Absence management and why it’s important to you

Employee absence is the largest non-recoverable cost to your organisation and is costing Australian and New Zealand based businesses dearly every year. In Australia, the cost of sick days and time theft is estimated to be as high as AUD $30 billion. Meanwhile in New Zealand, ‘sickies’ as they have become known account to a combined 303,000 lost work days each year.

Absence is important to you for many reasons. There’s the loss of output and productivity. In small or even medium sized businesses, workforces are often lean, leaving others to pick up the slack and potentially causing a delay to work being completed. Missed deadlines can upset loyal clients and customers, creating a risk to company reputation and revenue.

New Zealand’s Wellness in the Workplace survey revealed that one in five employers believe that staff take paid ‘sick days’ as a form of additional perk. The research was carried out by Business NZ, Southern Cross Health Society and law firm Gallagher Bassett. So which employees are most likely to take a ‘sickie’ in the form of non-genuine leave? According to the research, those in the 20-30 age group are the most likely. They are followed by those aged 31-40, then 41-50. The least likely to take a sickie? The youngest of workers (less than 20 years) and the oldest employees (those over 50).

In an interview with Human Resources Director magazine, Peter Tynan, Chief Executive of Southern Cross said that whilst it’s impossible to understand the true level of ‘non genuine’ sick leave, employers should look closely at their internal culture as well as estimate the proportion of sick-days that are not genuine. According to Tynan, it’s crucial that employees understand your sick leave policy and how the matter will be dealt with if they are found to be violating it.

A proactive approach to absence and employee time and attendance is crucial. Line managers play a crucial role in managing absence; making sure it’s properly recorded and playing an active role in ensuring a consistent workflow is followed. That could be speaking to an employee to ensure their absence is noted, ensuring they provide the necessary documentation and proof from their medical practitioner as appropriate. There may also be return to work interviews.

According to Southern Cross’ survey, the top three approaches identified by employers for dealing with absence are:

So how can line managers spot abuse of your sick leave policy?

The right training is a good start. Knowing how to deal with absence and how to challenge employees won’t necessarily come naturally to everyone. Make it easy for line managers to report absence properly — or perhaps even give employees the ability to register their absence online with cloud based HR software that has an integrated online portal. The right HR platform can help you to detect patterns. These are early warning signs that an employee is taking leave when they are perfectly OK. With real ailments and illnesses, there’s typically initial symptoms, a couple of days of illness and then a couple of days of recovery. That’s why sickness that arrives and disappears in a single day is a bit out of the ordinary. Where this happens frequently — and especially on the same days each week or month, then that’s a red flag that needs to be investigated. Employee attendance software (or employee time tracking software) can help to spot these patterns.

Mondays and Fridays are days to watch out for. They are known to be days that people sometimes use to extend the odd weekend.

When patterns are spotted and the misuse of sick leave is suspected, line-managers need to use tact, their personal judgement and arrange a meeting with the employee to discuss. Vicki Caisley, Chief People and Strategy Officer at Southern Cross Healthcare recommends tracking the data visually and then discussing it with the employee.

“If you can show them the data you’ve recorded and discuss the impact that pattern is having — not only on their own work performance but that of their colleagues — that’s usually enough to start a conversation about whether there are other issues at play and whether the leave is genuine. Often there will be an immediate change in behaviour or genuine reasons for the increased absenteeism that will give the employer a pathway forward.”

Vicki Caisley | Chief People & Strategy Officer, Southern Cross Healthcare

You might need to dig a little deeper to see if there are wider issues that need to be addressed. As you look at patterns of absence, is the leave higher in one department than others? (Perhaps led by a particular line manager or supervisor?) Is there anything specific to your company policy around holidays and leave that could be causing the problem? Finally — where individual employees are suspected of abusing the system, is there an underlying issue that they need help with? It could be a personal issue that isn’t easy for the employee to share — especially if it relates to something sensitive like mental health or a family issue. Perhaps you could refer them to your employee help program if one exists?

Whilst unauthorised absences and sick-leave are a scourge in both Australia and New Zealand, there is something of a paradox going on. In Australia, the average public-sector worker takes eight or nine sick days each year. However, Australians have a massive amount of untaken sick leave. This is exacerbated by presenteeism where people feel the pressure to be in the workplace even when they are genuinely in no fit state to be there. That could be due to a simple illness, burnout or even a stress related condition. Therefore, businesses have some way to go in order to encourage people to take their fair share of leave entitlement.

While ‘non-genuine sick leave’ can be a significant cost to the business, it’s important to note that employees have the right to access their sick leave without providing an employer details of their ailment. In New Zealand if the employer wishes to see evidence of genuine illness within the first three days of sick leave, the employer must meet the costs of the doctor’s visit (although may not dictate the medical practice). After three days of sick leave, the employee is required if requested to provide a medical certificate justifying illness at their own cost. In Australia proof at employee’s expense can be requested after one full day of sick leave. Often when an employee takes ‘non-genuine sick leave’ it may be because of the environment they are working in, so it’s critical that all contributing factors are taken into consideration when assessing a potential leave policy violation. In addition, the events of the past two years have radically changed the relationship that employees and employers have with sick leave, and the expectations each have of how, and when, it is appropriate (or required) to use it. So while it is important to avoid abuse of sick leave, to save money and reduce disruption to delivering great customer experiences, it is just as important to consider circumstances, environment, and expectations around sick leave, as part of overall Absence Management.

In conclusion — the potential impact of absence is too large to be ignored in the workplace. With the right systems and technology in place, your people are certainly in a stronger position to spot those tell-tale patterns and have the impartial evidence needed to engage their teams with confidence.