Analysis Of Absenteeism In Ireland Management

Essay add: 28-10-2015, 19:08   /   Views: 223

It's been well known that excessive workplace absenteeism can be quite costly to organisations. Irish Business and Employers Confederation, the biggest employers association in Ireland, conducted a broad study of absenteeism in Irish workplace and found that the total cost of absenteeism in 2002 was astronomical - €1.58 billion (2004). Subsequently, other organisations have started to pay more attention to this rocketing issue. A survey done by Irish Small and Medium Enterprises Association claimed that the direct cost of absenteeism for small businesses is approximately €1.1 billion per year and that the indirect 'unseen' costs of absenteeism such as loss of productivity, administration costs, etc. could be even greater than the direct 'seen' costs, e.g. sick pay, replacement cost and so on (ISME, 2007). Another report done by the Small Firms Association in 2008 revealed that small businesses in Ireland lose about €793 million annually because of the absenteeism (SFA, 2008). Even though there is considerable variation among their findings, the bottom line is that absenteeism is expensive for companies and thus becomes a big problem for them. As it can significantly undermine their productivity, competitiveness and in a worst scenario even their existence, employers started to look for measures to address the issue and to reduce absenteeism in their plants. This report aims to look at the Irish workplace absenteeism in greater detail and how exactly it is managed by the companies. The Workplace Absence Survey (2004) done by IBEC will be used as a main resource of data for this report as comparing to other, ISME and SFA reports, it is quite comprehensive and representative given that 557 Irish private sector companies participated in it, covering almost 147,000 Irish employees.

To be able to analyse specific trends and nuances of absenteeism in Ireland, firstly the term 'absenteeism' needs to be defined and the common types of it need to be looked at. According to Oxford English Dictionary, generally the absenteeism is "frequent absences from work or school without good reason" (2006), while IBEC presents us with more comprehensive definition of absenteeism in the workplace. It is "unscheduled disruption of the work process due to days lost as a result of sickness or any other cause not excused through statutory entitlements or company approval" (IBEC, 2004). Statutory leave such as annual leave, public holidays, maternity leave, etc. and excused leave, such as bereavement, study or marriage leave are not considered to be absences in this context. A certain level of absenteeism is, of course, inevitable. Absences due to sickness, accidents, personal or family problems are understandable and quite unavoidable. These are classified as 'involuntary' absences. However, a large amount of absenteeism is avoidable or also called 'voluntary'. Number of employees "feel they are 'entitled' to some absenteeism" (Mathis & Jackson, 2008). This type of absences causes significant problems to employers, but at the same time it may indicate some deeper issues in the workplace. Poor industrial relations, bad working environment and low morale can significantly contribute to the level of absenteeism in an organisation. Along with sabotage and turnover, absenteeism is often one of the ways by which employees resist terms and conditions of work that they consider to be unfair. On the other hand often is claimed that the absenteeism is mainly a response to an excessive work strain and by being absent from time to time individuals try to recover and ease the negative outcomes of this strain. However, by the results of study done by Darr and Johns (2008), the belief that workplace strain and related illnesses are the main causes of absenteeism seems to be unsupported. It showed that less than 30% of the variance in absenteeism could be attributed to the workplace strain and less than 10% to related illnesses. At the same time it is recognised, that absenteeism doesn't seem to reduce feelings of strain and illness. That suggests that employers when trying to figure out the causes of absenteeism should not rely on work strain as a key cause. Workplace Absence Survey done by IBEC showed that the major cause of short-term absence is minor illness such as colds, flu, headache, etc., as around 50% of surveyed companies rated it as a number one cause of all absences. Other causes of short-term absence recognised by employers involved personal problems, alcohol-related problems, home responsibilities, recurring health problems. Recurring health problem, e.g. back problems, cancer, asthma, depression, was also the main cause of long-term absences, followed by accidents, personal problems, home responsibilities, back pain and work stress. These could be predominantly classified as involuntary absences over which the absent employees have no or limited control. Other absences, possibly the voluntary ones, generally not due to genuine ill health or due to the low morale or low job commitment were also recognised, representing only a small proportion of short-term absence causes. Although it is important to remember that it is mostly the employers' perception of the causes recorded and very often employees might by just 'pulling out the sickie' for various other reasons. Over 60% of all absenteeism can be attributed to "feigned illness and malingering", according to ISME report (2007). Employees might be using sick leave as a way to extend weekends or simply to take a day off work. According to IBEC, 40% of absence occurs around the weekend, being it Monday or Friday (2004). Whatever the real causes are, it is essential for employers to know at least to some extent why employees are absent from work.

When companies want to tackle the issue of excessive absenteeism and put efficient policies and procedures in place, it is essential that they understand the possible causes but also the dimension of the absence problem. That's where the importance of recording the absences comes into play. By observing and recording employees' absences, employers can get clearer idea about the patterns and trends of absenteeism in their companies. According to IBEC survey, 95% of companies record absence, either in formal or informal manner using manual, computerised or mechanical, clock-in systems (2004). Ideally, companies should focus not only on simple recording of the absences, but in their records they should also include information such as "whether the absence is short-term or long-term, certified or uncertified, male or female, full-time or part-time worker, the cause of absence and costs incurred" (Coughlan, 2004). Even though it may seem too detailed style of absence recording, if the company is seriously concerned about its levels of absenteeism, it is probably worth to engage in such methodical approach. Generally, supervisors or line managers are responsible for recording absence in companies. In 50% of companies taking part in IBEC survey, this was the case, while 32% of companies had special centralised function for recording the absence through administration or HR departments (2004). But mere collecting absence data cannot improve the absenteeism levels. Analysing the data recorded, thus quantifying the absence levels and subsequent feeding back the information to management are all parts of efficient absence management. Though only 55% of surveyed companies indicated they were analysing the absence rates and trends to such extent (IBEC, 2004).

To analyse or measure the absenteeism levels, various methods can be used. The most commonly used one is the calculation of absence rate. This is calculated as the time lost due to absence as a percentage of contracted working time in a defined period. The average absence rate among survey participating companies is 3.38%, which translates into 7.8 days lost per employee per year (IBEC, 2004). It is argued, however, that measures of absence frequency may provide a better indicator of short-term absence and may be thus more helpful in developing appropriate absence management strategies. Measures of absence frequency include the already mentioned average number of days lost per employee per year, the individual spells or frequency rate and the average duration of an absence spell. The average number of spells per employee or 'frequency' of absence is 2.5 per year and the average duration of each spell is 3.8 days according to IBEC survey (2004). Another widely used method is calculating the Bradford Score which means getting a score for each employee's absence in a year. It measures the attendance irregularity by combining frequency and duration measures of absence. The higher the score is the more disruption the employee's absence is causing to the company. Getting the appropriate specific measures is the starting point for founding an attendance/absenteeism procedure. Consequent reporting the results to the management enables them to use the data in attempt to manage absenteeism in the company. From the companies engaging in analysing the absence levels surveyed by IBEC, in the majority - 85%, the absence rates are fed back to the management (2004).

Some interesting characteristics related to absence rates in Ireland were identified by IBEC study (2004):

Absence rates increase with the size of the company being twice as high in companies with 250 employees or more than in companies employing less than 50 employees

The absence rates are higher for manual than for non-manual workers and for females than for men

The average absence rate is almost 2% higher in manufacturing - 4.36%, than in services - 2.54%

The question is how to interpret such differences? In terms of a size of the company having impact on its absenteeism levels, it could be argued that in large companies it is probably easier for an employee to be absent frequently as it might not get noticed by management as much as in smaller companies. Other significant differences can be recognised between manufacturing and service sectors, or manual work and non-manual work. Manufacturing or manual work itself can be a cause of higher absenteeism in such companies as it can be often very monotonous but at the same time physically demanding, possibly leading the employees to take some days off to relieve the pressure. Higher absenteeism amongst women could be attributed to the fact that women still tend to undertake more home and family responsibilities than men. According to the European Social Survey, round 2 compiled in 2005, average number of hours in Ireland weekly spend on housework by wife is 34.4 whereas by husband it is only 8.2 hours. (Voicu et al., 2006)

Given the survey results and the costs associated with excessive absenteeism, it is critically important that companies put proper procedures in place to resolve this problem. IBEC survey (2004) claims, that the main reason behind decrease in companies' absence levels is closer management of it and 80% of participating companies indicated they had procedures in place to deal with absence problems. Absence management is therefore something that should be integrated into companies' policies and management should be trained to deal with absenteeism and its consequences. Various absence management strategies are available to companies. They can adopt positive reinforcement approach which involves giving employee some type of recognition, benefits for meeting attendance standards or more disciplinary approach where absent employees receive a number of warnings depending on the company's procedure that could lead to suspension and subsequent dismissal. The combination of both approaches would be probably the best practice though.

According to IBEC survey (2004), among the measures for managing short-term absence used by Irish employers we can find methods like invoking disciplinary procedure, medical examination, flexible working arrangements, restricting sick pay scheme, providing counselling services or attendance bonuses. One of the widely used strategies is back to work interview. 70% of companies participating in IBEC survey declare that "where there is a concern about employee's level of short-term absence they interview the employee on return to work" (2004). These interviews, where manager speaks to absent person on his/her return to work are helpful when trying to identify the causes of absence. But they seem to be efficient in not only that, as ISME suggests - "back to work interviews shown to reduce malingering by as much as 55%" (2007). Much fewer companies would then engage in provision of counselling or advice service to their employees that might be experiencing some personal problems - just under half of the companies surveyed by IBEC stated they were offering this kind of support (2004). Attendance bonus or reward schemes representing the positive reinforcement tactic seem to exist just in a fifth of the companies surveyed by IBEC (2004). Strategies for managing long-term absences are also widely present in Irish workplace. The most common would be then maintaining regular contact with sick employee, followed by return to work interview, monitoring return to work process, creating flexible work options, temporary or permanent re-deployment and re-training for employees (IBEC, 2004).

Costs of excessive absenteeism accumulated in paying the sick pay to the absent person, paying the person replacing the absentee, possible costs due to the disruption to work plans, lower productivity or quality can be huge. But it goes beyond these direct financial costs and too much absenteeism can also result in things like unsatisfied customers and company's damaged reputation. Many companies in Ireland recognise this and as IBEC claims, many of them had already decreased their absence levels by implementing closer and more careful absence management. While vast majority of companies seem to have in place some system for recording absence, lot of the companies still don't record the causes of absences as well as don't calculate the costs, rates and trends of absenteeism in their organisation. If companies really want to reduce the absenteeism levels amongst its workforce, they certainly need to take more proactive approach. Careful records of absences, statistical analysis of absenteeism levels and subsequent formulation and implementation of absence policies are all vital to establish the extent of and factors influencing absenteeism and to deal with it effectively. Although too tight and strict management control can also become a problem that can potentially lead to employees being absent even more, simply to break away from too much control. Therefore whatever absence management approach the company adopts, it should be allowing some degree of flexibility and autonomy to employees while effectively promoting attendance.

Article name: Analysis Of Absenteeism In Ireland Management essay, research paper, dissertation