Employee absence is a perennial problem for every organisation and the operational impacts has never been felt more strongly. At a time when businesses need to squeeze every drop of performance, productivity and cost control out of their operation the last things they want to deal with are the corrosive effects of unplanned absence.

A SHRM study (Society for Human Resource Management) reports productivity loss due to replacement workers for unplanned absences is double that of planned absences. The productivity loss for Europe caused by unplanned absence was 31.6% vs a productivity loss for planned absence of 15.2%. A retail global absence report conducted for UKG (previously Kronos) in 2018 found 7% of labour hours were scheduled but not worked and 6% of labour hours were worked by not planned. Unplanned absence was contributing to 13% of all labour hours being uncontrolled – a costly and worrying statistic. The consequences of unplanned absence can include:

  • Increased labour costs due to replacement workers and overtime
  • Reduced productivity
  • Increased workload and stress on colleagues
  • Reduced morale and engagement
  • Lower levels of quality and customer service
  • Increased training costs

Current COVID-19 events are compounded these issues too. A report last year by FirstCare suggested absences caused by the coronavirus pandemic will have cost the UK economy more than £6.5 billion.

Unplanned Sick Leave

The fallacy of solving absence with technology alone

Every organisation knows they must seek to reduce absence rates, but it seems many rely too heavily on finding a technical solution to what is (and always will be) a human problem. Technology has a key role to play in managing the cost and impact of absence, as they say, ‘you can’t manage what you don’t measure’, but it’s not the complete solution.

Using workforce management and HR solutions to automate processes and deliver timely, accurate and insightful data on all forms of absence are the foundation for improvements. Organisation moving from manual / paper-based processes for recording and processing absences will achieve a significant time and cost reduction through automation. Typically, clients implementing UKG workforce solutions achieve a ~25% reductions in absence rates. This is the result of more stringent and automated absence processes, and the fact employees know absences are now carefully being monitored.

Beyond the technological improvements to absence management processes, addressing the root causes of absence may require changes to company policies or procedures. For this reason, having executive level oversight and sponsorship of your absence project is essential - without it you will limit your full benefits potential.

The human aspect of absence management

People go to work to do a good job, earn money, feel valued and be treated with fairness and respect. It’s therefore unsurprising that absence rates increase when these expectations are not met. The lack of tools to do a good job. Late or inaccurate pay. Overtime not being allocated fairly and equally. Favouritism by managers. Not feeling listened to or valued. The way we treat employees and communicate with them affects absence rates.

Understanding the individual needs of employees is the only way to fully address many of the root causes of absence and employee turnover. Fairness, equality, trust and transparency are essential.

A brief story...

Many years ago, I remember hosting a roundtable where one of the delegates shared a story about suffering higher than normal levels of staff turnover and absenteeism on a particular contract. The organisation provided cleaning services and the contract in question was on a poorly served bus route. To get home at a reasonable hour some members of staff needed to catch a particular bus. Unknowingly, the work schedules created by managers made this difficult, so people would either leave early, accept they’d be home late, call in sick or in some cases leave. If the contract manager had taken the time earlier to talk to staff, understand the situation and adjusted the schedules, they would have lost fewer good people.

The above story may be a simple scenario, but it highlights the value of good communication and personable management. It also demonstrates the value of data analytics.

Using data to address the causes of absence

We may not always have the time to speak as often as we would like with employees, but data can speak to us. Labour analytics plays a key role in highlighting potential issues and helping to identify the root cause of problems. For example, there is generally a correlation between Absence Rates, Overtime and Separation Rates - the self-fulfilling spiral of stressed and unhappy employees leading to increased labour costs.

The analytics tools built into UKG workforce solutions enable our clients to quickly identify and resolve issues, improving cost control, productivity and compliance. Jim Hale, Resource & Planning Professional at EE shared a quote regarding their use of analytics to improve revenues and NPS scores, “Our use of UKG labour analytics enables us to spot trends and home-in on anomalies that would previously have gone unnoticed.”

Another common way to reduce absence rates and demonstrate your appreciation for employees is by providing self-service tools. In these crazy times of home schooling, self-isolation, care bubbles and furlough the need for good communication and work flexibility have been spotlighted. Giving employees mobile self-service tools that enable holiday booking, shift-swapping, requesting additional shifts, recording remote working hours and activity, and attesting to health and wellbeing will make them feel valued, and reduce the administrative burden on managers too.

Conclusion

At a time when cost control, retention of top talent and driving higher productivity are top of the business agenda, the adoption of technology that streamlines the management of all forms of absences is essential. However, this must be adopted with executive level support and the acceptance that achieving optimal improvements will rely good management, policy and procedure review, and a commitment to fair and equitable HR practices. Workforce technology is an enabler of success, but the key to unlocking full value will always be in the hands of your people.

 

TOP TIPS FOR MANAGING ABSENCE

 

Published: Tuesday, 12 January 2021