A Commentary by Wendy Ferguson – BHRLR, CPHR – Ferguson HR Consulting
As an oilpatch employer, when was the last time you dissected absenteeism? I don’t mean simply knowing the number of “sick days” per employee, or just the overall absenteeism rate in your organization. I mean have you really analyzed why and how the rate is what it is? Do you know what it’s costing your company?
If you said no to these questions, you wouldn’t be alone. It is reported that only 15% of Canadian organizations track the direct cost of absenteeism even though 46% track the rate of absenteeism. As an employer, you will benefit from engaging in this practice in order to understand what it is costing you and how to reduce your absenteeism rate, thus increasing productivity while supporting a healthy workforce.
The Facts and Consequences
What does absenteeism mean? For the purposes of this article, absenteeism refers to absences that are avoidable, habitual or unscheduled. These absences tend to disrupt organizational outputs and are incredibly costly to companies. Often we think of these absences as “sick days”, however, as you will see they are more often for reasons unrelated to physical illness. We do not consider scheduled time off such as vacation as absenteeism.
In 2011 Statistics Canada reported that the average absenteeism rate across all regions, sectors and job types is 9.3 days per year. To put this into perspective, that equals 105 million missed full-time work days. In 2011, Alberta held the lowest absenteeism rate at 8 days per year. I would suspect that given the recent years of economic decline that it has increased closer to the national average.
I suggest you do a quick staff count and multiply that by 8 days to reach your total missed work days. The average Alberta employee earns $239.68 per day (according to the 2015 Alberta Wage and Salary Survey), but you will have your own organizational average, or better yet…use your actual employee salary data to calculate the accurate direct cost. Your direct cost is the salary cost associated with workdays lost. Indirect costs are costs such as replacement expenses, low morale, reduction in productivity, missed project deadlines and reduced customer satisfaction and continuity, which is more difficult to compute.
Who misses the most work? According to Statistics Canada, the highest absenteeism rates are reported in unionized environments as well as the public sector. Second to that are employees who have children under the age of 5. The lowest absenteeism rates are concentrated in the private sector and those employees who have been working in a job less than 12 months. I will include a link at the bottom of this article for further interesting absentee statistics.
Why Are Your Staff Absent?
Sure, many of your employees have legitimately had influenza or strep throat, but according to a Morneau Shepell survey, 52% of employees surveyed in Canada say that the last time they missed work it was not because of physical illness. Some reasons include: personal commitments, family obligations or issues, stress (work-related or not), mental illness, lack of motivation, toxic managerial behaviour, workplace conflict, seeking other employment, etc. According to the same survey, more than 28% of workers between the age of 15 and 75 report high work-related stress. However, the drivers of absenteeism are not that simple. There are many contributors, including organizational influences, personal characteristics and societal influences. As an organization we cannot eradicate absenteeism altogether, but we can certainly formulate a plan in the right direction.
Mental Health – Critical Issue
Today we cannot ignore the issues surrounding mental health and no workplace is immune. Approximately 30% of short-term and long-term disability claims in Canada are attributed to mental health issues. In 2011, the Mental Health Commission of Canada indicated that issues surrounding mental health are costing Canadian employers $6 billion dollars per year in lost productivity. The World Health Organization predicts that “by 2020, depression will be the second leading cause of world disability and by 2030 it is expected to be the largest contributor to disease burden”. They state that 10% of the global population suffers from major depression and that women are 2 to 3 times more likely to experience depression. As employers, we need to pay attention to these statistics.
We cannot ignore the world economic crisis as a major contributing factor to the general decline of mental health. Since 2008, Alberta has been amidst a recession, except for a couple good years between then and now. People are experiencing psychological stress (that may in time lead to physical illness) influenced by socioeconomic degradation due to the loss of jobs and limitations of income. The World Health Organization states “unemployment, impoverishment and family disruptions are likely to produce or precipitate a variety of mental health problems”.
Stressors contributing to mental health problems include: lack of work/life balance, toxic or unfair work environment, economic and job insecurity and low job control. Then of course, those who have already lost their jobs or are unable to obtain a job often have further stressors including: lack of health insurance coverage, limited or no family income, poverty as previously mentioned.
How Can Your Organization Respond?
Analyze the Data
As an employer, you cannot afford to avoid absenteeism and the loss of productivity in your company. As mentioned at the beginning of the article, you will need to start with assessing where you are at in terms of absenteeism. Determine your overall rate and what it is costing you. Perhaps you will find that right now absenteeism is not affecting business at all, but it could in the future so it’s a good idea to get into the habit of addressing absenteeism now.
Understand the Circumstances
Understanding the reasons for absenteeism is key. For example, a manager with perpetual conflict issues may be driving employees to take more days off. So how do you go about gaining an understanding and providing adequate support? Pay attention, listen to ongoing feedback from employees and managers, notice patterns and try to identify root causes (i.e. an elevated absenteeism rate in a certain department, or one staff member takes excessive days off without explanation);
There are many ways an organization can work to reduce absenteeism and offer support to its employees:
- HR may be able to assist you with addressing issues surrounding absences, but it will generally be the day-to-day front-line managers that will need to have impactful discussions with their direct reports regarding absences or struggles employees may be experiencing. Encourage your managers to have productive and ongoing dialogue with their staff;
- Set up a protocol where staff must call their manager regarding an absence (not text or email) and keep lines of communication open;
- Require a physician’s note if an employee is absent with an illness. However, when requesting relevant confidential medical information, the employer may request only information that is relevant to the employee’s job duties. The employer does not have an unconditional right to full disclosure of the employee’s medical situation. To decide what type of information is reasonable to request, refer to the Alberta Human Rights Commission;
- Design programs and policies to reduce absenteeism. Some ideas include: wellness initiatives, an employee assistance program (EAP) that provides resources and counselling for staff who experience life issues (because we all experience them), offer reasonable flexibility with work design or hours when possible, offer work/life balance and mean it, promote health issue awareness.
Going forward, you will be able to compare your annual absenteeism direct and indirect costs versus how much you are investing on some of the initiatives above and assess what is working for your organization.
The responsibility to reduce absenteeism falls on everyone in the workplace – employees are responsible for their own health and job performance, but also employers and managers are responsible to offer a healthy workplace. Absenteeism is more than an HR issue. It costs our Canadian economy billions of dollars each year. Unless companies start addressing absenteeism, the cost will likely surge for employers and our country. By taking a proactive approach to review absence patterns and identify the root causes, organizations can position themselves to design and implement programs and policies to reduce absenteeism.
Side Note: Since I began to write for Energynow.ca, I am touched by the outpour from people who have responded to my articles and who have, in recent months, become desperate and so very frustrated with the job market. I have seen and heard first-hand the personal impact of our economic crisis in Alberta. I expect the companies who engage in the initiatives and programs such as the ones above will be the companies of choice going forward. Given what I have seen over the past few years, I urge all employers to be empathetic ones. The companies who have been impacted by the downturn (or continue to be) – when you begin to hire again you may be onboarding casualties of the recent 3-year downturn in Alberta. These candidates are often highly-qualified, hard-working employees who may need to recover from the recession. They may not have worked for more than two years and that means they may benefit greatly from certain resources (such as EAPs or wellness initiatives) to support their optimum performance. In addition, I plead that any companies continuing to conduct layoffs offer outplacement services to those affected.
For further information on absenteeism related information, please visit the following links:
Canadian Absenteeism Statistics, 2011 Statistics Canada Work Absence Rates and Data at http://www.statcan.gc.ca/pub/71-211-x/71-211-x2012000-eng.htm
Absenteeism Trends in Canadian Organizations, The Conference Board of Canada
Depression: A Global Crisis – World Federation for Mental Health
About Wendy Ferguson
Wendy Ferguson is an Alberta based Human Resources Generalist and Consultant with over 15 years of combined experience in the areas of HR, Business Administrative Management and Marketing.
She has worked within a broad range of industries, including: oil & gas, architecture, law, information technology, engineering, accounting and business consulting firms. She works with companies on both a full time and part time consulting basis to help them address their HR management, recruitment and policy needs.
She is also a Chartered Professional in Human Resources (CPHR). CPHRs are uniquely qualified to help you achieve your business goals. With proven expertise across nine key business metrics, a CPHR has the knowledge and the experience to address the factors that underpin the degree of your immediate and long term success.
For your HR requirements contact Wendy at email@example.com
Senior Management HR Advisory
Alberta Employment Standards