Any serious discussion on sick absence case studies and initiatives often focus on the topic of ‘measurement’- how as an employer will you know if you have a sick absence ‘problem’ or challenge? How will you be able to work out if management of absence has worked or not?, what will ‘success’ and ‘failure’ in the project look like? In short, how can you measure the amount of absence in your organisation and what impact is it and will it have on your business?
These are all critical issues to address if you are to address absence management. I think you have to go back to first principles and ask yourself why is there a need to measure in the first place? There is the old management mantra which goes along the lines of “you can’t manage what you can’t measure”. That is to say, that if you don’t know how well or badly something is doing, then you can’t improve it. This is still sound stuff today and the first thing you need to understand as a well being or absence management practioner is how you are going to measure the historical and current level of absence to establish the degree of the problem and how you will manage any project to manage or influence/improve it.
There are numerous ways to measure sick absence but the most popular and certainly the most important in my experience, is a) the amount in days off that employees take and b) the cost to the employer of that absence. Now a) tends to be the easier of the two to establish. Through one HR management IT tool or another you need to work out the total absence taken by people over a reporting year for example and divide that by the number of employees to give an ‘average’ level of absence per employee. If say, you employee 100 people and total absence in the last 12 months was 700 days, then that would work out at each employee on average taking 7 days absence a year. This can then be your benchmark- the 7 days is what people are taking and it is that figure that you need to consider to improve.
But the 7 days per employee is one thing but what does that mean? Is it an acceptable figure or not to you? The second issue is the impact that level of absence has on your business. A practical way of looking at that is the ‘cost’. Normally the cost is looked at in terms of hard money- what is the cost to you of someone being off sick on average 7 times a year? Now this cost will depend very much on your sick pay policy. If you are very generous like the Public Sector, then the first six months of sick absence entitles the employee to full pay. Let’s say that the average cost of employing someone (pay, national insurance and pension contributions) is £20,000, then 7 days absence would cost around £550 per person or £55,000 for all of employees. If you have a turnover of say £1m then the sick pay cost is 5.5% -not insubstantial. But there are other costs too . Whilst you may be paying for someone who is sick, what about the work that needs to be done in their absence? You might be paying overtime for someone to carry out their work or even engage a temporary member of staff. If you do not then there is the cost of lost productivity etc.
So you can already see in this –admittedly simplistic – example that as an employer some simple measurements can alert you to the level of absence in your organisation and the kind of impact it is having on your business, and it allows you to think if this is acceptable and whether you need to address the problem.