Costs of Absenteeism in the UK
Published and surveyed by The Confederation of British Industry (CDI) in 2003 revealed £11.6 billion was paid to pay and cover staff absence, which is an average cost of £476 per employee. (Mind your Business 2004). This is an improvement on the previous years. It is at lowest rate in 15 years but costs are still growing presumably for the rising price of labour. (Roberts, P. 2003)
"Lower rates of absence means costs are likely to be lower, overtime bills may be reduced; business planning will be made easier; good attenders will not feel that they are being regularly asked to take on the work of poor attenders; output may be higher or sales or whatever the "product" of the organisation may be higher". (Bolton, T. & Huges, S. 2001)
Causes of Absenteeism
To manage absenteeism successfully you have to know the root causes of absenteeism. Causes of absence are divided into three major factors, these being individual factors, the nature of the job and environmental factors. These can range from general attitude to attendance at work, to organisational issues such as management styles and the effectiveness of organisational processes and procedures. There are a number of factors external to both the individual and the organisation such as ease of travel to work. It is important to recognise that absenteeism is not always and employee-centred problem. When investigating the causes of high levels of absence it is wise to consider all possible contributing factors.
Being absent from work can always have many reason. Here are the top fives:
1) cold or flue
2) stomach upset or food poisoning
3) headache and migraine
4) back problems
5) stress
Individual Factors:
Age and gender is an important point to look at, for instance personal problems and family sickness could lead an individual to be absent. Motivation, Satisfaction and the morale of the employee are playing a big role for non-attendance. Dissatisfaction for instance due to excessive demand or because of non integration in the workplace group could also effect to absenteeism.
The nature of work:
Leadership and management style can be a big influence in the efficiency of the performance of staff. The style should be appropriate to the circumstances.
Environmental Factors:
An important factor could be the intensity of unemployment and the current national economy. If there is a high unemployment due to recession in the economy than probably the levels of absence may be low.
A second external factor is the location of the workplace, the supporting infrastructure, and the ease of travel to and from the site.
(Bolton, T. & Huges, S. 2001)
Long Term versus Short Term Absence
89% of absence is short term. Even though, long term absence is the real problem. According to the PR Newswire "Every week approximately 3,000 people move from long-term sickness to ongoing incapacity benefit. Of the 2.7 million people now receiving incapacity benefit, only 30 people rejoin the workforce each week "Also 75% out of the average cost of sickness (£400 out of £476) per employee is for the long term absentee. (PR Newswire 2004)
The top five causes of long duration absence
Condition % Days of Four Weeks Absence or More
Joint disorders/ arthritis 96.6%
Surgery 77.5%
Anxiety/Depression 75.6%
Stress/Shock 73.4%
Back pain 55.9%
Source: IRS, (2003) Tackling long term absence (3)
International Comparison
Many research has be done in many areas but unfortunately I have not found anything more up to date than this from 1998. It shows the UK having relatively low levels of absenteeism compared with other international countries. (Appendix 2) These figures whatsoever are 6 years old and cannot be used anymore but nevertheless, these international absence rates can be used for interpretation today, since most of these countries used in the CBI's research had little and in some cases no changes in some of the most important factors that influence rate of absenteeism. Factors such as national culture, definition and measurement remain almost unchanged. Appendix 2
Tescos Purpose
Tescos plan is to run three pilot schemes designed to deal with staff sickness. One pilot scheme denies staff sick pay for their first three days away ill. A second offers staff three extra days of holiday, which would be wiped out by the first three sick days they take. The third offers staff vouchers for products in store in exchange for a clean sick record. A Tesco spokesman said: "These schemes are designed to encourage staff to plan absences. We're not trying to penalise the genuinely sick. (Grocer, 2004). The Tesco's scheme won't deal with long-term absence. It may well cut down on the irritation factor of staff throwing 'sickies', but it won't necessarily cut down on the overall costs of managing absence by that much." (PR Newswire Association , 2004)
"It cannot realistically be addressed by short-sighted schemes, such as not paying staff for the first three days they are off sick. While these schemes will discourage some people from taking "sickies" they also run the risk of forcing people who are genuinely ill into work. Absence levels could even go up as people "stretch" their absence to get the sick pay they feel they are entitled to". (Financial Times 2004)
Solutions to minimize Absenteeism
During their research the Chartered Institute of Personnel and Development (CIPD) found that one fifth of employers are still not recording the causes of sick leave .(IRS 2003) However the first logical step of trying to solve a problem is to be fully aware of it.
"Duvet days"
A "duvet days" or also called "lifestyle days" is an annual bank of short-notice leave days to allow for funerals or attendance at school sports days, or, in the case of duvet days, those times we simply do not feel like working. A few companies have introduced US-style by now. (Donkin, R. (2004)
The return-to-work interview
"The most effective tool for dealing with absence management that employers named in both the CBI and CIPO surveys is the return-to-work interview. Many employees would not take casual absence if they knew that on their return to work they would have a discussion with their line manager about it" (Roberts, P. 2003).
Evans says: "The return-to-work interview provides reassurance to those who have been ill off work because they know their absence has been noticed and their employer is aware of the situation. They also succeed in scaring the pants off people who have been taking days off when they aren't sick."
Flexible working
"A third of respondents questioned by Crown Computing said they would be less likely to take unauthorised time oft work if they were offered more flexible working opportunities" (Roberts, P. 2003). Companies, who using this model have already a decrease in absence.
Absence on Sport Events
Tesco claimed that absenteeism occurred more during sport events than on regular days. According to Financial Times "Companies can measure the way absence rates go up around popular sporting events and rates can be compared between employment sectors. Fact is that 49% of British workers are not allowed to watch sport events during work time.
1.4 Million Male workers were planning to skive for watching the World cup, which cost British firms £142 m in lost productivity and so on. (Western Mail 2002)
CNN wrote: "Ultimately, if employees are given the choice to watch key matches it may result in reduced absenteeism and a more responsible approach to personal workloads."(Easen, N. 2004 )
Conclusion
This report clearly shows that absent management is a necessary step for companies to take. It is apparent to conclude that absenteeism is relevant to all business areas, and it becomes harder to monitor as the business size grows. It is very important to understand the variety of causes of absence. Human Resource Department need to know what methods of reducing absenteeism are available to them and how to implement them. "Managing the risk rather than cutting pay or offering bonuses, though, is a much more effective solution to absenteeism", said Alan Aldridge, managing director of Active Health Partners.
Bibliography:
Aldred, C. (2004). U.K. employers addressing absence risks; Concerns over lost productivity, costs boost interest in rehabilitation. Business Insurance, 6th Sept
Bolton, T. & Huges, S. (2001), Absence Management. Oxford: Chandos Publishing
Donkin, R. The curse of the sick note can be lifted: The recent British Airways dispute has focused attention on the problem of absenteeism, which has many causes - and several sensible solutions. Financial Times. 26th August 2004, p 30.
Easen, N. When sports fever invades the office, http://edition.cnn.com/2004/BUSINESS/06/10/go.office.sports, Retrieved on 21st October 2004 at 18.10
Financial Adviser, (2002). Businesses losing out on GBP370m a year due to absences from the workplace 4th December
Financial Times (2004). A chronic problem: Measures to tackle worker absenteeism are a welcome start. 23rd August p 16
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PR Newswire Association (2004), Work Foundation Welcomes Tesco Sick Pay Initiative but Warns that Long-Term Absence is the Real Worry. 17th May
Roberts, P. (2003) Pulling a sickie. IHC (Independent Healthcare Consultancy). September
Western Mail, (2002). Millions plan sick day off. 19th April