subject: Wake Up an Smell the Economy! [print this page] TIME TO ATTEND TO ATTENDANCE TIME TO ATTEND TO ATTENDANCE
Companies need to focus on the bottom line, more today than at any time in the last fifty years. All businesses should know what they need to spend, what they need to do in order to fulfil their commitments, the point at which they break even, and how they deliver a profit. Their budgets are built around these considerations with a contingency built in for employee absence, because they recognise that people do get sick. But if the size of contingency is too big, they lose competitive advantage, and they lose control of their costs. And in far too many cases, the level of absence is far higher than it need be.
No company, irrespective of which sector they work in, should have attendance of less than 98%; and yet most companies think this is an impossible dream. But in my experience even 99% is achievable. It's all about what sort of workplace you create for your employees.
Far too often, companies get bogged down in the demotivating work of Absence Management' which is closing the stable door after the horse has bolted. By not paying sufficient attention to meeting their employees' needs whilst at work, managers are forced to devote vast amounts of non-productive time dealing with the fall-out of their people not being at work.
Companies have a primary responsibility to create conditions that enable people to attend work, make people want to attend work, and ensure that people are not made ill by their attendance at work.
That's the philosophy of Attendance Management. Get it right, and you'll have very little Absence Management to do!
The Absence epidemic
When times were not so tough, absence levels got out of control. The rot set in.
Of course, ppeople do get sick and it is unlikely that any company will ever have 100% attendance averaged out over the course of a year. Yet consider this: for the purposes of Emergency Control, it is customary for Governments to define an epidemic' as 4 instances of the same disease for every 1000 of population i.e. 0.4%. If we now consider that some levels of sickness' reported in many organisations are as high as 6%, and we replicate this figure across the population, it signifies the worst pandemic in history!
To make matters worse, where you see low attendance you usually, almost inevitably, see high attrition. (High attendance in high attrition cultures is only seen when companies consistently sack the absentees but that doesn't reduce attrition and we don't recommend it as your option!). The reason for this is that the problem invariably has the same source people do not want to be there.
The impact of high attrition is arguably even more damaging to a business than high absence: routine loss of skills, high recruitment costs; additional pressure on training new recruits; uncertainty. All of these have a direct impact on the profitability of the company and on how well it can serve its customers.
So finding solutions to high absenteeism levels will have a doubly beneficial effect on your bottom line! The costs in terms of lost productivity are obvious. And the real financial costs to companies are astonishingly high. For many it is the single biggest contributor to waste that they generate through their business: millions of pounds are literally being flushed away covering the costs of low attendance.
The costs of getting it wrong
Take a company we worked with recently: It employs 800 people because it needs this number in order to fulfil its contracts. Its absence level averages at 6%. This means that on any one day 48 people fail to turn up for work, (on some days this number might be higher or lower). So the work of 800 people now has to be spread between 752 people. It has to build such a high level of contingency, that it leaves itself very vulnerable to competitive pressure. None of the options available to the managers in this company are attractive:
Should they spend more cash to bring in cover and reduce margins?
Should they muddle through and disappoint customers/clients?
Should they pile undue pressure on those who remain, which may come back to haunt them at a later date?
And if you think this is bad, we've encountered companies with worse levels than these. Maybe you work in one of them. I saw a company where 8% of workers failed to turn up on any given day. It's a whopping drain on resources. Contingency' is one thing; this is playing fast and loose with the company's future.
A simple calculation will reveal the direct costs of absence in your organisation, although don't forget that the true costs are much higher. Use the following formula to arrive at the cost of absence to your company.
The Absence Equation:
Number of employers x Average Salary x % absence = Direct Cost
Example: 250 employees x 20K average salary x 5% absence = 250k direct costs
When absence levels get bad, some companies make matters even worse by getting mean. Rather than addressing the problem in an effective way (by tackling the causes and seeking to bring about a positive cultural shift), they put punitive regimes in place to start penalising people when they are sick, and thereby absolve themselves of their managerial responsibility for attendance.
It's not an effective solution because companies need to bear in mind that the cost of people being at work when they are too ill to be productive is often just as significant as the cost of people being off sick. A focus on presentee-ism' (people showing up and being at their station irrespective of their ability to be productive) might well show high attendance but it will also deliver lower productivity, and is the result of misguided thinking and poor management. It will lead to worsening rates of attrition too.
When people are genuinely sick and incapable of work, they should feel that their company will treat them well. If they don't, work becomes a place where people do not want to be and we are back into the boom/bust cycle of traditional absence management.
Why are we in this mess?
So why isn't something being done about this chronic situation? The truth is we've got complacent. It is superficially easier to suggest that our high levels of absence are in line with industry averages', than to take responsibility for creating high attendance cultures. We've grown accustomed to living with problems and we kid ourselves that they are the norm.
But it's a universal cop-out; an excuse for inaction. And who can afford to be average', anyway? During a recent meeting with a well known international bank, I was informed by one of the department managers that absence was running at 6.5%, and attrition at c 40%. The Manager stated that in his view, this was acceptable and that they (the company) could live with it. He even went so far as to say they had done all they could do to get down from the 11% absence they had previously been running at! It's a very large organisation and each percentage absence point cost the company 1million a year.
We all know what has happened to banks throughout 2008/2009. Most of them really could not afford to throw that much money away! How much better placed might they have been to weather the economic storm if they had got to grips with these issues earlier on?
Until managers switch on to the reality (or at least the possibility) that high levels of employee attendance at work are possible, and until they gain a sense of outrage at the levels of absence they are currently experiencing, they will always preside over low attendance cultures.
The bank in this illustration was in a state of denial. But what were they afraid of? Perhaps they were afraid initially, that if they adopted our programme to reduce their absence and attrition levels by half, they would have to admit that they had got it wrong in the first place. Or worse, that they actually created the situation they were complicit. They might have to admit that they have been more focused on explaining away low attendance than on doing something to prevent it. It is a very bitter pill to swallow.
One important question we have to ask ourselves is "Are people really as sick as we make them out to be, or are we simply making them sick of work?" We see lower reported absence figures in the Voluntary Sector than in the Public Sector, and yet this is a sector traditionally staffed by an older population, supposedly more prone to bouts of genuine illness.
But far too many employers prefer excuses, rather than admit their workplace is somewhere workers don't want to be. It is very common for organisations to plead a special case in order to justify or explain high levels of Absence and Attrition. Whilst every organisation and sector is different in terms of the work routine, the pace, the pressure, the environment and the workforce, these circumstances only account for a very small differentiation in absence and attrition rates. We have seen exceedingly high attendance levels in some of the most surprising places (chicken processing plants, canning industries, etc), simply because the management there have created a workplace where people want to work.
The solution
So how can companies turn around a 6% absentee level to 2% and below? Well, it's not rocket science. But it does require an acceptance that things can be better. It needs training to change mind-sets, and then a programme of dynamic procedures to be put in place. I've seen dramatic turn-arounds in a matter of months, as soon as a company decides it doesn't want to manage high absenteeism any more.
Our approach begins by focusing on Managing Attendance instead of Absence. Here's why:
Attendance' is positively framed when people set targets we are psychologically geared to hitting them, so if you focus on the more negative Absence rate' target you invite people to hit it!
Attendance' means that the focus in on 100% and every absence is a miss'.
Focusing on Attendance' means that you take personal responsibility for creating the right climate and conditions for people to want to come to work and thrive whilst they are there.
Attendance Management is not about forcing people into work when they are incapable of work through illness (as they invariably will be from time to time), but it is about making work an attractive optioneven for those people recovering from illness who are no longer incapable of work.
Attendance Management is about changing mindsetsso that when your employees wake up feeling a little under the weather or realise they have a few household errands to run, their first thought is NOT, "I think I'll take the day off" but "I'd much rather go to work today".
Attendance Management is as much focused on people being productive and fulfilled at work as it is on getting them to turn up. Having high attendance and low productivity is the result of presentee-ism' and poor management.
Attendance Management is not about preventing people being off when they are incapable of work (as they invariably will be from time to time).
The Art of the Possible
The good news is that there are companies out there who routinely operate with attendance levels of 98% and above. I know because I have seen them and worked with them. In reality, no company, irrespective of which sector they work in, should have attendance of less than this, and this figure even takes full account of the various epidemics' that hit from time to time.
And there's more good news. If the causes of low attendance and high attrition are the same, then by adopting an Attendance Management approach, you will have a positive effect on both. And if you can create a workplace where people like to work, then productivity levels will rise too. It's all good news, once you admit that there's a problem that needs addressing.
Where to start
In reality, Attendance Management starts at the recruitment stage when you identify and appoint people who are a good match with your company's values and culture. Sadly, this process often lacks rigour and subsequently, people find themselves in roles and in companies that are at odds with their expectations, skill sets or values.
Therefore a professional recruitment process can go a long way to helping build the culture you desire, based on loyalty, dedication and commitment.
But getting the right people is one thing: keeping them productive is another. Most of us start a new role with bags of enthusiasm and an eagerness to prove ourselves. But for some people, willingness can give way to complacency after a short while, and before long they begin to adopt what they see as the status quo. After all, we are driven at some basic level by a need to be accepted within our peer group and that means not standing out too much. This need for acceptance often translates into the adoption of habits that we see displayed around us, so if we see people taking time off work with no consequence to them (because the company fails to respond), it is an easy step to start doing the same thing. It becomes "the way things are done around here".
So another part of our approach is to help companies articulate its own vision of "the way things are around here", and make sure this message is consistently upheld both at the recruitment stage and throughout a person's employment. This involves a systematic programme of company procedures and communications, which emphasise the positive benefits of working in this environment and contributing to the company.
We also facilitate training in a non-threatening environment, so that managers can take responsibility for creating the conditions for their workforce. Managers need to accept that attendance is a controllable thing, and that their actions can make it go up or down. Instead of fighting over who is to blame and who to punish, companies need to accept with humility the faults of the past and be prepared to move on. So changing a general mind-set is vital to developing a new, more positive company culture, and attitudes towards attendance.
It's all about showing people you value them There are many, obvious, and less obvious ways to do this, which, once managers have learnt them, will transform daily relationships at work. We've identified a whole raft of measures which cost almost nothing to implement but have a dramatic effect on attendance levels, and thus the company bottom line.
Wake up Time!
It's now time for company bosses and managers to face this head on. The prize is too high to be ignored and courage may be required to stand up and admit that the situation is unacceptable. Wake up and smell the economy only the fittest will survive and there is little time for trying to protect reputations and the practices of the past.
There's one silver lining of the current recession it gives us more licence to do the brave thing and try something new. After all, doing things the old way hasn't really helped all that much, has it?
It's the companies who do act with courage, who are determined to be better than average, and who turn the positive principles of Attendance Management into action who will be best placed to survive this latest recession.
Wake Up an Smell the Economy!
By: Tim Lambert
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