Chaotic absence management is damaging welfare and productivity, according to research from insurance firm Ellipse. CEO John Ritchie reveals the findings.
Workplace absence has become a hot topic at a time when British businesses can ill afford to bear the burden of either unproductive or overstretched workforces. According to the CBI absence survey, workplace absenteeism cost the UK £17 billion in 2011, while consultancy firm PricewaterhouseCoopers suggests that this figure is even higher, at around £32 billion per year.
Whatever the correct figure, it is clearly measured in the tens of billions. But the real stories behind these vast numbers are about individuals: those who have to take time off, their colleagues and their managers. Ellipse, as insurers entering the group income protection market for the first time, and therefore providing cover for employees who are long-term absent, wanted to understand how absence was perceived by both employees and their managers, find out how effectively absence is managed and, in particular, take a look at the impact of technology on absence.
This meant understanding if companies' absence systems were high- or low-tech, who has responsibility for managing them and how much, or little, expertise the people with that responsibility have. Similarly, the insurance firm wanted to know if the widespread facility to log into work from home affected what constitutes absence.
It was with these types of queries in mind that Ellipse, in conjunction with Professor Cary Cooper, an expert in organisational psychology, conducted research into the less explored, non-financial issues associated with absence, which led to the report Sick notes: how changes in the workplace and technology demand a rethink of absence management. The findings were unequivocal that the current approach is not working; in fact, one major problem is that there are so many different approaches being used by firms.
Absent employees are getting "lost" in the system and illnesses are allowed to spiral into chronic conditions. It is evident that while workplace practices have evolved significantly in the last decade, in large part due to the adoption of universal technologies, absence management has not caught up.
Almost three-quarters of employees consider the way that sick employees are treated to be an important measure of their employer's brand."
The research was conducted online using a sample of 1,000 employees and 250 line managers, both groups working within small to medium-sized enterprises (SMEs). It focused on SMEs as they were felt to be the entities that might find it most difficult to cope with absence: when someone is off sick in a small firm, it generally has a bigger, and often quicker, impact than an equivalent absence in a larger company. Also, many SMEs have to operate without a separate HR department, with responsibility for managing absence falling on the shoulders of line managers, who rarely have the experience (or the time) to manage and minimise the incidence and duration of absences.
One reason why estimates of the total cost of absence to the UK economy vary so widely soon became apparent: the quality of data held about absence is itself highly variable. One line manager in 10 reports that their company has no formal absence recording process at all. Of those with formal processes, 41% admit that they were not necessarily followed. The 57% who said they had a process and that it was strictly followed were likely to include at least some who are mistaken in their belief.
Acceptable reasons for absence
There seems to be a broad consensus about what constitutes an acceptable reason for absence, although, perhaps surprisingly, our research showed that line managers were slightly more liberal in what they considered legitimate than workers' peers. This may be because peers are the ones who typically pick up the work that would otherwise have been done by their absent colleagues. Depression is a good example of this: 61% of line managers felt that it was a legitimate reason to be away from work, compared with just 49% of employees.
What actually constitutes an absence, though, is more of a grey area; even where the cause of absence is accepted as reasonable by all parties, if someone is too ill to make it into work but can pick up and respond to emails remotely (we have christened this group "STOIC": sick though often inbox checking), does their working from home constitute a sickness absence or not? The answer wouldn't matter so much were it not for the payment of sickness benefits - from the state or the private sector - usually requiring a yes or no answer. In this sample, only 27% of employees said they did not work at all while they were ill.
The option of working from home was seen as a way to reduce absence by 50% of the employees in our sample and 70% of line managers. Such is the novelty of this option for most people (with the internet being so pervasive, it is easy to forget how recent a phenomenon it is), it is not surprising that the ability to work remotely has yet to be properly factored into how absence is considered.
Of course, some work can only be carried out effectively in the workplace, which has led to another modern phenomenon: the "Wickie" or "working sickie". More than 80% of our sample said that they had spent some time in work while sick when they ought to have taken that time off.
The combination of STOICs and Wickies means that we should reflect before condemning those people (more than half of our sample) who admit to having taken time off when they weren't sick - perhaps they are just getting back some time given to their employers when they could legitimately have taken sick leave. Also, there will be cases where individuals are sick when they are working because it is the work itself that is the cause of their ill health.
Five-step plan for handling absence
It is important for companies to handle absence correctly. Almost three-quarters of employees (especially younger age groups) consider the way that sick employees are treated to be an important measure of their employer's brand. Based on what we learned from the research, the "Sick notes" report offers the following five-step plan for businesses to incorporate in their strategies for handling absence:
1. Ensure that you have a clear and simple procedure in place
There should be no doubt as to whom employees must contact, and by what means. (A telephone call is much the best medium, but it is just as important to specify what is unacceptable - eg texts - as to what is deemed acceptable.)
2. Use technology to monitor trends
Most aspects of business have benefited from the development of computer systems and absence management is no exception. Using them enables any trends to become very apparent, whether they relate to one individual's pattern of absence - perhaps a correlation to particular sporting events - or to absence across an entire organisation.
3. Maintain proactive and positive contact with the employee
Keeping the lines of communication open not only makes it more likely that an absent employee can make a successful return to work, it is also noticed by other employees and reflects well on an organisation's reputation as a good employer.
4. Consider external expertise
If the previous steps sound like too much to take on, or are beyond the expertise within the business (which they often will be), outsourcing can be a sensible option.
5. Foster a culture of employee engagement and flexible working
Perhaps the biggest factor determining an organisation's rate of absence is the motivation of its employees. An employee from one company can be off for the same reason as one from another, but may have a much greater chance of an early return to work if they feel genuinely valued by their employer. Flexible working means accepting that there will be times when it is in some employees' best interests - and therefore the business's - to accept less than 100% for the sake of their health, rather than letting them drive themselves into the ground. All too often, the cause of absence from work can be the work itself.
Attention must be paid to short-term absence, too. It is often about managing the few employees unfortunate enough to need long spells off work, rather than taking a real opportunity to help employees back into work before their mindset switches from "temporarily absent employee" to "invalid". We should not forget that all long-term absences were once short-term absences.
John Ritchie is CEO at Ellipse. The company has developed the group income protection product InteractPlus, which includes a simple and clearly defined absence reporting and management process.