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Sick leave and your bottom line: The value of managing absences
05 April 2016
Employee absence is the biggest non-recoverable cost to your business, with recent estimates putting the cost of sick days to Australian workplaces at $30 billion annually. These issues are particularly compounded for small businesses where increasingly lean workforces find it difficult to absorb the workload of absent colleagues, or who may grow resentful if they are made to do so. The costs are very real for all concerned.
For these reasons, managing absence should be an important priority for employers. It is however one that needs to be handled carefully, taking into account the circumstances of the absence and the employee's personal history.
Provide clarity upfront
Every organisation should have a clear policy for how different kinds of leave are managed and the responsibilities an employee has in terms of providing notice and documentation around absences.
Are workers expected to call if they plan to be absent or will an email or text suffice? What is the threshold for when a doctor's certificate is required? Ensure that your policy covers all these kinds of questions and make sure it is covered in all induction materials and made available to employees via the company intranet.
We all accept that some sickness absence is inevitable and most absences are genuine, but simply having to call in at a set time and speak to their manager can discourage the employee who “doesn’t like Mondays”.
This will be the most frequent kind of absence employers have to manage, and is also the kind most likely to be abused by workers wanting to take a 'sickie' or a non-genuine sick day. Clear-cut policies that provide clarity and consistency to situations will help you immeasurably with managing this common group of absences.
The importance of monitoring short-term absence especially in targeting those whose absences show a pattern, will help you separate the good from the bad. Underlying this is the expectation of correct recording and reporting procedures that are well understood in the business. Monitoring sensibly can help you reduce the risk of abuse and ensure that any underlying issues are exposed without too much damage to your bottom line.
For many managers having a conversation with an employee about their absence can be uncomfortable and challenging
Long-term absence cases can be more difficult, with many involving employees who have long- term health conditions, many of whom are long serving and highly valued. When they do need to take time off due to illness, a holistic approach to managing their absence, including their manager, HR, occupational health and external agencies, can ensure that they return to work as quickly as possible and with any adjustments they need already in place.
However, there will be cases where a return to work isn’t possible and these cases need to be managed to a conclusion as quickly and sensitively as possible. This means ensuring that the business follows both internal and legislative processes, whilst at the same time making sure that the employee continues to feel supported and valued. For many managers, having a conversation with an employee about their absence can be uncomfortable and challenging. They often don’t have the necessary skills to manage absence, so upskilling them is key to bringing absence rates down, with the resulting cost benefits to the business. Line managers know their employees better than anyone and so are key players in managing their attendance.
Addressing absence trends
Once the absence trends have been identified measures can be put in place to address them. There’s no point having a market leading approach to managing stress and anxiety if 90% of sickness absence cases are related to musculoskeletal disorders! Understanding the reasons for absence allows you to develop a proactive approach, based on preventing absence in the first place. This leaves you able to concentrate resources on the unavoidable absence cases.
Early intervention and ongoing management of absence cases is the key to achieving a rapid and sustained improvement. For example, an early referral for counselling to an employee assistance programme can minimise the absence of an employee who is absent for mental health reasons. Similarly, an in house physio service can mean a return to work quicker. This individualised approach, together with regular reviews of exiting absence cases, brings absence rates down, with the resulting impact on costs.
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Employee absence is the biggest non-recoverable cost to your business, and employers should make managing absences a priority:
- Ensure you have a clear policy in place that outlines how different kinds of leave are managed and employee's responsibilities
- Monitor short-term absences to identify any patterns and ensure correct reporting procedures are in place
- Take a holistic approach to managing long-term absences, including the employee's manager, HR, occupational health and external agencies
- Once absence trends have been identified, put measures in place to directly address them