Managing Absenteeism

Caroline McEnery writes:

Absenteeism is a substantial cost for every business in Ireland. Previously figures released by the Small Firms Association suggested that absenteeism from work costs small business €793 million per annum. Research conducted by the SFA suggested that the average staff member in a large firm is absent for ten days annually while the figure for small businesses is six days per annum but the knock-on effects can be more severe in smaller organisations. This study took place throughout Ireland and covered all sectors of Irish Business, it indicated that there is a marked differences across sectors and regions, and showed that small firms with less than 50 employees, are less likely to have workers absent on sick leave than larger firms.

The national average for absenteeism is 3.5 percent, or eight days annually. In small firms, this is six days, in medium firms eight days and in large firms ten days. The absenteeism figures are highest for call centres, at 6.1 percent, with metal and engineering work next at 5.1. Paper/printing and publishing is 2.8, while wholesale distribution and transport is 2.3 percent. In cash terms, absenteeism costs small businesses with sick pay schemes an estimated €793 million per annum, based on average earnings of €149 per day or €37,400 per annum. However, these figures do not take account of other direct costs such as the requirement to replace absent staff with other workers or overtime payments, and the cost of medical referrals; or of the indirect costs such as the effect on productivity and quality, the increased work pressure on other colleagues, and the admin time in managing absence. It is estimated that the overall cost in reality could be in excess of €1 billion.

How can the company manage this issue?

Back pain or injury and stress are the most commonly cited problems on medical certs. It is essential that Employers ensure that they are fulfilling their duty of care to their employees by including manual handling and work-related stress when conducting risk assessments as part of their review of their Health & Safety Statements.

In the current difficult economic environment, it is important to foster an attendance culture within your organisation and ensure that you tackle both short and long-term absenteeism. In many cases, back injury could have been prevented by an effective control program and ergonomic design of work tasks. Controls should include correct training in regard to lifting techniques i.e. Manual Handling Training which is a legal requirement for all employers in Ireland.

In tackling absenteeism, you must have a clear and comprehensive sick leave policy. The sick leave policy should cover a number of key areas namely:

• notification procedures
• certification procedures
• sick leave payment
• referral to company doctor procedures
• return to work procedures

The consequences of failure to follow the sick leave policy must be clearly outlined. All staff should be fully aware of the policy, each member of staff should be issued with the policy in writing and they should be asked to sign to confirm that they have read and understood it. It is vital that management implement the policy within the organisation in each case. All staff should be treated equally under the policy in order to prevent any claims of unfair treatment or discrimination arising.

There are two types of absenteeism which are of concern to employers – short-term absenteeism and long-term absenteeism. Short-term absenteeism can cause the most disruption to employers in terms of sourcing last minute cover for the employee. In this regard, it is important for line managers to conduct return to work meetings with employees who have short-term absenteeism. These meetings involve a meeting with the employee to ascertain the reasons for the illness, whether they are fit to return to work and the likelihood of the illness reoccurring. It is advisable to conduct these meetings when the employee returns to work, especially in cases where employees have a high level of frequent short-term absences or where the organisation has high levels of short-term absenteeism. Line managers must monitor absenteeism and if a pattern emerges for one employee or if there is a high incidence of absenteeism the issue may become a disciplinary matter.

Where an employee has gone on long-term absenteeism, it is important for an employer to maintain contact with the employee to understand whether it is likely that they will return to work in the future. The employee on long-term absenteeism should continue to submit sickness certificates and keep the employer updated on their likely return to work date. An employer should have a policy which allows them to refer an employee to their own Company Doctor. This independent assessment will give the employer an indication of when the employee can return to work or whether the employee will require alternative employment in the organisation. If the employee is on long-term absenteeism for up to 12 – 18 months, you may wish to consider terminating them from your employment. This is a serious decision to take and should be based on medical advice and whether there is no alternative employment available for the employee.

Overall, managing absenteeism is a tricky area for an employer to navigate. Nonetheless, given the costs associated with absenteeism, it is beneficial for employers to be proactive in managing absenteeism within their organisation.