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. 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