Human Capital and Absence Management

Are your employees engaged and actively working to the best of their ability? It follows logically that if your answer is “yes”, your company is getting adequate return on its investment. But absence affects all organisations - from small enterprises to global corporations.

It’s easy to see the link between absence, disengagement, loss of productivity and cost to your organisation. This makes absence management the quintessential Human Capital Management issue.

Short-term absence

Bouts of persistent short-term absence are often a clear sign of disengagement, especially where there are no clinical reasons or underlying conditions to consider.

Studies by the CIPD show that “employee absence is a significant cost to 90% of businesses” in the UK. Their latest research on employee absence reveals “on average sickness absence costs employers £598 per employee every year” and “employee absence costs employers eight working days for every member of staff per year”, which equates to 3.5% of working time. We believe this may even underestimate the problem as many organisations fail to accurately monitor absence and are therefore under-reporting. In addition to this, the financial dimension rarely takes into account anything other than direct salary costs and it’s rare to see a cost less than £1,000 per employee per annum when all the other aspects of productivity are taken into consideration.

While it is clear that responsible employers don’t want to encourage their employees into the office when they are sick (in fact having sick people in the office can be counter-productive) it is also equally clear that organisations have a vested and financial interest in keeping their employees healthy and attending work.

Our role

As a provider of Employee Assistance (EAP’s) and Health & Wellness programmes, Ceridian is well placed to support clients in proactive absence management, which can directly add value to a client’s organisation if absence rates are reduced.  As well as the qualitative increases in areas such as customer service, productivity and employee morale, the bottom line impact cannot be underestimated. Ceridian also has the ability to help organisations measure and track absence records, gauging the true size and scale of the absence levels within our clients’ businesses.

One of the most important aspects of effective absence management is accurate measurement and analysis. After all, how can you manage something unless you are measuring it? Businesses have to be able to tell what the nature of the issue is that they are faced with – for example, are people taking short-term absence, or is there an issue with long-term sickness? Are employees noting stress or a bad back as the main cause of absence? This is the data that will help dictate the best interventions to counter the issues effectively, or even whether there is an issue there to tackled at all.

Again, according to CIPD statistics, despite the importance of collecting information about absence levels, especially when considering the scale of the impact in terms of cost and productivity, less than half of businesses in the UK claim to be capturing this data and doing anything with it. A significant opportunity exists for UK employers to lead the way in best practice absence management and Ceridian is perfectly placed to be at the forefront of this evolving, exciting market and to add real value to our clients’ organisations.

**Source information taken from www.cipd.co.uk

More human capital resources

• Find out how a tailored payroll and reward strategy can unlock the human capital potential in your organisation.
• Find out about the human capital challenge.
• Find out about the importance of human capital management.