Reduce your company's absenteeism
Cutting absenteeism improves your companyâ€s chances of success.
I have always felt that there is a strong correlation between absenteeism and senior management effectiveness. When dealing with companies, we find that when the absenteeism rate is low you always get a perception that senior managers are in control of all the issues.
When it is high you feel that there is no drive to achieve best practice, and if something as simple as sick absenteeism management is being overlooked then other, possibly more important, issues are also being ignored. In most cases where there is high absenteeism we find that the management control is poor. Fair but strict discipline results in low absenteeism.
Companies should place more emphasis on managing absenteeism better and they should use it as a benchmark to measure their managers. It is relatively easy to determine the absenteeism rates but to measure management effectiveness is a bit more complex. A simple measure would be to look at the share performance of listed companies. This is, of course, also influenced by a number of other factors but over a long enough time period there is a correlation between absenteeism and financial performance.
We advise clients to ensure that the absenteeism management is part of their Key Performance Areas (KPAs) for Human Resources and line managers. In this way, if they manage the absenteeism correctly then it will improve their overall evaluation when it comes to promotions, increases and bonuses.
We often find that absenteeism is not a KPA and therefore there has been no major focus on absenteeism. The reason for absenteeism not being part of the KPAs may be because the company does not regard it as important. It may also be because the company has not evaluated what the overall important KPAs for the company are. This should form part of the company’s strategic planning process.
Today there is software that researches and detects productivity and absenteeism problems within companies. Reports can be regularly reviewed and clients have access to their company stats and benchmarks online. This can then be backed up by absenteeism management, wellness and productivity programmes.
One usually finds an immediate reduction in absenteeism when such an approach is taken. In some instances it’s not sustained because management loses focus and unnecessary absenteeism creeps up again.
To be successful, the company needs to introduce a process, which is entrenched and applied consistently. There needs to be complete buy-in from management. We sometimes find that the management team expects miracles cures without effort by just introducing an absentee programme. But they do not provide the support to ensure that it is effective.
Management effectiveness can be studied by, among other things, comparing the percentage of employee absenteeism by supervisor. Usually absenteeism is localised to one or two supervisors. If the rate of absenteeism is localised, the answer is obviously under-trained supervisors. If new employees cause any excessive portion of the absenteeism figures, again, the company’’s hiring procedure may require revamping to ensure that dependable people are hired.
Other factors to consider in the battle against absenteeism are that sometimes employees call in sick when they really do not want to go to work, and that workers who have child care responsibilities find it difficult, if not impossible, to have a perfect attendance record. In the latter case, flexibility may be the best strategy. A better attendance strategy may simply include flexi-time for people who have children or parental responsibilities, should aim to reduce unplanned versus planned absenteeism.
A possible way of combating culpable absenteeism is to introduce a pay-for-performance compensation system, by means of which employees earn money based on their individual productivity. The key strength of such a program is that employees see a direct correlation between what they do and their pay checks.
Such an idea and similar ones won’t work in every situation, however. They could backfire if not approached with circumspection. It should also be borne in mind that good employees don’t need the carrot-and-stick approach and might find these ways offensive, unfair or unnecessary.
We’ve estimated that absenteeism costs South African companies about R200 for every man-day lost (calculated on an average salary of R5000/month) and R600 a day when taking into account the indirect costs of labour replacement and lost productivity.
The bottom line is that when the absenteeism rate goes down, the company saves money. If managers can control absenteeism in their departments and motivate their staff so that they are happy, healthy and productive, then the company will be successful. If the company is constantly paying staff to be absent, then there isn’t going to be much money to pay out management incentives and bonuses.
Johnny Johnson is the CEO of absenteeism management specialists CAM Solutions.