Q+A

An avoidable absence™ is a workplace absence that should not have happened in the first place or lasts longer than necessary.

Absence Management (AM) is an organization-wide initiative designed to better manage employees who are off work. If an organization’s AM program is not properly managed, it can lead to a whole host of issues, including increased costs, reduced productivity, and poor morale. Of course, employees will have to have to take time off, but the amount of avoidable workplace absenteeism can be greatly reduced by taking a strategic approach to AM, and ensuring the proper systems, processes and policies are in place.

Avoidable workplace absenteeism has both financial and non-financial impacts for an organization. Avoidable absenteeism:

• Is costly, potentially adding up to roughly 30% of total payroll costs
• Can negatively impacts an organization’s culture and the morale of employees
• Can lead to reduced quality, production inefficiencies and errors
• May affect customer service and cause service delivery problems

In Canada, the average number of days lost per year to absenteeism is 9.3. This is high compared to other developed nations. For example, the UK and the USA have rates of 5.0 and 5.3 days respectively. Absence rates are on the rise. It’s important that employers have strong AM programs to begin reducing avoidable absenteeism.

It’s important to keep in mind the goal is not to reduce all absences, just the avoidable ones. For most organizations, a reduction of just 5% to 10% would result in significant financial savings, and an exceptional return on their investment. It makes more sense to focus on incremental improvements than to try and quantify what percent of your organization’s absenteeism is avoidable.

Many organizations think their biggest problem is abuse, but it’s just one component of avoidable absenteeism, and it’s not the most important. Here are the top five causes of avoidable absenteeism:

• Unidentified health issues
• Poor visibility and control
• Incomplete absence program and systems
• Different manager implementations
• Employees taking advantage

 

For organizations operating primarily in western industrialized nations, the financial cost of absenteeism can equate to roughly 20% to 35% of payroll expenditures. This includes both direct and indirect costs.

To quantify the impact of absenteeism in your organization, a detailed cost analysis is required. Please download the whitepaper on avoidable absenteeism to learn more.

Take me the whitepaper download page.

To begin, you will want to start by better understanding the drivers of avoidable absenteeism, and if any are contributing to the issues facing your organization. Avoidable absenteeism is often created by deficiencies in the following areas:

• Medical intervention
• Staff education
• Clearly defined accountability
• Policy and procedures
• Tracing and measurement
• Privacy and confidentiality
• Plan design
• Short-term disability and Workers Compensations case management
• Customized health and wellness programs

An audit of each of the above drivers of avoidable absenteeism will help identify how your organization compares with best practices, and how best to begin to think strategically about your AM program.

The truth is that many employers view absenteeism as a cost of doing business. The other issue is the lack of visibility of the costs of absenteeism. The cost of absenteeism is buried in payroll costs. If the cost of absenteeism was on the profit and loss statement, it would get a lot from attention for the Chief Financial Officer, and other organizational leaders.

Not enough, most likely. Absence management is a huge problem and the amount of time employees are taking off is growing in nearly every sector. However, many organizations are beginning to learn about the problem and address it properly. You can see example case studies, and the massive cost savings these organizations have realized.

Visit Statistics Canada to see data on work absence of full-time employees by industry

Take me the case study download page.

Many managers and supervisors are uncomfortable dealing with sensitive, or what they perceive to be, confrontational topics. Many times, this is as a result of inadequate absence management training. In addition, some companies have very little notification of absence reports by employees, or a process for ongoing follow up.

It’s important that supervisors be held accountable. Managing absenteeism should to be incorporated into their job descriptions, and they must be provided the necessary systems, tools and technology to effectively manage this important aspect of their role.

Engaged employees, and savings that are both significant and sustainable are a few of the biggest benefits of reducing avoidable absenteeism. Bottom line savings result from reducing both the direct and indirect cost of absenteeism. A healthier work environment can also be realized when all employees access company benefits in a fair and equitable way.

This is a great question. Yes, in order to capture significant savings over the long-term, some investment may be required. We have seen ROIs that reach orders of magnitude when absenteeism is tackled effectively.

We’ve written a few case studies that should give you a very good idea of what’s possible. For example, at Guelph General Hospital, a four-day reduction in average absenteeism resulted in a $2.8M annual savings.

Take me the case study download page.

It’s a long-term strategy. Most strategies implemented today (doctors notes policies, etc.) are short term band aids that don’t work. They are tactical. To solve avoidable absenteeism, a strategic, holistic approach must be taken.

An effective strategy takes 12 months to three years to be fully implemented – where an organization can see financial gains and cultural shifts.

An AM professional can help by providing an outside opinion – one informed by an understanding of best practices and what other organizations have implemented to successfully reduce avoidable absenteeism. A strategic approach is essential to reducing avoidable absenteeism. It must layout the business case for change and any necessary investments and involve all organizational leaders. An AM professional is well positioned to lead this entire process.

Workplace Medical Corp. employs a holistic approach that makes AM a strategic initiative and involves all levels of management. The top-level decision makers must be aware of the costs and the bottom-line managers must be aware of best practices.

We begin with an absence audit, that assesses your organization’s absence management infrastructure. Once the audit is complete, we author a strategic plan and work alongside your management team to implement our recommendations.

To learn, please visit Our Approach.

Implementing an AM strategy is good for all employees, including those in a union. When that is understood, and our processes are transparent and communicate effectively, unions see the benefits.

We have a proven track record of being able to address their requirements and thus have transformed many unionized workplaces. We have created significant cost savings in public sector workplaces where unions are strong, and absenteeism is significant.