Cunningham, L., Dibben, P.,(2002) ‘Absence management and the issues of job retention and return to work’, Human
Resource Management Journal, Vol.12, No.2, Pages 82-94
way of avoiding the risk that responsibility is carried by one individual, often the line
manager, who may have neither the expertise or resources to deal effectively with an
ongoing long-term absence situation.
Research has shown that line managers can be hesitant to get too closely involved in
the handling of cases involving serious illness and that they tend to accord long-term
absence management a relatively low priority in relation to their other duties. The
use of a case study approach could go some way to overcoming these problems and
assisting the more consistent management of cases.
In terms of managing long-term absence, as a matter of good practice, employers
should keep communication channels open with the employee on long-term leave. The
employer should have ongoing contact with the employee as to when they will be
fit to return to work, and assure them of their ongoing value to the company, while
they are out. This contact should be appropriate depending on the reason for the
absence. The employer should ensure, where possible, that the employee remains
engaged with the company and reassured as to their re-integration into the workplace
on their return. It can be helpful to appoint an individual employee with responsibility
for managing this communication process, and assist in the reintegration of returning
employees. Maintaining regular contact with those on long-term absence can help
reduce any feelings of isolation, show them that their contribution to the organisation
is being missed and demonstrate the company’s concern for their welfare. The lack
of any contact could be interpreted as a sign that the company is not concerned and
that there is no pressing need for them to return to work. However the reason for the
absence must always be considered when determining the appropriate level of contact.
In the CBI/Pfizer report on Absence 2010, over nine in ten (93%) respondents said
that they have some form of rehabilitation in place, up from 81% in 2007. The figures
reflect that employers increasingly recognise the importance of having policies to
help employees return to work from long-term sickness absence, which accounted for
nearly a quarter of working time lost in 2009.11
Focusing, formalising and better monitoring and management of absence was the one
of the main reasons cited for the decrease in both short and long-term absence in the
IBEC survey.
MENTAL HEALTH & ABSENCE
In the current survey, mental ill health is one of the main causes of long-term absence
11
CBI/Pfizer, (2010), ‘On the Path to Recovery: Absence and Workplace Health Survey 2010’, UK, p.31
cited by employers. There has been a slight increase in the proportion of employers
stating mental illness as one of the main causes of long-term absence for males in
the current survey from 8% (2003) to 15% (2009). For females, the proportion also
increased from 8% (2003) to 11% (2009).
Dealing with mental ill health at work can be difficult for both employer and employee.
The employee may not wish to disclose the existence of a mental health difficulty to
their employer for fear that they may be discriminated against or stigmatised. From an
employer’s point of view, however, disclosure of a mental illness allows the employer to
provide various supports to the employee that can assist them in the work environment.
The employer should therefore strive to provide a safe culture and safe environment,
where an employee feels comfortable in disclosing any mental health difficulties, feels
able to ask for any supports needed, and is assured that their disclosure of such an
illness will not have a negative future impact on their career. An organisational culture
of acceptance will also reduce the possible pressure individual employees may feel to
turn up at work, when they do not feel able to do so, so as to avoid disclosing their
illness to their employer.
It is particularly important in the case of absence due to mental illness for the
employer to remain in regular contact with the employee throughout the period of
absence. Regular communication can have a positive effect on the employees’ self
confidence, reassuring them that they are valued and missed at work. This contact
should be appropriate, depending on the reason for the absence. If in doubt as to
the nature of contact which should be made, especially in work related stress case
please seek advice from your IBEC advisor. To enable a return to work, structures
such as flexible working arrangements or flexible start times to suit individual needs
should be explored and implemented, where possible, and agreed by both parties. The
existence of an employee assistance programme (EAP) may also help in providing a
source of support for the employee. According to IBEC data many EAPs are provided
by an external provider, which may serve to further reinforce the confidentiality of the
arrangement and encourage the employee to avail of the supports offered through
this programme.
When returning to work, it is also important that the employer and employee work
together to determine the appropriate level of work to be undertaken upon return to
work. Often, a perceived side-effect of absence due to mental ill health can be that
the employee feels penalised for being ill, if duties and responsibilities are removed
following a period of illness. While this may stem from a willingness on the employer
side to assist, it may have unintended negative effects on the employee, possibly
undermining self confidence and making it more difficult for the employee to feel
comfortable in the workplace. Good communication with the employee concerned
can assist both parties in understanding the pressures of each side, and will assist in
coming to a suitable arrangement that works for both the employer and employee.
Reasonable accommodation can therefore often be arrived at.
For detailed advice in relation to dealing with absence due to mental illness, please
contact your IBEC HR Advisor.
WORK-RELATED STRESS & ABSENCE
While stress and mental illness often form part of the same discussion, they in fact
relate to quite different things. Work-related stress is defined by the Health and Safety
Authority as ‘referring to those reactions due to pressure/deadlines/threats/anxieties
within the working environment’12. Mental ill health has a biological basis, which while it
can be affected by work stress, generally has its causes outside the workplace.
Work-related stress often occurs where job roles are not clear and/or the employee
feels that they have a limited ability to control their own work. In order to avoid
work-related stress the employer should, where possible, take care to ensure that
organisational structures, policies and procedures are clear, unambiguous and unlikely
to create additional difficulties or confusion for employees. Shift patterns, work
programmes and schedules should be designed carefully to minimise potential for
stress. Clarity around job roles, provision of appropriate training and management
of demands placed on individual employees, will all help to mitigate the potential for
stress. If an employee is under work-related stress, this can ultimately have major
effects on their ongoing work, and can lead to increased absence, poorer concentration
on tasks, increased anger/irritability levels and an overall reduced ability to cope.
It is worth noting that the particular demands of the workplace may create difficulties
for some employees but not for others. It is also worth noting that stress manifesting
in the workplace may have its origins outside the work environment altogether.
Employees can feel stress when the demands placed on them either outside or at work
stretch their ability to cope.
Employees should therefore, according to the HSA guideline ‘learn to cope with
reasonable pressures, and develop ways of adapting to the demands of work’.13 A
workplace policy to build resilience can be beneficial in this regard. Such a policy
should broadly encourage healthy approaches to life and work and can help individuals
to develop a personal methodology to reduce stress in both their working lives and
their lives outside work.
12
13
Health and Safety Authority, (2009) ‘Work-related stress: A guide for employers’, Ireland, p.3
Health and Safety Authority, (2009) ‘Work-related stress: A guide for employers’, Ireland, p.4
In a supportive work environment, open communication can lead to the isolation of
work practices or workplace issues that cause stress. It could be the case that the
employee needs further training to be more comfortable with aspects of the work, or
that they may need some additional support in relation to particular tasks. Optimally,
the employer and employee should determine together what supports are required
by the employee. The employer should then decide if they are in a position to provide
these supports on an ongoing basis.
For further advice in dealing with absence and work-related stress, please contact your
IBEC HR Advisor.
THE ROLE OF THE LINE MANAGER IN
ABSENCE MANAGEMENT
The role of the line manager in absence management has been increasing in recent
years. Line managers are sometimes the only people who may be aware that a particular
employee is absent. They are best placed to understand the circumstances around
an individual’s absence and to have noticed a problem at an early stage. Therefore,
their active involvement in the company’s absence procedures is pivotal to the overall
effectiveness and future success of an absence policy.
Underlining the above, the IBEC survey found that in the vast majority of companies
where absence was recorded, some 82% of companies fed back information on
absence rates to line managers/supervisors. In around a quarter of these companies
this feedback occurred only when there was a problem, however one in five companies
fed back weekly to supervisors on absence rates, with a further 33% feeding back to
supervisors monthly. A further underlining of the important role of the line manager
lies in the return to work interview. Three out of five respondents interview employees
on their return to work, where there is concern about an employee’s level of shortterm absence. In 65% of these companies, the initial interview is conducted by the line
manager. And in one in ten of these companies, the line manager also conducts the
follow-up interview where applicable.
In addition to ensuring that work is appropriately covered during the employee’s
absence, there are a number of critical actions that line managers need to take in
order to address absenteeism. They need to •
ensure that staff are fully conversant with the organisation’s views and
procedures for dealing with absence;
•
be the first point of contact when an employee phones in sick;
•
maintain appropriately detailed, accurate and up-to-date absence records for
their staff (e.g. date; nature of illness/reason for absence; expected return to
work date; doctor’s certificate obtained; etc.).
•
have a working knowledge of the Employment Equality Acts 1998 - 2008.
Line managers on an ongoing basis may also assist with:
•
Identifying any patterns or trends of absence which cause concern;
•
The holding of return to work interviews;
•
Disciplinary procedures where necessary;
•
Offering support and welfare provision to employees on sick leave – often
through referrals to other sources of help (e.g. a counselling or occupational
health service);
•
Keeping the HR department up-to-date on absence data requirements in addition
to any problems.
To ensure that line managers are comfortable and competent in their role, they need to
have the full support of senior management. Both parties need to be aware of the aim
of the absence procedures. Should there be any discrepancies between departments
the policy can lose its effectiveness. Staff may fail to recognise it as a formal part of
the organisations strategy, deserving recognition and adherence comparable to that
shown towards other procedures such as those for dealing with grievance or discipline.
THE ROLE OF HR IN ABSENCE
MANAGEMENT
From the results of the IBEC survey, the role of HR in relation to absence management
is very important. From the recording of absence (32% record absence in a centralised
way) to the ongoing management of absence (i.e. HR more likely to record ongoing
absence), the importance of the role of HR in monitoring and advising on procedures
in relation to absence is clear.
One of the key roles for HR is their role as advisors in relation to absence. In relation to
conducting back to work interviews etc. their input is vital. In terms of administration/
monitoring or measuring absence, HR can provide the records in conjunction with
other departments or line manager to identify and deal with problem absence. In
larger companies, HR regularly have responsibility for providing centralised figures on
absence either across departments or to head office, for example.
Additionally, in the case of long-term absence, HR are regularly involved, particularly
where an active role is taken by the company in managing this type of absence. The
role of HR when disciplinary procedures have been instigated is also clear. Across the
survey respondents over four out of ten companies had invoked disciplinary action due
to absenteeism, while a quarter (24%) had dismissed an employee due to absenteeism.
The role of HR in the areas of implementation of disciplinary or personal improvement
plans for employees has been widely documented elsewhere, and confirms the
importance of the role of HR in the management of absence, and in particular dealing
with problem absence, on an organisation-wise basis.
ABSENCE MANAGEMENT POLICIES
An absence management policy will normally include processes and procedures
for both employees and those responsible for recording absence. A good absence
management policy will normally outline the following:
The organisations approach to absence:
•
the principles of the policy e.g. fairness, consistency, etc.
•
the position of the organisation e.g. low tolerance of unauthorised absence, high
levels of support for genuinely ill employees
•
the objectives of the policy: e.g. aims to create and promote a positive and
healthy workforce, target absence rates etc.
•
the services available within the organisation: e.g. employee assistance
programmes (EAPs), counselling programmes, rehabilitation/re-integration
programmes.
•
how absence is defined and measured within the organisation.
Notification procedures for employees that are out sick:
•
how the notification of sick leave takes place e.g. who the employee should
notify, requirements for medical certification, details of self certification
procedure, where applicable.
The role of the line manager/supervisor, or other person in the organisation responsible
for recording absence:
•
how the line manager should deal with absence recording, documentation in
relation to absence, counselling, return to work interviews etc.
•
the responsibilities of the line manager in relation to recording absence and
details the level of discretion available to the line manager in dealing with
problem absence, in compliance with the Employment Equality Act 1998 - 2008.
•
details how problem absence is identified and to whom the problem should be
referred.
The role of the medical department/company doctor/ nurse etc..
Disciplinary processes and procedures.
A sample attendance policy is provided on page 49 of this report.
CASE STUDIES
1
Engineering Company
Based in Southeast
115 full time employees
Profile of Company
The company is in operation in Ireland for 23 years, and is engaged in the engineering
sector. The company is not unionised. There is one shift system in operation in the
company. The shift operates 8am – 4.30pm/4.30pm – 12 midnight/12 midnight – 8am.
A clock-in system is utilised.
The company does not operate a sick pay scheme and has no attendance bonus in
place.
Outline of current absence situation
The current absence rate in the company is around 3%. The company considers that
this rate is satisfactory.
The company does not currently have any employees on long-term absence.
In relation to short-term absence the company has two main issues:
•
employees that have problem uncertified short-term absence, or consistent
lates, and
•
employees whose absence increases around holiday periods, where employees
may be travelling out of the country for holidays, or to visit family abroad.
Current management of absence
In relation to lates, a system operates whereby a daily record of lates is kept by HR using
data from the clock-in system. Where a problem is immediately obvious on a particular
day, then HR in consultation with the plant manager will deal with it straightaway.
From the daily clock-in records a monthly report is compiled into a spreadsheet and
shared with the plant manager. Company policy dictates that three lates in a single
month constitutes problem absence, and a first warning will be issued on foot of this.
If the problem persists, the employee will move through the disciplinary procedure,
and a continued failure on the part of the employee to improve will ultimately result
in dismissal.
The company are obviously sympathetic to employees where difficult circumstances
exist, and work extensively with the employee to ensure that, where possible,
improvements can be made. But ultimately, the company sees turning up on time to
work as the responsibility of the employee, and in the interests of fairness to other
workers takes repeated failure to turn up on time, seriously. Employees, at all times,
can appeal company decisions through their own grievance procedures.
The situation in relation to repeated or pattern short-term absences is similar. Where
several unexplained or uncertified absences occur, or where a pattern has emerged
in relation to absences around particular times, the employee will be met on return
to work. They will be asked to provide an explanation for their absence. Where an
explanation is not provided, or no sick certificate forthcoming, or where no annual
leave remains to cover the absence, the disciplinary procedure will be invoked.
Where certificates have been provided, the company may refer an employee to their
own doctor for examination.
Success in managing absence
Over time the company has formalised their approach to absence and have been
successful in creating a culture where employees are aware that absence is a matter
of priority for the company. The company have successfully reduced absence in a
number of areas, and are satisfied that their current absence rate is sustainable. The
company remain very supportive of individual employees where absences are genuine.
Future management of absence
The company is currently examining the possibility of setting up an attendance bonus
scheme, but is still at the discussion stage in relation to this.
2
Manufacturing company
North west
160 employees
In operation in Ireland since 1978.
Shift systems
The company operates two shift patterns.
A three-cycle shift system, daily five days per week, 8am – 4pm / 4pm - midnight /
midnight – 8am. Staff rotate across different shifts.
A four-cycle shift system operates from 8.00am - 8pm and 8.00pm - 8.00am.
Employees work 3 days in week one, and 4 days (2 + 2 days) in week two. Employees
rotate between days and nights. Over four weeks, employees work on two weekends
also, one weekend on day shift and one weekend on night shift.
The company occasionally operates a permanent weekend shift, as circumstances
warrant, however this system is not in operation currently.
The absence rate for the four-shift system remains almost consistently at zero, and
employee satisfaction ratings derived from employee surveys show high levels of
satisfaction from workers on this particular shift pattern.
Sick pay scheme
A sick pay scheme is in operation. On the first day of absence the employee receives
no pay. From second day of absence to 5th day of absence 60% of salary is paid. From
days 6 – 20, full pay is provided, and from days 21 – 40 half pay is given. Records are
kept on a rolling 12 month basis.
Certificates are required within two days. Company reserve the right to refer employee
to company doctor for evaluation.
Attendance bonus
An attendance bonus is in place – however company remains unconvinced about the
effectiveness of this bonus. The company feels that the bonus rewards those that
would have turned up at work anyway, and does not deter employees from problem
absence. The attendance bonus is paid weekly, for a full week’s attendance.
Recording of attendance
The company operates a clock-in system, which is utilised by every employee. The
company uses a HR dashboard system, which provides details to management of
several HR metrics including the number of direct/indirect employees, as well as
absence rates for each month. The company averages around 1.5% casual absence,
excluding long-term absence. The company are satisfied that this is an acceptable level
of absence.
The clock-in system data is also used to identify patterns in employee absence. The
company believes that over time trends will appear in absence behaviour. In the past
seasonal absences have been identified within trend data as well as the more regular
Monday/Friday absences.
Company culture
The company is very clear that absence is a priority for management. Absence figures
appear on the HR dashboard and are reviewed. Attendance data is also reviewed to
see if any particular patterns emerge. The disciplinary procedure is used where poor
absence behaviour continues over a period of time, and does not improve despite
engagement with management.
How absence is managed?
The company is sympathetic to genuine absences and to absence when a set of
circumstances results in unusual absence patterns for employees. However, the
company takes absence seriously, and will conduct return to work interviews for
employees where a problem absence pattern has been identified.
Once the company has identified a problem absence pattern, they will talk to the
employee concerned, to let them know that their absence is becoming an issue. It is
the company’s experience that most employees will adjust their behaviour following
this talk and that further action will be unnecessary. However, where the poor absence
behaviour continues, the employer will instigate the disciplinary procedure and
proceed to deliver, in the first instance, a verbal warning, followed by two successive
written warnings, culminating in dismissal where the behaviour is prolonged and not
improving. The company has dismissed employees for repeated absence in the past.
Long-term absence
The company has a number of employees on long-term absence. The long-term
absence rate is 2.9%. The company stays in touch with employees on long-term leave
and may ask that such employees attend the company doctor from time to time.
Successful absence management strategies
The company believes that the fact that employees lose a day’s pay immediately deters
employees from casual absence. Additionally, the company culture is that absence is
monitored and poor absence behaviour will result in action from the company. Whether
that action is a talk with the employee or the instigation of the disciplinary procedure,
the company will act to ensure that problem absence is minimised.
3
IT manufacturing and services company
Company operates a large-scale manufacturing and services business in Ireland. The
company has several shift systems in place in its manufacturing business, and on the
services side, supports time zones and holidays in different countries and regions of
the world.
Sick pay schemes
The company has a sick pay scheme in place. Through acquisitions some employees
may have had different entitlements than others, however, an effort has been made to
rationalise and consolidate various schemes over the years. In relation to sick pay, this
is now mostly aligned across the business. Employees are paid for the first three days
they are out and on the fourth day must submit a sickness certificate. Employees must
inform their direct line manager of their absence either in person or by voice message
within the first two hours of their shift.
Company approach
The company has an expectation of 100% attendance. Employees are responsible for
uploading data and information themselves in relation to attendance at work, leave etc.
The line manager has access to individual data and reviews this data regularly. From
a management perspective there is a lot of diligence around ensuring that absence is
managed. There is a monthly meeting during which the absence rates and patterns of
employees are reviewed.
The company has two monitoring methods:
Monitoring the trend – if particular shifts are consistently missed, or employees
consistently do not make it to work on particular days or nights.
Monitoring the percentage absence – measured on a rolling basis and reviewed
monthly. If an employee has a high percentage absence then a conversation is held
with the employee where they are asked about their absence. If the absence is due to
ongoing health problems, then the matter can be referred to the occupational nurse
or physician for evaluation.
Return to work – short-term absence
When an employee has been absent, they must attend a return to work interview. This
interview involves the completion of a form which sets out the reasons for the absence.
Occasionally, the company has found that absence may increase when an employee
becomes shift-intolerant. Where possible the company work with the employee and
with HR to come up with an alternative approach on an individual basis, and try to
assist the worker in altering working hours/patterns etc, where possible.
Long-term absence
The company has a low level of long-term absence, currently there are around 20 people
from a staff of over 4,000 people on long-term absence. Employees are considered to
be long-term absent after an absence of six months from work. At this point, the
relationship with the employee is managed by the occupational health service of the
company. There is regular communication in relation to employees on long-term
absence between the company’s physician, HR, line manager and occupational health
service.
Return to work – long-term absence
Contact is maintained with the employee and when they are ready to return to work,
their health is evaluated by the occupational health professionals in the company,
and their return to work validated. There is a 12-week re-integration phase when
an employee on long-term absence returns to work. During this 12-week period the
employee returns to work on a phased basis, with hours of work, duties etc decided in
consultation with the employee and the company physician.
Role of line manager
The role of the line manager is important in managing absence. All absence policies
and attendance expectations are clear to both the employer and the employee. The
company believes that the key to managing absence effectively is in the application
of these policies. In this regard, the line managers role is very important, not only
from the point of view of managing the absence of individual employees, but also from
the point of view of providing guidance and support to other line managers in their
management of problem absence. Regular meetings are held with line management to
examine patterns and rates of absence, and where a problem absence exists, managers
will be asked to account for it. This ensures that line managers are actively managing
absence, and that absence management policies are adhered to across the company.
Company satisfaction with absence rates
The company does not concern itself with overall absence rates, but rather prefers
to manage absence on an individual basis. The company is satisfied that any problem
absence is identified using their existing methods, and that both employees and
management are familiar with the well structured absence policies of the company. The
company has also remained flexible in working with employees with problem absence
to determine the cause and where possible to assist. The company ultimately prefer to
avoid the formal disciplinary process, where possible, however the disciplinary process
will be invoked where the employee consistently fails to engage with the company in
managing their absence.
SAMPLE ATTENDANCE POLICY
The organisation places great emphasis on the attendance of all employees at work and
will monitor each employee’s attendance record. Attendance is an important aspect of
job performance and the organisation aims to ensure that lateness and absence are
kept to a minimum.
The purpose of this policy is to regulate the procedure for attendance and to apply
consistent standards throughout the organisation.
Authorised absence
The following constitute authorised absence from work, once proper notification
procedures are followed:
•
approved annual leave;
•
protective leave (eg, maternity, parental leave);
•
approved business trips or external training courses;
•
compassionate or other leave approved in advance by the organisation.
Unauthorised absence
An employee who is absent from work and who has not notified the organisation
as to the reason for the absence, will be written to by the HR Department seeking
confirmation of the employee’s situation. Failure to cooperate with the organisation in
this instance will result in the disciplinary procedure being applied.
Procedure for reporting absence
Unless prior approval has been given, an employee absent from work must notify the
line manager as to the cause and likely duration of absence within half an hour of their
scheduled starting time on the first day of absence.
Your supervisor or manager must be contacted directly and spoken too. Voice
messages or text messages are not acceptable, nor is leaving a message with another
staff member.
In cases of absence due to illness, absences of more than two days must be supported
by medical certification. Certificates should be sent to the organisation, no later than
the third day of absence. For absence extending beyond one week, a weekly medical
certificate is required.
Medical certificates must include the following details:
•
name and address of doctor;
•
name and address of patient;
•
statement indicating, in general terms, the nature of the illness or injury;
•
opinion of doctor that patient is unfit for work;
•
expected duration of incapacity;
•
dates of issue and doctor’s signature.
Return to work
On the employee’s return to work the line manager will conduct a return-to-work
interview. This interview allows the manager to discuss the health and welfare of
the employee; provide support to employees; review the employee’s attendance and
lateness record and highlight any concerns about attendance levels.
Medical appointments
Wherever possible, appointments should be arranged in the employee’s own time.
Alternatively, where there is minimum disruption to the working day, managers may
agree with employees that the hours are made up at another time. Where this is not
possible, employees should notify their manager of an appointment at the earliest
opportunity, and may be required to provide documentation in evidence of the
appointment.
Support
It is the aim of the organisation to ensure that any employee with a disability or who
requires ongoing medical attention will be supported by the organisation. Employees
are encouraged to talk to their manager or the HR department in this regard. All
information will be kept strictly confidential.
Time-keeping
The organisation places great emphasis on punctuality and will monitor each
employee’s time-keeping record. Each employee has a responsibility to ensure they
are at their workplace ready to start work at the appointed start time. Employees
are also required to make a prompt start following lunch and breaks. Managers are
expected to monitor and manage time-keeping.
Employees are considered to be late if they arrive at their work place after the
scheduled start time. If an employee arrives for work more than 15 minutes late, he or
she must report to the supervisor or line manager.
The appropriate stage of the disciplinary procedure will be instituted where an
employee is persistently late. (An organisation should communicate to all employees
what it deems to be persistent lateness.)
Having reported to work, an employee may not leave the premises without prior
permission of the supervisor or line manager and without clocking out, where
appropriate.
Record keeping
Employees are required to ensure that the time recording system is accurate and upto-date at all times. Inaccurate or poor recording may lead to the initiation of the
disciplinary procedure. Recording the information (or clocking in or out) for another
employee is not allowed and may also lead to the initiation of the disciplinary procedure.
Review
Attendance and lateness is monitored on a regular basis. The organisation will report
on absenteeism on a monthly rolling basis, in accordance with established practice.
Where levels of absenteeism fall below acceptable standards, the organisation will
seek to identify probable causes and rectify them.
IBEC RESEARCH UNIT
IRISH BUSINESS AND EMPLOYERS CONFEDERATION
Confederation House 84/86 Lower Baggot Street Dublin 2
PHONE + 353 (0)1 605 1500 FAX + 353 (0)1 638 1500
EMAIL [email protected] www.ibec.ie
CORK
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IBEC EUROPE
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Waterford Business Park
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Bank Place
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3rd Floor Pier One
Quay Street
Donegal Town
Avenue de Cortenbergh, 89
Boite 2 1000 Bruxelles,
Belgium
PHONE +
353 (0)21 429 5511
EMAIL [email protected]
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Employee Absenteeism - A Guide to Managing Absence

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