Absenteeism in the Workplace

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					                                 Absenteeism in the Workplace
                                        By Michelle Pillay


15 July 2009


Introduction



Employers have long been concerned with the business cost caused by employee absence
from work. "Unscheduled absences hurt," wrote M. Michael Markowich in a summary of an
article he wrote for the September 1993 issue of Small Business Reports. Indeed, absenteeism
is one of South Africa’s, if not the world’s, most prevalent workplace issues. Surprisingly though,
very little has been done to address this problem, leaving supervisors and managers ill-
equipped to handle the issue.

Do you know one day’s absence can cost a company three days worth of salary?
A recent survey published in a national newspaper estimates that South Africa is losing around
R12 billion a year due to absenteeism. The survey also suggests that the cost of absenteeism is
not only limited to the employee’s salary for the day he is not working – it is actually three times
the day’s salary taking into account related costs involved which includes sourcing a temporary
replacement and loss of productivity.

But even if a company wants to address the problem, where can they start? There are various
reasons for absenteeism, so how do management and HR get it right? Actually there are
several ways to address the issue and manage it effectively. It does, however, start with
understanding the reasons employees sometimes choose not to come to work, even when they
are fully able and capable. Coupled with this is educating, tracking, consulting, engaging,
feedback and prescribing individual employee solutions. The key to an engaged work force that
is present and invested in the success of the company is consulting them routinely on what
drives them. Address issues early and directly and this will go a long way to decreasing
absenteeism levels.

Defining Absenteeism



Absenteeism occurs when employees are not present at work when they are scheduled to be
there. It can be divided into voluntary or involuntary absenteeism. Involuntary absence is
viewed to be beyond the employee’s immediate control; legitimate reasons like personal illness,
accidents or family emergencies. Voluntary absence is under the direct control of the employee
which can often be traced back to other factors such as a poor work environment, job
dissatisfaction and other issues. If such absences become excessive, they can have a seriously
adverse impact on a company’s operations and, ultimately, its profitability.
Presenteeism


This form of ‘absenteeism’ is often less problematic as it is not stigmatized and often, in some
companies, this tendency is often welcomed rather than frowned upon. It is the opposite of
absenteeism. Presenteeism is not about malingering (pretending to be ill to avoid working) or
slacking on the job like surfing the internet when one should be working. Rather it is about
productivity loss due to real health problems such as allergies, asthma, chronic back pain,
migraines, arthritis, stress or depression. These are not the usual serious illnesses like flu which
force people to stay away from work. Generally people suffering from these conditions choose
to come to work despite their ailments but these conditions will materially reduce their
productivity. A US research on the issue, referred to in a recent article in the Harvard Business
Review, suggests that presenteeism causes a greater loss to companies than the costs of
absenteeism, direct and indirect medical costs and long- and short-term disability payments put
together.


According to Stats SA, ‘South African's unemployment rate has increased to 23.5 percent in the
first quarter of 2009 from 21.9 percent recorded in the last quarter of 2008’. With such rampant
unemployment, can an employee really afford to stay away when ill? Not likely, esp. if there are
work deadlines and pressure, fear of being disciplined or a company culture that discourages
sick leave.


Causes of Absenteeism


Mention absenteeism to any manager or HR official and they are most likely to cringe. Often
there are so many factors related to an employee being absent that managers do not how to
deal with them.
These include;


    1. Personal factors such as age, health, family responsibility, stress and debt as well as
        gender. The two most popular reasons listed on employee sick notes are flu and back
        pain, according to a Corporate Absenteeism Management Solutions report.              Health
        could be adversely affected by high levels of debt and stress, which cause a release
        adrenaline and the stress hormone cortisol. If the body stayed in this mode too long,
        those chemicals could wreak havoc, increasing blood pressure and heart rate and
        creating problems with memory, mood, digestion and even the immune system. These
        health problems caused by debt and stress invariably lead to absenteeism from work.
2. Organisational factors such as size of the company and work groups (smaller
   companies tend to have better control and less absenteeism), policy control and the
   application thereof, all influence absenteeism. Other company factors are job
   satisfaction, low morale, team work and manager dynamics affect the incidence of
   employee attendance. The issue of sick leave entitlement is also a company factor that
   needs to be highlighted. Most sick leave policies foster a 'use it or lose it' mind-set, so
   employees feel entitled to take a certain number of sick days per month.


3. Social factors such as difficult community circumstances like crime and fear of
   intimidation, lack of transport facilities, poverty levels, malnutrition, HIV/AIDS and strikes
   also influence absenteeism. Historically, South Africa is riddled by national strikes and
   protest marches. Should labour and management fail to reach a suitable agreement
   during negotiations and provided adequate notice has been given (as laid down in the
   Labour Relations Act No 66 of 1995), a strike situation will exist and this results in
   erratic transport systems, wide scale absenteeism and ultimately loss of productivity.


   HIV/AIDS is most prevalent social issue influencing absenteeism in South Africa today.
   Mid-year estimates for by Statistics SA for 2007 revealed that 11% of the population,
   approx 5.3 million people is HIV positive. Of those infected, 1.1 million people require
   anti-retroviral treatment but only 300 000 are currently receiving it. In 2005, the Actuarial
   Society of SA put the average workforce HIV infection rate at 18.8% (ranging from 10%
   to 59% in different industries) with the major cost to the economy around R2 billion.
   HIV/AIDS adversely results in workforce deaths, high absenteeism and even higher
   production costs.
                Fig 1




                Source: http://www.cch.com/absenteeism2007


As seen in Fig 1 above, personal illness features as the leading reason for absenteeism (34%).
This includes flu, back pain and HIV/AIDS. Interestingly enough, it was also found that in terms
of leave to deal with family issues, women are most likely to call in sick due to their children
being ill or hurt (22%). Stress and the entitlement mentality are level at 13%.


Identifying the Effects of Absenteeism and Lack of Engagement

When a company has an absentee problem, it has a profit problem. Indeed, absenteeism can
take a financial toll on any business, be it a small business or a multinational company. But
there are other significant effects associated with excessive or unmonitored absenteeism:
    1. Decreased Productivity: A team is composed of people doing interrelated tasks. If one
        fails to deliver, it creates a domino effect on productivity. When an employee is absent
        but is integral to daily work functions, others take his place and their own primary
        responsibilities and motivation suffer.

    2. Demotivated Employees: Those same employees who are at least present, even if not
        fully engaged, lose enthusiasm for their work. If the fact that they are compensating for
        the absent employee is not recognised, morale, engagement and retention are also at
        risk.

    3. Customer Loyalty and Satisfaction: It's obvious; employees are the backbone of any
        company and its customer service. As productivity and morale decline, so too will
        customer loyalty and satisfaction.

    4. Increased Costs: Overtime, temporary staff and lost productivity increase the overall
        costs not otherwise catered for by the company.

    5. Job Dissatisfaction: Employees monitor absenteeism of other employees. If these
        absences are allowed to go unchecked by management, they invariably lose respect for
        the company’s leadership. This may lead to overall dissatisfaction and could result in
        labour turnover if not addressed.



Calculating Absenteeism and Monitoring Possible Trends

Measuring absenteeism allows HR and management to determine the extent and reasons of
absenteeism in order to take corrective measures. The international absenteeism rate is 3%.

Calculating the Total Time Lost

                      Total number of days lost due to absence over the X
Total Time Lost period__           Average number of employees X total 100%
=               workdays for that period


Calculating the Absence Frequency Rate


        Absence             Number of absence incidents over the period__
Frequency       Average number of employees employed over that same period


HR calculates the total time lost and absence frequency every month or period for every depart­
ment or group in a department and every category of absence, namely sick, authorised and
unauthorised.

Analysis of Stats and Identifying Trends: The measurement and recording of absenteeism
stats means nothing if it is interpreted, monitored and acted on. HR needs to use these figures
as a diagnostic tool to identify problems. A comparison between groups or departments can pin­
point trends. HR can identify withholding of services, incorrect authorisation of authorised leave
at peak periods, unacceptable unauthorised leave and possible needs for discipline.




Exploring Solutions


    1. Address Debt in the Workplace: Companies are encouraged to hold employee
        workshops facilitated by trained debt counselors and where possible address affected
        employees in individual sessions. If the interventions are successful, they can bring
        about a decrease in absenteeism.


    2. Create an Absenteeism Policy: By recording and analysing employee absences, a
        company can pinpoint problems/trends in the company and implement an effective
        attendance and absenteeism policy. Take note of popular ‘sick days’ and the most
        common illnesses that occur and the associated costs. Introduce a rule in the company
        that requires employees to contact their immediate supervisors to report their absence
        for the day, before a certain time. Make it clear that the employee must be able to
        provide a satisfactory explanation if he fails to make the report himself. The employee
        should repeat this procedure for each day of absence or give an indication of the
        duration of sick leave and date of return. Scrutinise doctors’ certificates. Is the doctor
        close by to the employee’s place of residence? Usually if an employee is travelling over
        a 60 km radius to see a doctor, something is wrong. Is it the same excuse/ailment every
        time? Is the doctor merely taking an instruction from the employee as to what is wrong
        with him? There is patient confidentiality but nothing stops a diligent manager from
        calling a doctor to confirm the issuing of a sick note


    3. Conduct ‘Return to Work’ Interviews: It is useful to introduce a ‘Return to Work
        Interview Form’ for the immediate supervisor to complete each time an employee
        returns from sick leave. This will serve as a form of ‘visible’ management of the problem
        as the company will be seen to be addressing matters as they arise and will also
        discourage those regular ‘entitlement’ offenders.
4. An Effective Employee Assistance Programme: This includes wellness programmes.
     Employers need to think of their contributions to these programmes not only in terms of
     the provision of a benefit to employees but as an investment in productivity for the
     company. An example that has been used in SA to good effect to date is the provision
     of a flu injection to all staff at the employer's expense. Employers would not be able to
     compel employees to have the injection but may even consider providing an incentive to
     employees to do so on the basis that this investment is likely to pay off in a reduction in
     sick days. Most medical aid schemes offer wellness and testing days. Employees are
     tested for blood pressure, sugar, and body mass index (BMI) and are encouraged to get
     active by joining a gym and buying and eating healthy foods.



5. HIV/AIDS Policy: The challenge posed by HIV/Aids to business in South Africa
     demands that the nation's corporate leaders address the pandemic with far greater
     urgency than ever before. The economic argument for treatment is simple: sick
     employees cost the employer money; an economically viable workplace HIV
     management programme costs less. The experience of a large South African telecoms
     firm is that HIV positive employees on a HIV treatment programme via the medial aid
     service provider took fewer sick leaves than their HIV negative colleagues. The service
     provider needs to link directly to the GPs who are providing the patient’s consultation as
     well as antiretroviral (ARV) therapy to the patient. The service provider is pivotal in
     providing this intervention to all HIV positive employees. All affected employees are
     provided with their ARV’s directly and there is no need to book time off to sit in queues.
     This drastically reduces unnecessary time off.      Employers are also encouraged to
     handle HIV related incapacity with empathy and efficiency as it reduces prolonged
     exposure to harsh office conditions which tend to exacerbate the symptoms.


6.    Presenteeism: Employers must be aware that this phenomenon and find out what
     problems of this nature are affecting their employees. This would, in most instances,
     have to be done through education and obtaining information on a voluntary basis,
     given that medical testing of employees (unless to do so is required in relation to the
     nature of the particular job concerned) is prohibited under the Employment Equity Act
     No 55 of 1998. Confidentiality in relation to disclosures that are made may also be an
     issue. Employers are most likely to succeed in this regard if employees perceive that
     the employers have their interests at heart and are intent on helping them to overcome
     their problems. In so doing, the company will also be helping themselves by reducing
     presenteeism and thus improving productivity. Formulate a policy, guidelines for
     granting assistance and provision to safeguard the company against possible abuse of
     the benefits and which deal with relevant issues such as medical testing, privacy and
      confidentiality.


   7. Ask Employees What They Want and Implement What is Possible: Suggestion
      boxes and surveys that seek anonymous feedback about the workplace provide
      information    about   interest   and   engagement       among      employees.   Often   what
      management thinks is most important to employees isn't always. Implementing many of
      these suggestions are free or inexpensive. Casual Fridays or a spontaneous jeans day,
      allowing interested employees to up skill themselves in other departments is engaging,
      motivating and is great for succession planning. Time off for community involvement
      and charity does everyone good. It also makes them appreciate what they have. Offer
      bursaries, training and hold recreational events that are inexpensive can make
      employees feel involved with the company. An engaged employees are absent less
      often.


   8. Religiously Reward Great Results: Don’t save recognition of good work for annual
      functions and performance reviews. Recognition does not have to be monetary; in fact
      studies verbal praise is more effective, so are gift certificates for goods or services or an
      afternoon off.     All employees provide some benefit to the company. A recognised
      employee is less likely to be absent.


   9. Provide a Good Working Environment: As much as possible, make sure the
      environment employees work in is clean, technologically updated and pleasant with
      ergonomically correct office furniture or machinery. Provide a lounge where employees
      can eat or take a break and make sure occupation health and safety procedures are
      followed.


   10. Keep the Lines of Communication Open: Enforce absenteeism policies but do so
      effectively and judiciously. Other employees are watching how someone struggling is
      treated and it will impact their impression of the company. However, the employee who
      is clearly just disinterested and disrespectful does need to be disciplined or dismissed.
      Be flexible and proactive in devising         short-term solutions like working from home,
      non-traditional hours or a reduced work week. There are an increasing number of
      parents or mums who wish to remain at home to care for young children while
      maintaining their positions at work. The key to a successful home-based office is to
      structure it so that the company and clients sense no difference in work performed in
      the home and work done in a regular office. Have a day care or crèche at work so that
      their female employees can bring their kids to work. Employees will be less tempted to
      call in sick if they can bring their child to the crèche at work.

Conclusion
Employee absenteeism can be a nuisance that if left unattended can become a significant ex­
pense to any company which includes in loss of productivity. It affects every business in
different ways. Absenteeism does not discriminate and affects individuals no matter their sex,
race, or religion. It is important to acknowledge that absenteeism has consequences and most
importantly that it costs companies money. And in these tough economic times, unscheduled
absences cost companies in turnover, sick time and replacement costs.

It’s the nature of the beast. Employers will do well to recognise this and try to counter its effects.
An engaged employee is less likely to be habitually absent. Let them know what is expected
and routinely reward them for their efforts. Acknowledge the external factors that cause
absenteeism, draw suggestions form the employees on how to handle these issues and
implement programmes and policies to assist and guide employees.

It may not eliminate absenteeism from your workplace but it may very well decrease levels and
foster good employee/employer relations.




Sources:

    www.researchover.com: ‘Title: Understanding and Controlling Worker Absenteeism’

    http://ideas.repec.org: ‘ILR Review, ILR School, Cornell University, vol. 50(2), pages 304-
    323’
    www.labourlawhandbook.co.za
    www.busrep.co.za: ‘Business leaders must catch up to HIV/Aids effects in workplace’
    February 14, 2008
    www.busrep.co.za: ‘Presenteeism causes greatest loss to companies’ February 7, 2005
    www.themercury.co.za: ‘Debt puts consumers in greater health risk’ December 3, 2008
    www.themercury.co.za: ‘Back troubles cost R1.2bn a year for firms’ March 10, 2009
    www.themercury.co.za: ‘Flu most common reason on sick notes’ October 22. 2008
    www.capetimes.co.za: ‘Pick 'n Pay stores remain open despite strike’ August 29, 2008
    www.thestar.co.za: ‘Bus halt strands thousands’ March 16, 2009,

    www.answers.com/topic/absenteeism
    http://www.LethiaOwens.com
    Health Management, Book 2, Dr Susan Steinman, 1st Edition, published by Services SETA,
    pages 32 - 48
    Human Resource Management, PS Nel et al, 6th Edition, published by Oxford Press,
    Southern Africa, pages 548 – 553
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