Absence management: Do we have a problem?

Section 2 of the Personnel Today Management Resources one stop guide to absence management, covering: how to assess absence levels, collecting absence data, benchmarking absence and setting targets. Other sections.

Before beginning to develop absence policies, it is worth taking a step back to ask the most basic question: 'do we really have an absence problem?'

This is not always an easy question to answer. In practice, it is not generally possible or desirable to eliminate all absence, as there will always be instances of genuine and unavoidable sickness. In such cases, it is unlikely to be in the interests of either the individual or the employer to encourage attendance where inappropriate.

Minimising absence

The overall aim should be to minimise unnecessary or unjustified absence, while still providing support to those who have legitimate reasons for non-attendance.

Similarly, while there is no doubt the cost of absence can be substantial, it is important to ensure the proposed investment in absence management is likely to be justified by the potential benefits. If absence levels in the organisation are already comparatively low, then it may be the potential for improvement is limited.

If so, while it is still important to ensure that absence policies are fair and rigorous, it may not be worth investing heavily in proactive initiatives or interventions. Equally, if absence problems appear to be concentrated in particular parts of the organisation - for instance, in specific job types, departments or locations - it may be better to focus attention on these areas, while still ensuring consistent practice across the organisation as a whole, rather than adopting a blanket approach.

Reliable data

Therefore, as a starting point, it is critical to have reliable data about the level, incidence and nature of absence across the organisation. Although the monitoring of absence has undoubtedly improved in recent years, the CBI and CIPD surveys confirm that, even now, fewer than half of those surveyed monitor absence costs.

This is perhaps surprising, given that most employers will already have established procedures for collecting data on individual absence, both for operational reasons and to inform the provision of statutory and occupational sick pay. In most cases, employees will be required to report absence, provide medical certificates where appropriate, and so on. It is key to ensure this data is provided, collated and analysed in ways that can be used to inform management understanding of absence issues at the organisational level.

Computerised systems

The increasing use of computerised HR information systems has, at least in principle, enabled absence data to be collated much more easily.

Most comprehensive HR systems will incorporate some form of absence monitoring and control module, which will normally provide sufficient information to support effective absence planning and management. However, in introducing or developing processes for gathering and collating absence data, it is important to ensure that sufficient data is gathered about, for example:

Ideally, you should be able to link absence data directly to payroll costs to provide an automatic calculation at least of the direct costs of absence.

If it is possible to automate most of the data collection and analysis, this should provide a strong foundation on which to build organisation absence policies and practices. It also has the potential to give managers a set of practical tools to assist in managing absence on a day-to-day basis.

Collecting data manually

However, in smaller organisations, all of the above can be gathered very effectively using simpler or even wholly manual systems. The key issue is to ensure that all absence is recorded, that employees are required to record the reason for the absence against meaningful categories, and that absence levels and patterns are reviewed regularly, both by individual managers and by the organisation as a whole. Employers should also bear in mind that, on occasions, the human eye may spot patterns or trends that might not be identified automatically. For example, it may be evident to a local manager that absence levels are related to, say, work cycles, with absence increasing at stressful points, such as the end of the month.

The collation of reliable absence data is a necessary first step, but does not, in itself, answer the basic question: 'do we have a problem?' There is, of course, no absolute answer. It is not possible to define an 'acceptable' level of absence applicable to all roles in all organisations, and average absence levels vary considerably by sector, job type, seniority, location and other factors. Ultimately, employers have to make their own decisions as to whether absence levels are 'problematic', and whether a significant improvement is likely to be achievable.

External comparators

In making this judgement, however, it is helpful to begin by benchmarking absence levels against appropriate external comparators. If absence levels appear high by comparison, then it is likely there is a problem. If there is evidence that some broadly equivalent organisations experience significantly lower levels of absence, then it is likely there is room to improve your own practices.

The key issue here is to identify appropriate and accurate points of comparison. The simplest starting point is to draw comparisons with the findings of the national surveys conducted regularly by organisations such as the CBI and the CIPD.

These surveys provide national average figures, as well as data analysed by variables such as industry sector, organisation size, and region. The surveys are based on relatively large samples of respondents. This means they can generally be treated as reliable sources, subject to some potential response bias, as employers are more likely to participate in the surveys if they are already taking the issue of absence seriously.

At the same time, the potential value of the surveys may be limited by their national focus. They will be able to tell you, for example, how your absence levels compare with the average for your overall industry sector or your region, but will not provide detailed comparisons with, say, equivalent employers in your locality. It may, therefore, be necessary to obtain more precise comparators, particularly if you believe that absence levels may be affected by local factors, such as the surrounding labour market or travel issues.

Benchmarking clubs

In some cases, more precise data may be available from local or sectoral sources, such as specific industry or locality surveys. More commonly, though, it may be necessary simply to identify appropriate local comparators with whom you may be able to share or pool data. Such 'benchmarking clubs' are becoming increasingly common, enabling employers to exchange information on absence levels, issues and approaches.

On this basis, it may be possible to share not only statistical data, but also qualitative information about common absence problems, proposed solutions, elements of absence policy, and so on. This can often provide an effective mechanism for developing and disseminating best practice among a group of comparable organisations.

In practice, some care may be needed in identifying appropriate comparators. In some cases, it may be possible to identify direct local competitors who are prepared to share information. If competitor sensitivities do not allow this, it is often possible to identify organisations operating in related but non-competitive areas. These might include, for instance, regular customers or suppliers, or businesses providing comparable services to different markets.

Drawing comparisons

To take one example, if an employer were seeking to benchmark absence levels in its call or contact centre operations, it would be possible to draw comparisons with similar operations across a diverse range of industries. Identifying comparable types of operations or roles may often be more valuable than simply drawing comparisons within the same sector.

Having identified potential comparators, it is important to ensure that, as far as possible, they are being drawn on a 'like-for-like' basis. At a basic level, it is essential that common principles are being applied in calculating absence statistics - this may be particularly important if there are significant differences in working hours or patterns between the comparator organisations.

It is also important to ensure that any statistical analysis or breakdown of the data is being conducted on an equivalent basis. For example, do the respective organisations have similar definitions of role types for 'managers' and 'non-managers'? If significantly different definitions are being applied, this may distort our perceptions of relative absence levels among specific sub-groups.

Equally, it is important to be aware of any significant differences between the workforce profiles of the comparator companies. Absence levels may potentially be influenced by factors such as the relative proportions of full-time and part-time staff, permanent and temporary contracts, older and younger employees, and so on. By identifying any significant factors of this kind, you can ensure you are interpreting the comparative data accordingly, as well as perhaps beginning to identify factors that may be contributing to differences in respective absence levels.

Where can we improve?

Once you have identified appropriate benchmark comparators, you can then begin to assess whether you are facing an absence problem and, if so, begin to establish improvement targets. The first step is to assess whether your absence levels - either across the organisation as a whole or within specific groups of employees - appear to be significantly higher than the relevant benchmark averages. Clearly, even if your absence levels appear broadly comparable with external benchmarks, there may well still be scope to reduce absence levels. Ambitious employers may prefer to benchmark themselves against the most successful organisations.

As a starting point, it is sensible to focus on those areas where external comparisons indicate that real improvements are likely to be achievable. This will ensure that your targets are realistic, and that you are prioritising your efforts and investment on those areas that should bring in maximum return. On this basis, you can then begin to identify targets for absence reduction, the associated timescales for achieving these, and the expected cost reductions that will result.

Setting targets

Setting targets to reduce absence is important, but potentially problematic. On the one hand, a clear, well-publicised absence reduction target provides a focus for activity and initiatives, and helps to concentrate the minds of managers and staff on the importance of the issue. If the organisation can visibly demonstrate that a targeted reduction in absence will bring a direct and measurable reduction in costs, it is likely to have an immediate impact on attitudes to attendance at all levels.

On the other hand, the publication of an absence 'target' - that is, our aim is to reduce absence from, say, 10% to 6% over the next 12 months - can be seen to imply an acceptable level of absence. Therefore, such targets need careful presentation.

The formal position should be that no unplanned absence is desirable, but that the employer accepts that employees will, on occasions, have legitimate reasons for non-attendance. The aim of the absence management programme is to minimise such absence through a process of year-on-year improvement.

Any target is, therefore, only one step on this journey - once the initial target has been achieved, the employer will then review whether further improvements are likely or possible. On this basis, over a period of years, it may be possible to achieve dramatic improvements in attendance levels.

In practice, absence levels are likely to vary considerably across different parts of the organisation. It is not uncommon to find that, for example, management absence levels are lower than those of non-managers, or that white-collar workers have lower absence levels than their counterparts in manual roles.

Such variations may also be evident in the relevant benchmark data, and are often indicative of factors such as relative levels of job satisfaction, perceived recognition, pay levels and so on - all of which can influence employees' attitudes to attendance. It is important to recognise such variations and to ensure that you take appropriate account of them in setting improvement targets.

Nevertheless, it is preferable to set a single 'across the board' improvement target for all employees, regardless of their role or level, rather than implying that differential standards are acceptable.

At the same time, if there are significant disparities between different groups, it may also be appropriate to set some interim targets. For example, if management absence is running at 5%, whereas shopfloor absence levels are 10%, it may be sensible to set an overall long-term target of 5% for all employees. This may take two to three years to achieve within interim improvement targets set on an annual basis.

When developing responses to absence issues, it is also important to balance the application of common standards against targeted initiatives in problem areas. It is critical that consistent principles and procedures are applied across all parts of the organisation so that all employees are treated fairly.

At the same time, it may be appropriate to focus proactive absence management initiatives on those parts of the workforce where there appears to be greatest need or opportunity for improvement. To direct such initiatives, the next step is to ensure maximum understanding of the potential causes of and contributors to absence in the organisation.