Controlling Absence Levels

September 14 2006 - A survey of top Irish organizations has found that almost 65 per cent of companies do not calculate the annual cost of absence to their business and have no idea what impact it has on their direct or indirect costs.

The report by Mercer Human Resource Consulting argues that in the current economic environment the cost of employee sick days can have an impact on overall competitiveness so it is important that organizations review and manage their absence procedures. Effective reporting and measurement can drive behavioural change particularly when supported by senior management.

Kevin Kinsella, consultant with Mercer Human Resource Consulting said:

"Our experience in this area and indeed our research demonstrates that reporting and measurement of absence plays a very effective role in reducing absence levels. However, many companies take a casual and sporadic approach to absence management and fail to actively manage a major cost driver."

Key survey findings include:

• About a quarter of respondents (26 per cent) estimate the cost of absence to be in excess of €500 000 per annum.
• Minor illness is cited as the most common cause of lost days (33.2 per cent).
• Musculoskeletal illnesses and back pain account for almost 20 per cent of absences.
• Recording of absence is the number one tool in combating absence levels (identified by 90 per cent of companies).
• A fifth of organizations (20 per cent) reported absence levels of over 6 per cent per annum.
• The majority of organizations (65 per cent) do not calculate the cost of absence to their business.
• Some 45 per cent of managers with responsibility for managing absence receive no training in the area.
• Similarly, 41 per cent of managers with responsibility in the area have no formal targets.

Kevin Kinsella added:

"Our survey clearly reveals that while senior managers are highly aware that 'absence management' is an issue for their business, very few companies are taking an appropriate, strategic approach to reducing absenteeism in their businesses. There will always be short term absence in organizations. Mercer's experience and research suggests that there is no one 'magic cure' to manage sickness absence. The introduction of a range of simple measures such as; absence reporting, early interventions on health issues, the provision of health insurance and the provision of support and training for line managers, can however, dramatically reduce absenteeism levels."