Part 1 - policy & procedures
Reducing costs from the inside
Doom-and-gloom tales about the state of the ailing economy are prevalent at the moment and companies large and small are reportedly taking drastic steps to save money.
But if panic has not yet set into your organisation and there are no full-scale redundancy programmes in the offing, consider taking alternative action by reducing costs from the inside, holding on to the staff that you have and using the time to get your house in order.
There may be some initial outlay to adopting this approach, but you could also find that the benefits are significant.
One way of doing it is to look at the issue of sickness absence within your organisation. Sickness absence is expensive, but implementing well-drafted policies and procedures effectively could help to save you money.
Better management of the problem can likewise reduce it greatly. Some years ago, a big brand car manufacturer decided to develop full sickness absence policies in order to try and reduce its sickness absence rates.
Although the initial outlay in time and expense terms was around £200,000, the resultant 15% cut in sickness absence levels saw the company save about £11 million.
The relative figures in your organisation may be significantly lower than these, but the message is still the same: make an initial modest investment now and see huge benefits in the near future.
Drafting sickness absence policies
Policy development is something that you may have been avoiding for years and I can almost hear readers’ brains going into shutdown with the sheer dreariness of my next sentence.
A good, well-drafted policy is vital. Sorry. But it is important to set out the attendance standards that you expect of employees and to provide clear and systematic procedures for dealing with absence.
It may be dull, but once it is written and implemented, you should start to see changes in attitudes towards absence.
As a basic guide, a good policy should set out the following information:
- The standards expected of staff in regard to attendance
- When and how to report sickness and to whom
- When certification may be required and in what format
- What happens in cases of unauthorised absence
- The company policy on sick pay.
It should also be made clear that following company sickness absence procedures such as reporting to managers appropriately is the responsibility of each employee and failure to do so could result in disciplinary action.
Implementing sickness absence policies
Policies should always be communicated to staff clearly and managers must be trained in how to apply them equally to everyone. Policies should also be provided to all new joiners and made accessible elsewhere, perhaps on the company intranet.
But despite this, motivating managers to deal with sickness absence effectively can be tricky, especially where they have little understanding of the true cost of sick leave.
Therefore, as part of their training, it is useful to show them of what such costs consist and to suggest ideas for what the money might have been spent on if it hadn’t been wasted on persistent absences.
But also remember that costs are not just generated by having to pay someone who is not there. Other additional direct costs often include paying for short-term replacements (usually at a higher rate) or paying higher overtime rates to other staff members.
Indirect costs, on the other hand, frequently include things like the impact of reduced customer service.
Once managers’ initial training period is over, however, emphasis should be put on ensuring that they implement policies consistently. Either HR or relevant line managers should also be responsible for keeping full and accurate absence records, which include the duration of any absence and the reason for it.
Enforcing sickness absence policies
A good policy is great but useless if not implemented consistently and fairly. Sporadic enforcement can lead to even more problems if employees feel that they have been treated less favourably than others – in this instance, you could end up with discrimination claims against you.
Policies, therefore, must always be implemented and monitored effectively. Also consider putting systems in place to cover different scenarios: for staff reporting in to managers; managers reporting to HR; managers communicating with absent staff or handling their return-to-work.
Line managers should likewise be tasked with keeping an eye on staff attendance levels and taking action if certain ‘trigger’ points are reached.
For example, are they aware of when the company is entitled to contact an employee by telephone if there are perceived to be problems? At what point can staff members be visited at home? Under what circumstances is it necessary to consult an occupational health adviser?
Effective computer systems can highlight patterns of absence and bring them to managers’ attention, enabling them to take action if, say, an employee has more than a set number of days off in any 12-month period or more than a certain number of days off consecutively.
Reviewing sickness absence policies
Ensure that your sickness absence policies are reviewed on a regular basis. Ask yourself if they are working effectively? If the main emphasis is on coping with the effects of absence, it may be beneficial to re-work them in order to place more weight on identifying causes and helping staff come back to work more quickly.
Think about ways in which you could change your working environment or offer benefits that might help staff to lower their stress levels and improve their health.
If you can afford it, offering subsidised gym membership or other sports facilities is one option. Companies offering such schemes have certainly reported fewer absences and fewer stress-related medical complaints.
Bringing your dog to work
It may still be unusual in the UK, but US-based research (where around 75% of all companies allow employees to bring their dogs to work) suggests those offices that welcome canine companions see dramatic improvements in morale, lower stress levels, enhanced co-operation between colleagues and a drop in absenteeism.
A Connecticut-based national trade group surveyed small and large companies across the US, including law firms, ecommerce companies and retailers. The results showed that those with pets around had lower absenteeism rates, employees who were more willing to work overtime and higher overall sales.
The American Humane Association also reports that taking Fido to work contributes to increased staff morale, productivity and camaraderie. And remember that happier and less stressed employees lead to better job performance.
You’ll need to devise a policy, of course, but for many businesses, the practice of allowing pets at work has proven to be hugely beneficial.
Helping staff return to work
Where a member of staff is absent for an extended period, say, more than four weeks, consider initiating an action plan to help them return to work safely. The plan could include activities such as a medical assessment or physiotherapy, with the aim of assisting them in making a quicker recovery.
If the employee is unable to go back to their original duties for the time being, evaluate whether it is possible to offer them alternatives while they recover. With the assistance of an occupational health professional, they may be able to make a gradual return to work.
Another option is to offer a balance of office- and home-working until the individual is able to return to their role full-time.
But make sure that any return-to-work programme is carried out in consultation with the employee concerned as well as with medical advisers. Also be aware of the possibility that their condition may fall under the Disability Discrimination Act. Therefore, always take advice before undertaking any interventions.
Conducting return-to-work interviews
All staff members should be subject to a return-to-work interview in order to help discourage absences that are not genuine. Such interviews also enable managers to identify possible problems earlier than if sickness absence was not monitored.
Many sickness absences are related to stress and often the individuals themselves are unaware that their illness was caused by workplace pressure. Discussing employees’ absence with them can help to identify these issues and enable an early intervention.
On the other hand, if you do not already have a sickness absence programme in place, now could be an ideal time to develop one.
As the current economic climate has seen many areas of the business slow, you may find that people are both more willing and have more time to devote to internal policy matters. And what better way to prepare the organisation for an eventual upturn than to ensure that your sickness absence policy house is in order?
Part 2 - problem absences
Dealing with persistent short-term absence
To try and tackle persistent short-term absence, it is important to make it clear to all employees that your sickness policy is of primary importance to the business.
Reiterating the company’s policy and procedures regularly and making it a regular feature of news updates and other correspondence with staff will reinforce the fact that it is considered a significant issue and is something that you are keen to monitor and deal with effectively.
Making personnel aware of general levels of absence across the business will also help them to put their own absence record into context and may make them realise that regular absences are unacceptable and unusual.
It is vital to understand which particular problems your business faces before you try to tackle them. As a result, accurate records are crucial in order to assess what is going on.
It may be that a small number of people are responsible for a high proportion of your total absence record, but you won’t know if this is true or not unless you keep accurate records.
You will also be unable to monitor the types of absences that occur or check your absence levels against averages elsewhere in your sector. Reports to this end are published regularly by the Chartered Institute of Personnel Development and the Confederation of British Industry.
Bear in mind that these comparisons serve as an indication only and that small companies may have lower levels of absence than larger businesses. Such research does act as a good starting point, however.
Another consideration in this context, however, is monitoring which areas of the business show the highest absence levels. Evaluate what the possible causes of such absence may be - for example, stress, poor management or the type of work involved.
The sooner that reasons are identified, the sooner you can address the problem and get people back to work.
To this end, you may also wish to conduct interviews with managers and hold meetings with employees in order to find out where any potential problems lie.
Group sessions with staff could involve brainstorming the most common causes of absence, for instance, but such discussions may also help to highlight matters that you are unaware of such as problematic management styles.
Prevention is better than cure
Employers are increasingly taking steps in the early stages of their relationships with potential new employees in order to reduce the likelihood of costly absences.
It is perfectly reasonable to set out the standards of attendance required at this stage and to make enquiries as to whether job candidates will be able to achieve them. It is not reasonable, however, to make assumptions about individuals based on their circumstances or their personal characteristics.
More and more employers are likewise carrying out pre-employment health checks on new recruits. Although this may prove costly initially, some businesses find it beneficial in the long-run if such checks contribute to an overall understanding by staff of the importance attached to workplace attendance.
A less costly method though could be to issue questionnaires and investigate responses further if necessary. Of course, this is a sensitive area and employers must handle it carefully in order to avoid claims of discrimination, for example, by people with disabilities.
If handled sensitively, however, such activities provide a good opportunity to find out whether any additional support will be needed to enable new recruits to meet the standards of attendance required.
But this focus on attendance levels shouldn’t stop there, but should rather continue throughout their full term of employment. One option here is for organisations to consider including absence levels in their appraisals systems. The idea here is to take action rather than wait until the situation has become a serious problem.
Making absence a part of staff appraisals also gives both managers and employees the opportunity to look at the figures and discuss any potential issues before they get out of hand. If it is routine to discuss the matter with all staff members, it should be relatively unthreatening and easily dealt with.
But managers should ideally review the sickness absence situation not only with individuals, but also at the departmental level. This is because discussing overall team absence levels encourages people to think about the reasons behind them as well as possible ways to reduce them.
Conduct or capability?
Another point worth thinking about is when you last reviewed your sick pay provision. If it is unusually generous contractually, you may inadvertently be encouraging higher levels of absence than you need to.
While it is important to make provision for those who are genuinely sick, it may be a good time to evaluate your policies and make any necessary alterations. A well-drafted policy should allow for contractual sick pay to be withheld or reduced at the company’s absolute discretion.
But also consider whether it would be beneficial to allow for sick pay to be conditional on, say, receiving medical treatment or counselling in appropriate circumstances.
Example: The monitoring systems that you have put in place mean that you have now identified that Keith is starting to develop a pattern of short-term absence. He frequently takes Mondays off and every few months also takes between one and four days’ sick leave for a variety of complaints. What can you do?
Persistent absence is potentially a conduct as well as a capability matter. If Keith is taking time off unnecessarily, it is likely that he is involved in some degree of misconduct.
Alternatively, if he is suffering from genuine problems, he may have a good reason for taking the days off. The problem is that, while he is absent, he is incapable of performing his duties.
The first stage in dealing with the situation is to investigate it fully - this is where effective record-keeping is vital. Keith should then have any concerns brought to his attention in an informal interview.
The aim here is to find out whether there is anything that you can do to help. Also be careful to evaluate whether Keith is under too much workplace stress.
If there is no subsequent improvement in his behaviour following the meeting, however, consider whether you should issue a formal warning under the disciplinary or capability procedure.
If a warning is deemed necessary, it should be accompanied by a time-frame to enable Keith to show improvement as well as clear goals. He should likewise be made aware of any potential action that could be taken if things don’t get any better.
It is important to behave reasonably, however, and to give Keith the opportunity to discuss any issues that may be relevant and of which you are unaware. Early detection can save a lot of time, money and distress later on.
But do ensure that any action you take in his case is consistent with action that has been taken against other employees in the past.
If Keith initially improves his absence levels improvement within the allotted time-frame, but his attendance subsequently deteriorates again, his attendance will need to be monitored and the procedure followed again rather than jumping straight into a dismissal situation.
A further thought is ensuring that you always keep in contact with employees while they are on sick leave - but do refrain from bombarding them with calls or emails. It is important to try and strike a balance between support and harassment, particularly if there is a possibility that the illness is work-related.
Handling persistent or long-term absence
In cases of persistent or long-term absence, obtain medical evidence and discuss the situation with the employee concerned. Your contracts or handbook should specify when medical reports can be requested, for example if an employee has been off work for, say, six weeks.
Consider any information carefully - is there anything that could point towards a disability, for instance?
If holding formal meetings, it is recommended that you allow the employee to be accompanied by a colleague or trades union representative. Give serious thought to any requests for flexible working or adjustments that may help them improve their attendance and work more effectively.
If there is no other alternative, dismissal may be an option, but it should be the last resort. Tribunals are often very sympathetic to staff members who have been ill and will want to know that you did everything you could before dismissing them.
Where dismissal is contemplated, it will be necessary to follow the Acas Code and any other internal procedures.
While there is evidence to suggest that high absence levels may be linked to poor motivation and a lack of job satisfaction, a complete overhaul of work activities or role-restructuring may be out of the question.
An alternative may be to consider whether you can accommodate flexible working requests, however. This is because many absences that could be categorised as ‘sick leave’ are, in fact, related to domestic responsibilities.
If an employee only needs an hour or two to deal with a domestic problem, a lack of procedures to deal with it may mean that they call in sick for the whole day instead because they believe that they would be prohibited from taking any other type of leave at short notice.
Improving working conditions
Again, to tackle this situation, it is important to start with a good policy and procedures. Ensure, for instance, that there are ways for dealing promptly with requests to work part-time or flexibly.
Also evaluate whether there is scope for allowing people to work from home every so often or for permitting time off for domestic emergencies, providing that time is made up at a later date. Such measures could drastically reduce the pressure felt by staff and lead to much lower levels of ‘sickness’ absence.
Health and safety audits and screening opportunities are another option that may enable both employees and managers to address any concerns that they have before they become major problems.
Developing a stress management policy is a good place to start here as introducing initiatives to deal with the issue can save a lot of time and money in future.
Improving working conditions and having a clear support network for all staff members and managers is advisable and, where finances allow, the introduction of schemes such as telephone support lines can prove a valuable tool in reducing absence.
A growing number of companies are likewise seeing the benefits of offering health screening and access to clinics as well as sport or health centre membership.
And while it may seem like a good deal of expense now, such changes can have a big impact on absence levels, helping to ensure that the business becomes a healthier and more profitable one.
The full version of this article was first published by our partner HRzone
Part 3 - presenteeism
What is 'presenteeism'?
‘Presenteeism’ can have many meanings.
On the one hand, the term can refer to employees who feel that they need to be at the office for longer than everyone else in order to show the boss how dedicated they are.
On the other, it can apply to staff members who turn up for work when really they should be on sick leave – and it is this group that we will deal with here.
In the second of this three-part series, we explored the issue of absenteeism, which many employers are now starting to take more seriously. But the same is not necessarily true of presenteeism. A key issue in this context is that many employers are failing to get the balance right.
Although it is important to manage sickness absence and help people get back to work as soon as they are able, it is also vital not to lean too far the other way and create an environment in which they feel obliged to attend work regardless of whether they are fit enough to do so or not.
Although still not widely recognised, presenteeism costs employers almost twice as much as absenteeism. The Centre for Mental Health calculated that presenteeism caused by mental ill health issues alone costs the UK economy around £15.1 billion a year, whereas absenteeism comes in at ‘only’ £8.4 billion.
As for causes, it is widely thought to be the result of a growing ‘long-hours culture’. Some employees appear to believe that, if they stay at their desk for longer, they are more likely to be noticed and, therefore, rewarded with promotions and pay rises.
Leading by example
Others seem to feel unable to leave the office if the boss is still there in case it looks like that they are less devoted to their employer, while yet others apparently feel under pressure to make it into work no matter what because of a pervasive presentee culture or because they are concerned about job security.
In some instances, managers may also have been so concerned about stamping out ‘unauthorised’ absences that any, whether genuine or not, are now frowned upon.
While this situation was traditionally more of a problem in professional services sectors such as accountancy and law, in more recent years it has also spread to other businesses too.
But it is a serious problem and one that managers must address by leading by example. Employees cannot be expected to take time off to recover from illness if their own bosses carry on regardless as it sends out the message that everyone should attend work, regardless of their state of health.
Inevitably, if employees are terrified of taking time off for fear of reprisals, presenteeism rates will almost certainly soar.
Staff may struggle into the office and ‘bravely’ carry on, but they will in the process be both less productive and pose more of a health and safety risk because of the danger of passing on germs to colleagues, which just results in the cycle repeating itself.
While Tesco and the Royal Mail were praised in the press a few years ago for tackling absenteeism by giving prizes to personnel with clean absence records and restricting company sick pay, the problem is that such approaches can lead to people turning up to work when they should be at home.
Restricting company sick pay to just a few days a year is one way of addressing an absence problem, but employers should take care to draft policies giving themselves absolute discretion as to the level of sick pay that will be provided.
Introducing a blanket policy of paying basic statutory sick pay to all staff members after, say, just a few days’ leave risks boosting presenteeism as a lot of people would rather struggle into work than lose valuable wages.
Instead employers should ideally operate a flexible policy that not only allows them the discretion to grant full pay to individuals with a genuine reason for absence - if, for example, they are recovering from an operation - but also enables them to handle more suspicious, habitual and problematic absences effectively.
But what else can be done? When a sick employee turns up to work, the best thing that an employer can do is send them home on sick leave.
Such action addresses the initial concern of spreading germs to others and removes any potential risk caused by staff members who are not operating at 100%. This is a particularly important consideration in situations where employees are operating potentially dangerous machinery.
But employees should likewise not be encouraged to work from home or to stay at work if they are ill - and all managers should be suitably trained to tackle the issue.
There is no point in having a policy that is intended to discourage presenteeism if managers on the ground are still making workers feel bad for taking time off.
But many employees also say that they work when ill because of a belief that no-one else is available to cover their workload, which means that it would simply not get done.
Therefore, if possible, ensure that everyone knows who else can help them out if they need to take time off work.
There are many ways to tackle both absenteeism and presenteeism that shouldn’t cause too much upheaval. Here are some possible options:
- Permit staff to carry over sick days from one year to the next. One ‘flu season’ may be much less severe than the next one and people may have years in which they are healthier than others. Allowing them to carry over unused sick days may help to encourage proper recovery. If someone is concerned that they will lose their contractual sick pay halfway through a severe bout of flu, they are very likely to struggle back into the office regardless of whether they are fit to do so or not.
- Provide staff with the opportunity to take up screening or vaccination in order to try to avoid them succumbing to illness in the first place.
- If at all possible provide employees with health and fitness facilities, or at least subsidise access to such facilities, in order to help them maintain year-round health and better equip them to fight off illness.
- Find out if your healthcare provider provides telephone assistance or a website that staff can access for healthcare advice. Some suppliers offer additional occupational health visits to offices in order to advise employees on ways in which they can reduce repetitive strain injury and other workplace-related problems and injuries.
- Provide support for those personnel who cover absent colleagues’ work and offer incentives or rewards for the help that they give. Also make sure employees know that, if necessary, a temp or locum will be brought in to cover their workload if there really is no-one else in the organisation who can help while they are off.
Another consideration is that sickness-related presenteeism is linked closely to general presenteeism, of which the Chartered Institute of Personnel Development’s definition is people feeling “obliged to work longer hours than are necessary simply to impress management”.
Many employers now acknowledge that staying late in the office does not necessarily mean that employees are more productive - or even doing any work. However, the perception that such activity is necessary is proving hard to eradicate.
Staying late for the sake of it, or because it is expected, is not conducive to the creation of a productive environment. Moreover, situations where the general work culture makes staff members feel that they still need to be at their desks at 8pm often has a knock-on effect on sickness absence.
Therefore, if presenteeism is starting to become a serious problem, employers may find it necessary to hold meetings with individual employees in order to explain how seriously the matter is being taken.
If no improvement results, as in the case of persistent absenteeism, disciplinary action may be required. It is important that everyone understands that ‘playing the hero’ and turning up to work when they really should be at home is simply not acceptable.
The cost to business of absenteeism, presenteeism and other sickness-related absences can be huge. But with the right policies and procedures in place as well as a healthy dollop of effective management, the situation can be tackled without having a big or negative impact on employees’ day-to-day lives.
The full version of this article was first published by our partner HRzone
Kate Watson is an assistant solicitor at legal firm, Curtis Law LLP.