Tough love

Prepare for a surprise. Recent surveys on absence management worry more about presenteeism than sickies. According to risk insurers Canada Life, 93% of employees now come to work despite being ill. There is even evidence that people use their own holiday to recover to avoid spoiling their sickness record. It's driven by fear of job losses, but it may still be affording some pleasure to manufacturers whose output has been bedevilled by no-shows for years. But it's a different story when half your labour force goes down with flu because one sufferer didn't have the sense to stay in bed. Presenteeism is no more desirable than its opposite number, absenteeism. On the up side, casual absenteeism is also falling. CIPD's latest figures, although they can't distinguish between sickies and genuine illness, show a drop from 7.7 days to 6.8 per employee per year. Of course it's welcome but no euphoria, please. Estimates vary widely, but that's still up to £30bn lost economic output. CIPD puts it at a median of £600 per employee. Or – possibly a clearer measure – more than a week's extra and undeserved holiday a year for those who fake it, while you and I are left making up the shortfall. Simon Macpherson, operations director of workforce management specialist Kronos, says that even though unplanned absence is less prevalent nowadays, it is still essential to manage it. "In this, as in so much else in industry, you can't manage what you can't measure. Industrial psychologists believe almost any company has 20% superstars, 60% average and then another 20% that need an extra bit of management. If you aren't seen to address that bottom 20% when they are pulling sickies after a bank holiday, good workers will progressively disengage and it will have an effect on your whole business. A lot of people think putting in a workforce management system is Big Brother but in our experience it is more popular with employees than with management. They don't like people getting away with it." Stephen Robinson, specialist in employment law at Laytons Solicitors, says: "While every business is different, the reasons trotted out by employees who take the odd day off never change: stress, back pain, colds and flu, domestic issues." He has seen employers try all manner of approaches to tackle the issue. Like Macpherson, he values formal return-to-work interviews which, he adds, are "very useful in assessing the reasons for absence and ensuring the business's obligations to spot a potential issue such as a disability are not missed". Other reactive measures include stress counselling, changes to work patterns and capping sick pay. He points out an anomaly, however: the public sector has invested heavily in processes like these, yet has the highest absence rates of all. "Of course, this may not be strictly down to how the organisation deals with absence, but more to do with the employees themselves, business culture and a generous sick pay entitlement," he reflects. In any company in any sector, he believes there will always be a fluctuating mix of malingerers and the genuinely ill. To him, forcing them to explain why they have been off work doesn't really tackle the nub of the matter. Instead, companies that have successfully reduced short-term absences have focused on making employees want to come to work. Bonus schemes for perfect attendance are common techniques, but he also sees more unusual ones like permitted 'duvet days' which don't count towards holiday. That one may work for large banks, but I can't see it going down too well in a steelworks. But there's nothing wrong with his notion of improving both the working and social environment so people positively want to be there. "Only when businesses really take time out to understand what makes their people tick will we see a shift in culture," Robinson adds. Positive impact We hear a lot about culture shift these days; it's an easy thing to say and such a difficult thing to achieve, especially when it involves overturning the habits and attitudes of years. Yet that is exactly what Entek International achieved. This Newcastle-upon-Tyne manufacturer of battery separators was not only Best Process Plant in the 2012 Best Factory Awards, it was also joint winner of the People Management prize. Quite an achievement when you consider the low point of its fortunes was an absence figure that regularly hit – wait for it – 35%. Today, it is well below both the national and area average; HR manager Karen Brown says she never finds people ringing in to miss a shift on a Friday night for no good reason. How did Entek do it? By a process that – to steal a cliché – can best be described as tough love. It's a complicated story of a plant that had gone through several changes of ownership. A stunning turnaround in production capability started in 2004 when Entek assumed full ownership and a new management team, led by MD Martin Lee, came on board. It invested heavily in new equipment and processes and, even more importantly, in lean techniques and training. But the slow climb out of a pit of adversarial attitudes, deep-seated disciplinary issues and constant absences had actually started some time before. Lee's arrival, however, gave the steadfast support needed to make each painful change stick. Karen Brown, who has been with the company since it started, says problems really took root during the expansion of the early 90s. "Rapid recruitment meant people weren't handled properly when they didn't perform well. One of the senior managers couldn't cope with confrontation and, at the first sign of opposition from the shop steward or the shopfloor, would rescind any actions taken to impose better discipline. As a result, the entire management team lost credibility. People saw there were no consequences [to infringements] so it didn't take much to start taking Friday or Saturday night off when they were supposed to be working. It was great training for me!" Newly promoted to HR, she became part of a small team trying to put in some proper procedures. The most important one was the return-to-work (RTW) interview. "Over recent years, we have developed it into a much more sophisticated process," Brown recalls. "But then it was just a 'why we were off' piece of paper and a conversation with their manager. Initially, some simply didn't care – they expected any disciplinary would be dropped. In the past it would have been, but not now." Accountability had arrived. Together with more stringent risk assessment procedures, this simple change brought absence down to around 10%. But there were still absences during the unpopular weekend shifts – a serious problem in a continuous manufacturing process. Even worse, the move to encourage new behaviours was hamstrung by archaic terms and conditions that gave, for example, a working pattern of two weeks out of four and 400 hours of holiday a year. The 2004 management team was not afraid to tackle it even though – when offers of payments in lieu were rejected – it had to fight for new contracts in court. Brown still believes a vocal minority prevented a sensible settlement when the majority understood the business case and wanted the plant to succeed. It was painful, but it was also a watershed. "Once it was clear we had the backing to turn things around, we finally began to win the supervisors' confidence. They had become so used to being knocked back that it was difficult for them to believe this time it would be different." Today, Entek has a clear and fair framework of expected behaviours and disciplinary procedures that apply across the plant. Everyone clocks in; there is no 'us and them'. In-depth RTW interviews follow all absences, initially with a supervisor and either a lead hand or HR assistant. Supervisors have been trained in conducting them and the right data is collected to support their conversation. This clarity has had huge impact. People were often surprised to see just how often they had really been absent. Strong stance When there are problems, Brown offers genuine support; her open-door policy is real and she knows every one of the 130 employees personally. Entek gives sick pay from day one and it is rarely abused. On the other hand, people know if they try to buck the system, they will be opposed even if it means going to court. Brown will always go the distance with unfair dismissal cases. "It is very important. If you do your job correctly from the start, keep the records you should keep and don't cut corners, take advice (because the law changes so frequently), talk to the person right the way through and you still end up having to dismiss them, you should fight any unfair dismissal case. You are in the right and it sends a very bad message to the rest of the workforce if you don't." But within that framework there is real recognition and appreciation of the individual. "You can spend millions on machines," reflects Brown, "but if your people aren't treated well, they won't work well for you and your business won't thrive." And there is also flexibility – rules can be stretched if there is a good reason and the employee understands that it is not happening through weakness. Take the powerful incentive of Entek's Attendance Tree. People need a 100% record to stay in the tree, excluding bereavement and holidays. Staying in gives £100 in vouchers, a chance to win one of five £500 holidays, and counts towards a third of performance bonuses worth £2,000 a year. If people are even a minute late, they fall out. In 2012, 100% of the workforce was still in the tree by May. "It has really changed attitudes," says Brown. For the first few years, because of the previous problems, Entek ran this by the book. "Now I am trying to get back to a position of mutual trust, occasionally allowing people to make up missed time." For example, when the snow made people two hours late, they could make it up by digging out the site. Similarly, people can have planned time off for personal reasons if they work it off at an agreed time. "It helps prevent the attitude that 'I am out of the tree anyway so what does it matter'," she explains. No one is ever just a name in Entek. Brown doesn't believe in cascaded messages; she believes in telling it face to face, even if it's not good news. "To drive a business and to keep people onside, you've got to invest in them, work with them and listen to them." Entek is clearly no soft touch, but there is a vein of fairness running through all its dealings. In a particularly tough year, they couldn't give a pay rise. Everybody pulled together and things improved so it was not just paid but backdated. Last year, during a quiet period, they did more 5S, maintenance and training rather than lay people off. So what advice would Brown give to businesses facing a similar uphill climb? "Don't back away when things get tough. But you can't expect people on the shopfloor to change if managers aren't on board. They have to be able to work with people fairly, so make sure they are trained to listen as well as act. We hosted a lot of factory visits recently. The change was stunning; there was so much enthusiasm in people wanting to show what they were doing." Top tips for top attendance 1 Have a clear absence policy that shows what is acceptable and expected, but that also balances employee and employer needs. Monitor and enforce it fairly across the business. 2 Capture absence and tell managers immediately. Always conduct return-to-work interviews on the first day back. 3 Flexible scheduling – where employees can choose or swap shifts – reduces absenteeism. 4 Allow staff to book unpaid leave or buy additional holidays. Planned absence is far easier to manage than unplanned. 5 Incentives can be a powerful motivator for excellent attendance, so consider establishing such a scheme. 6 Be realistic: sometimes people really do need to take unplanned time out. Allowing a certain level improves morale and gets better performances. 7 Keep control of absence – use software tools to monitor levels and trends, and make absence management part of your long-term business plan.