You don’t even have to pick up the phone anymore to call in sick. Today, skipping work can be as simple as sending a brief text or email message to your supervisor.
But that simplicity can come at a cost in terms of lost productivity and other consequences. Yet in an age of obsession with data, many companies still don’t track employee absences, nor do they address the reasons behind them, which can sometimes have more to do with stress and lack of motivation than physical ailments.
According to data from the Conference Board of Canada, employee absenteeism cost Canadian companies $16.6 billion in 2012. The average rate of absenteeism in 2011 was 9.3 days for a full-time Canadian worker.
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“The impact is assessed differently depending on whether the organization calculates absenteeism as a percentage of the total payroll,” says Claudine Ducharme, health and benefits consulting partner for Eastern Canada at Morneau Shepell.
“But the impact still results in direct and indirect costs, with the indirect costs being three times as much.”
Most companies don’t track absenteeism
Despite the impact, many companies fail to track absenteeism. “[Small- and medium-sized businesses] blame a lack of resources while the big corporations don’t seem to care,” says Julie Cousineau, a senior consultant at consulting firm Normandin Beaudry.
The Conference Board of Canada’s statistics also revealed that only 46 per cent of employers tracked absenteeism. And only 15 per cent measured the direct cost of it.
Companies avoid following up on absences because it’s rarely a pleasant exercise, says David Willows, vice-president of strategic market solutions at Green Shield Canada. He stresses, however, that at some point, the conversation has to take place.
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“Nothing threatening, no talk of disciplinary action. You have to meet with the employee to send a message and come up with solutions. A single meeting of this type is usually enough to fix the situation.”
In some cases, such as unionized environments, employees may see the number of absences granted by the employer as a benefit, says Willows. “I have seen examples of strong union-management partnerships where the parties jointly worked to manage health, absenteeism and disability to good statistical results,” he says. “Where that level of partnership does not exist, you can see positioning by a union which says sick leave is a negotiated benefit and they may resist management’s efforts to institute administrative controls. Without appropriate due diligence and followup in place, absenteeism is inevitably higher.”
Big impact on the bottom line
For employers, absences can have a significant impact on the bottom line.
“Income-replacement benefits and insurance premiums are the direct costs employers have to pay,” says Christine Potvin, assistant vice-president for group disability at Sun Life Financial. “Indirect costs include lost productivity, replacement costs and training. In the end, day-to-day business management is also affected.”
Still, many absences aren’t due to illness, she says, noting personal commitments, family obligations, stress and lack of motivation play a greater role in absenteeism than the odd cold or bone fracture. “Given these findings, why do employers keep asking for a doctor’s note?” asks Ducharme.
They do so because of the impact of absences, says Cousineau, noting “a four- to five-per-cent rate of absenteeism — considered average — represents two to three weeks of absence per employee on an annual basis, a substantial loss of productivity and efficiency.”
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That’s why it’s important for companies to keep in mind that having healthy and productive employees is key, says Willows.
“A motivated employee will show up to work even if she feels slightly under the weather, unlike the one who is always looking for an excuse to leave. This is where you see the difference that measures targeting physical and mental well-being can have on human capital.”
It’s also important for employers to understand that managing casual absences can help prevent long-term issues, says Potvin. “Managing short-term cases properly helps employers act on the causes of employee absences.”
It’s an issue that will only grow in significance as mental health plays a growing role in absenteeism, says Johanne Potvin, vice-president for risk management, workplace accidents and disability at Aon Hewitt. “Doing nothing means taking a big risk, especially since the World Health Organization predicts that by 2020, depression will be the primary cause of absenteeism.”
Best practices and tools for managing absenteeism
Given the current economic environment, few employers can afford to overlook absenteeism and the subsequent loss of productivity. But addressing the issue does involve a delicate balance.
“This issue raises a few challenges for companies, such as having a good grasp of the overall situation, dealing with confidentiality clauses and [having] the potential to act,” says Ducharme.
“Team managers do not always have the skill set to detect the warning signs and provide the necessary support.”
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To ensure best practices and effective monitoring, the human resources department may take a strategic role in addressing absenteeism, but the day-to-day responsibility will usually fall to frontline managers, says Willows. “Best practice would see frontline management, where the day-to-day relationships with employees live, being the front line for managing absenteeism. Certainly, there is a broad strategic and management training role for HR, but they are usually too disconnected from the day to day to have the impactful discussions with employees that are struggling to make it to work.”
But Ducharme says the responsibility falls to everyone to a certain degree, including the immediate supervisor, the management team and union representatives, if applicable. “If employees are responsible for their health, employers are responsible for creating and maintaining a healthy and stimulating work environment.”
But team leaders may not have the right tools at their disposal. As a result, they may not take actions such as making special arrangements for returning employees or even do simple things like welcoming them back personally, says Sun Life Financial’s Potvin. “It seems simple but it really isn’t. If the executive committee makes this a priority that requires tools, then HR managers have to develop a management program.”
An absence management program should include communication with doctors, says Ducharme. “The treating physician is also an important part of the process since the doctor is the only person who can determine the tasks the employee can handle based on his or her medical condition.”
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Also, employees should contact their managers on the first day of an absence, says Aon Hewitt’s Johanne Potvin.
“Employees should speak to their managers directly on a regular basis to maintain contact and facilitate the return to work,” she says.
“Some companies even hire outside absence managers to validate the overall process.”
Keeping in touch by phone is important but it can be tricky. “Some questions just cannot be asked without violating confidentiality laws,” says Sun Life’s Christine Potvin.
“But you can still inquire about the obstacles to an employee’s return to work, the type of absence and arrangements that can be made to speed up the return.”
Also, the human resources department should handle employer contact for file management purposes, says Aon Hewitt’s Potvin. Doing so helps maintain a healthy distance between administrative personnel and employees on disability leave and reduces the risk of them viewing any contact as harassment.
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And when it comes to tools, Cousineau goes back to the need for data, emphasizing the need to go beyond the overall rate of absenteeism to look at the specific circumstances.
“Too many managers only look at the rate of absenteeism without taking leaves lasting more than five days into account, which often tell the whole story,” she says.
“For example, a company may record new and very short-term disabilities and have the same absenteeism rate as a company with fewer but longer leaves. Yet these are two completely different issues that impact organizations differently, especially in terms of rechannelling workflows.”
This article originally appeared in Benefits Canada’s sister publication, Avantages. As part of ongoing coverage of this issue, Benefits Canada is also launching a new regular column, Absence Management, that will appear in coming issues of the magazine.
Update, May 20, 2016: Comments from David Willows modified from original magazine article.