Ever have too much on your plate and take a day off when you could probably have soldiered on with that headache / sore ankle / developing sore throat?

The absent worker has been estimated to cost Australian companies $35 billion annually. When you explore  the ripple effect that one sick day can have, you can understand the magnitude of the problem.

Costs are many and varied.  As well as the cost of replacing the employee for the day, if needed, the temporary worker will generally be less productive.  The temp will take time to become familiar with the task, won’t know the other staff, and will be less efficient.  Other staff who help the temp will also be less productive.

If another employee has to carry the load, their workload may suffer.  Customers may miss out on their usual service, unfamiliar staff may make mistakes and quality can suffer. Supervisors have to spend time sorting out workflow, or take on some of the employee’s tasks themselves.

Multiply this out hundreds or thousands of times a year and the impact of absent workers on company morale and productivity starts to stand out as a significant problem.

With few companies immune from the scourge of the sick day, how can organisations reduce and manage absenteeism?

According to Ms Sharon Kaleta, President and CEO of the Disability Management Employers Coalition (DMEC) and Mr Kenneth Mitchell P.hD, researcher, it's all about preparation.

MAKING SURE YOU'RE READY FOR ABSENCE MANAGEMENT

Ms Kaleta and Mr Mitchell believe effective absence management (the process of tracking, preventing, and managing lost work time), is largely about being ready.

Mr Mitchell stresses that organisations suffer when they take the easy way out and simply negotiate the cost, rather than control the drivers of lost time. "It's like negotiating with the scale to weigh less rather than changing personal behaviours" he said, "the employer has to make a commitment to changing what drives lost time."

The pair break down the preparation that is required to identify and respond to these drivers.

Step One – Organisation Dynamics

The first step is to know the company inside out, considering:

1. Current operational climate – is the company hiring, downsizing, looking to merge?

2. Who has the power to approve change – is it upper management, are division heads, unions or department directors involved?

3. Are there cultural issues – According to Mr Mitchell, “Ethnic diversity, gender, geography all play a big role in the design and success of your program.”  What about morale, do they not address this as an issue?

Step Two – Identifying the Need

Ms Kaleta and Mr Mitchell say that the needs of individual companies will vary, so each must explore and identify precisely, the issues that need to be addressed. Relevant questions include:

1. The nature, scope and impact of lost time – how prevalent is casual absence? How many employees are off on disability or receiving workers’ compensation?

• Mr Mitchell suggests “go to HR or payroll and gather as much data as you can, and try to identify the things that are important in your organisation (ie are lots of employees taking a lot of short periods off work, or are a few employees taking several days off?). He noted “doing this homework will allow you to justify a change to programs” (money talks).
• Number of lost days – what do you consider to be an acceptable level?
• What are the direct and indirect costs? – what is the relationship between lost days and things like sales, payroll and production?

2. What drives lost time? - Ms Kaleta says there are a number of key drivers that companies should be conscious of, including:

• Layoffs (“some people look for a way to keep the money coming”) and growth (“people work longer, presenting a greater opportunity for injury.”);
• Management attitude (“if a company supports teamwork, employees are happy, and less likely to fight claims”);
• Plan/ program design; and
• Levels of expected production.

3. What do you want to do about it?

TIPS FOR EFFECTIVELY IMPLEMENTING AN ABSENCE MANAGEMENT PLAN

Ms Kaleta and Mr Mitchell offer the following suggestions:

• Complete your due diligence, conduct a lost time impact study.
• Understand the self interests of stakeholders.
• Develop your Absence Management (or “AbMan”) Plan.
• Plan the program with well defined milestones, to measure your progress.
• Look for initial results in 90 days.  If you haven’t achieved results by that point it is sensible to review your action plan.
• Reward the stakeholders early and often, “it’s a long process, keep people motivated”.
• Monitor, track and analyse.

THE BOTTOM LINE

With negative impacts on operational productivity and employee morale, absenteeism hits the bottom line hard. At around $35 billion lost last year, Australian companies have significant room for improvement.