BUSINESS: The Ultimate Resource

April 2003 Upgrade #7

ACTIONLIST
Absence Management
Getting Started
In the United States, the annual cost to employers for time lost due to accidents is almost $100 billion. To make matters worse, over 50% of employees injured never return to work. Absence management is a growing body of knowledge and experience applied to the control and reduction of these costs.

FAQs
Is there anything I can do to manage absence without risking claims of discrimination? Absolutely. Its not easy, but there are several things you can do to protect your business, particularly:

understand the scale of the problem you are facing; discover the causes; take a positive and methodical approach to the solution.

More information about all these is given later. Can the effects of absence be measured? Just as for workplace safety audits, you can measure the number of days lost per department or individual. You can also trace the type of absence, whether injury, illness or other. These have their uses but are fairly blunt instruments. A different type of measure is the Bradford Factor, which takes account of the fact that persistent short spells of absence are much more costly and disruptive than occasional longer absences. It measures irregularity of attendance using the formula: Bradford Factor = S x S x D where S is the number of spells of absence over the last year and D is the number of days absent in the same period. For example, if an employee is absent for one period of 15 days, the score is 1 x 1 x 15 = 15 points. If he or she was absent for 15 separate days, however, the same persons score would be 15 x 15 x 15 = 3,375 points. This is perhaps only a crude measure, but one that employers practiced in the art of absence management regard as a realistic comparison of disruption.

Making It Happen
Formulate a Policy The most effective absence management policies are those based on the following principles:

Bloomsbury Publishing Plc 2003

BUSINESS: The Ultimate Resource

April 2003 Upgrade #7

balance concern for cost with concern for people; keep people informed; collect quality information.

Balance Concern for Cost with Concern for People The value of an absence management policy, if followed and analyzed, is increased productivity and profit for the company. However, the policy must reflect human values of fairness and respect, and managements duty of care for employees. Rather than focusing on policing the policy, and suggesting that employees are malingerers, hypochondriacs, or cheats, successful approaches emphasize care, positive thinking, and shared responsibility. The policy should be concerned principally with managing the effects of genuine sickness absence, while acknowledging that some may be suspect or exaggerated. Keep People Informed Effective programs communicate to employees the aims of the policy and responsibility for its application. Discussions with staff should be about presence, rather than absence, and the avenues available to help them get well. Depending on the nature of the absence, benefits and services might include counseling, job retraining, job sharing, extended sick leave, and so on. Remember that federal and state laws are designed to help employees truly in need, and your policies need to be complementary with those laws. Collect Quality Information Its essential to know what you are dealing with, both in terms of absolute levels of absence and the patterns shown by individuals and groups. Differentiate between regular days off, frequent short-term absences, and long-term absenceeach may need a quite different approach. Supervisors and HR staff should develop skills for discussing absence with employees, not in an adversarial way, but as a means of spotting problems and offering help early. They should also observe patterns of absence and behavior, and particularly changes in these things. Records should be maintained. When managers and others show that they are interested and will follow up, sickness rates almost always decline. The Goal Is Return to Work The shared purpose must be to get the employee back to his or her work as soon as is reasonable. This is especially the case after a prolonged absence, when it will be important to maintain the relationship with the employee and help him or her to become productive again. The possibilities for modified or transitional roles to help the employee back into work should be looked at very carefully. If properly constructed, these can be very valuable jobs for all concerned. Its worth creating an inventory of roles that can be modified to meet different physical conditions. You will often need to put together a team of people to handle these cases, as medical and occupational health information will have to be considered alongside working conditions and perhaps legal requirements. The supervisor plays a key role in maintaining contact with the employee and identifying suitable transitional work during their recovery and return. The employee also should be a member of the team.

Bloomsbury Publishing Plc 2003

BUSINESS: The Ultimate Resource

April 2003 Upgrade #7

Other Practical Considerations However you plan your absence management policy, there are certain actions that will always help you to achieve a better result in this area.

Act early. If you notice increases or changes in the pattern of absence, investigate and take action before it becomes a major problem. In some companies a certain level of sickness absence has been overlooked for so long that employees regard it as an acquired right to extra leave. Seek advice from the outset. Some complex issues may arise around medical, legal, and contractual situations, so try to think through these with specialists before problems arise. Being able to act with confidence and awareness and avoid ad hoc or impulsive decisions is a significant advantage. Get managers and HR people talking about the issues togetherfor example about opportunities for transitional roles. And be sure you research the law surrounding these issues. Resource people at state and federal agencies can help, but you may also find people at local business development centers (often at community colleges) or Chambers of Commerce. Consultants, with this particular field of employment law, are another source of advice. Be methodical. Make an effort to collect data consistently and carefully; to keep good records; to see that everyone receives a return to work interview after a lengthy absence, and to communicate fully and regularly with staff about results. This way, fairness and relevance of what you are doing never becomes an issue of contention.

A Case Study The case concerns a recently privatized business in which staff numbers have been drastically reduced, just as the company refocused its attention on better customer service. The company provides services to residential customers: availability of staff is a key function of the business. They cannot afford to carry previous levels of extra staff to compensate for absence: to meet business goals they needed 98% attendance (or a 2% absence rate)an undreamed of rate in the industry. The company decided to construct an absence management policy based on three principles:

Culture and values in the company. The organization has a performancebased work culture which encourages employees to appreciate the impact their performance (and their absence) has on their colleagues and the business in general. Employees are genuinely involved in an ongoing appraisal of business opportunities, customer service, and team performance. Targets for controlling absence are set and periodically reviewed. A holistic approach. At the same time, managers express a culture of care. They recognize explicitly that, apart from unavoidable injury and sickness, many other factors contribute to absencesuch as family leave, say, for having a child or caring for a spouse, or even job related issues such as stress. The policy emphasizes the value of good employees and invests in an employee assistance program to aid the health and productivity of everyone working for the company. The organization invests in rehabilitation to deal with the full spectrum of employee problems, regardless of whether the problem is caused by the working environment.

Bloomsbury Publishing Plc 2003

BUSINESS: The Ultimate Resource

April 2003 Upgrade #7

Reporting and monitoring. The companys HR information system provides every manager with absence information, including analysis of patterns and trends and their potential impact on results. Because of the firm link established between presence (absence) and business targets, absence management is a fundamental part of all managers roles. The policy is highly visible to all staff. Results. In recent years, the companys unscheduled absence rate has been less than half the industry average for the relevant occupational groups. These results have a direct and significant effect on workforce availability and profitability.

Common Mistakes
Ignoring the Issue There seems to be a tendency for managers to believe that absence is too difficult or dangerous an area to become involved in, when in fact this isnt the case. The benefits can be very significant, not only in financial terms, but also in building employees commitment to the business. A good absence management policy may even allow the organization to avoid problems under discrimination or disability legislation by raising awareness of the whole areaand could give a fruitful lead in new areas of concern such as worklife balance issues. A Lack of Commitment to the Policy Having a policy in place is a good start, but if sufficient resources arent allocated at the outset to give the policy time to prove itself, even writing it is just wasted effort. Monitoring such a policy will avoid treating absence arbitrarily, and could avoid legal action brought by employees based on alleged discrimination.

For More Information

Books: Fitz-enz, Jac, and Barbara Davison. How to Measure Human Resource Management. New York: McGraw Hill Professional, 2001. Stevens, Mark. Extreme Management: What They Teach at Harvard Business Schools Advanced Management Program. New York: Warner Business, 2002. Topchik, Gary S. Managing Workplace Negativity. New York: AMACOM, 2000. Web Sites: IDS Study 702, Absence managementcontains several case studies of experiences in reducing absence levels: www.incomesdata.co.uk/studies/bradford.htm Matrix Absence Management, Inc.resource for disability, workers compensation, and family leave issues: www.matrixcos.com University of California, San FranciscoHR Absence Management Manual: http://ucsfhr2.ucsf.edu/absencemgmt/overview

Bloomsbury Publishing Plc 2003