Why managing absenteeism matters

A recent Citrix Survey of 580 Australians reports that at least 50% of the workforce will be remote for the remainder of 2020, and there is some debate as to whether a workforce will ever look the same as it once did. This has meant HR managers have had to pivot swiftly to manage a remote workforce, and one of the key issues around this model is managing staff absenteeism.

Even before the pandemic, absenteeism was a costly problem, averaging $3,608 per employee per annum. In fact, it costs, on average, around $305 per day when a worker is absent. This is not just a loss of efficiency and productivity, unnecessary absenteeism makes up around 7% and 8% of total payroll costs when direct wages and indirect costs are factored in. Commercially, absenteeism can end up detrimentally affecting your balance sheet.

Causes of absenteeism

There are a couple of issues preventing organisations from effectively managing their absenteeism currently: Complexity of the issue, and remote working.

Average absence rates in Australia are around 3.5% to 4.2%, or between seven and nine days per employee per annum. Australia has very generous sick leave entitlements, around 10 days per year, which has led to a ‘sickie’ culture. This short-term absenteeism is the most problematic absence of all, accounting for 90% of all absence cases.

There are personal and organisational factors that contribute to absenteeism. Personal factors include short or long-term illness, carers leave and mental health problems. Organisational factors include increased workload, a toxic workplace culture, poor relationships, lack of flexibility, rigid workforce planning, poorly designed or mundane work, lack of management support, and a loss of sense of purpose.

Absenteeism gets put in the ‘too hard’ basket

Changing organisational culture to reduce absenteeism requires a company-wide, strategic approach, so is often put in the too-hard basket. Therefore, absenteeism continues, unchecked, placing strain on other employees carrying the load, and leading to valuable staff disengaging and exiting a business.

The other current issue is around managing the absenteeism of a remote workforce, both practically in terms of a lack of reporting of leave, and also due to the increased health concerns and risks of a scattered workforce.

DHS found last year, 40% of organisations do not proactively track and monitor absence, and this was pre-pandemic.

Reasons for this include:

  • A lack of understanding of the issue
  • A feeling of powerlessness to do anything about it
  • Poor data capture
  • Inadequate monitoring and tracking
  • Tolerance of an unacceptable level of absence (an entitlement culture)
  • Privacy concerns
  • Lack of clarity around who is responsible
  • Inadequate employee health support
  • Outdated technology
  • Lack of analytics
  • Low manager engagement

Technology to solve absenteeism

The health and wellbeing of a workforce is important to organisational productivity and employee engagement. The more proactive organisations are engaging their employees in managing their own health and attendance, and are reaping better organisational performance outcomes.

Absenteeism can be seen as an opportunity to improve the health and wellbeing of a workforce, particularly now as the workforce operates remotely and health and wellbeing concerns are top of mind.

Fortunately, there are a number of telehealth solutions to manage absenteeism using purpose-built technology, and the benefits speak for themselves. For example, using a solution like AbsenceTrack, an industry leading leave management software, absenteeism can be reduced by 25% - 40%.

By using an absence management program, absenteeism can be managed consistently and with minimum administration. Organisations can gather data to drill into absence to better understand the causes of absence. By analysing reasons, patterns, and trends, absenteeism can inform organisation strategy and help solve issues before they become crises.

An organisation that has good attendance makes for a happier workforce and a better balance sheet.


Unlock the value of centralising absence management

Centralising the management of absence has a number of benefits for both the short and long term.

Evidence shows by using a centralised absence management system, absenteeism can be reduced by 25% - 40% a year, and even more in some industry sectors.

A centralised platform allows employees to call a dedicated number to report an absence, detail the reason for the absence, upload evidence, and ensure absence information is correctly captured. It also ensures evidence for leave is retained, consistent communication of policies and procedures, and provides HR and business leaders with a complete organisational visual.


Embrace real-time data

Capturing absenteeism data facilitates early notification alerts of absence sent in real-time, and accurate data reporting and data collection, including the duration of absence and the reason/s behind the absence. Via a portal, data is easily accessed and can be viewed at the organisation-wide, department and team level, giving the kind of insights not possible with home-grown systems or excel spreadsheets.


Track trends

Using the power of business insights (BI) fueled by data, an organisation can benchmark and track absenteeism in real-time, to support early intervention and to identify key issues and trends before they become organisation-wide problems.

It also provides a wealth of data for organisations to use to identify patterns and trends and benchmark these against similar industries. The data can clearly identify whether there is a group or system-wide issue, and whether management or policies should be reviewed, and if intervention is required.


Offer support

When an employee reports an absence to a centralised location, they can immediately be informed of leave policies and procedures, and their responsibilities, to ensure a robust and consistent approach across an organisation.

As an added boon, the organisation can then provide immediate and confidential advice and support for employees who are unwell or injured, facilitating their recovery. For example, as a part of AbsenceTrack is AbsenceAssist, a 24×7 absence recording and nurse-led health advice service. Employees receive confidential health advice around the clock to improve recovery and overall wellbeing.

A centralised database with individual employee records is also advantageous for understanding why employees are taking time off with detailed reason analysis, and also for compliance in terms of any return to work requirements needed.


Stay on top of risk management

Centralising absenteeism facilitates risk management. A centralised program can promptly identify if there is an uptick in illness or injury so the organisation can intervene to make a workplace safer. Serious cases can be escalated to the appropriate department and communication can be instantly dispatched.

This practice is particularly relevant during a pandemic, when organisations need to monitor and track possible infection and disseminate information quickly to employees regarding testing and isolation measures.


Reduce administration

When administration is cut, management becomes more proactive, addressing issues as they happen, and not after the fact or on a piecemeal basis. Live absence data feeds can also be sent to departments such as payroll, to reduce double-ups and ensure balance sheets are more accurate.

All this saves time, effort and money in the management of absenteeism. For example, DHS implemented an absence reporting line for a major telecommunications provider in Australia, which resulted in a 45% reduction in absenteeism, saving $4,000 per employee, per annum.

Similarly, a food industry company with 2,000 employees had a 27% absence reduction and $850,000 in annual savings after implementing a centralised absenteeism program.

Centralising your absence management has a lot of benefits and they are not all monetary. By clearly communicating policies, uploading evidence, and gathering data to track trends and by offering health support, absenteeism is reduced and the workforce is happier and healthier.

 To find out more about why mastering absenteeism is critical to strengthen your business, download our free guide. Complete with factsheets, checklists and quick tips, this guide is critical for any organisation serious about managing absenteeism now, and for the future.

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