Using data to drive down absenteeism

Juha Huttunen explains why employers need to crunch some numbers to get to the heart of their sickness problems

Innocent absenteeism – where an employee is absent from work for a genuine cause isn’t usually a big issue. However, culpable absenteeism – where someone is absent from work without any genuine reason, is a problem and eats into company profits. And it isn’t just the direct costs of paying workers while they are off sick. When you add in all the indirect costs, including lost production and paying for staff cover, absenteeism can consume as much as 15 per cent of an organisation’s payroll, according to one study.

Things aren’t looking to get any better. In the UK, for example, a recent CIPD survey found that the average level of absence is now 6.6 days per employee, per year – compared to 6.3 days in 2016. Absence levels are even higher in the public sector (8.5 days per employee) and within larger organisations.

What does the data say?

Businesses cannot begin to reduce employee absence until they understand what’s causing it. This is a real challenge because traditional employee engagement surveys don’t shed much light on why some people are so unhappy at work that they decide to throw regular ‘sickies’.

However, it might now be possible to unravel the reasons for absenteeism and reduce it dramatically. This is what a major restaurant chain in Finland discovered while trying to tackle a completely different problem – low customer satisfaction – at one of its outlets. The company brought in HR consultant and academic Professor Marko Kesti to find out what the issues were in this restaurant and to suggest improvements.

Kesti, and a team from the firm he co-founded, has spent many years researching the factors that drive both employee engagement and financial performance. Using data from this research, they developed the Quality of Work Life (QWL) Index, a model now helping many companies analyse employee feedback and predict productivity and profitability. Kesti’s model is the only publicly released one that has been peer reviewed and accepted, and measures the right things – those that can predict profitability and productivity.

How does it work?

The online QWL survey, which is based on the Index, consists of just 15 questions. This makes it quick and easy to complete. It’s the data behind the QWL Index and the automatic analysis of employee feedback that makes this survey unique.  

Building on previous studies, research by Kesti and his team has shown that the quality of working life is influenced by three key factors: goals and creativity, social cohesion and identity and physical and emotional safety. The first two factors are known to have a positive effect on the quality of working life. Clear goals that unleash employees’ creativity are likely to promote excellent performance, while strong social cohesion – team spirit, in other words – generates positive energy, along with high productivity. A low level of physical and emotional safety, on the other hand, creates a hostile working environment full of dissatisfied employees who are unlikely to perform at their best and potentially be candidates for consistent absenteeism.

The QWL survey measures these three ‘quality of work life’ factors across five areas: leadership, line management, culture, skills and processes. An online tool then analyses the results, identifying strengths and development areas and – crucially – recommending actions to address any issues and increase productivity. 

What is the return on investment?

Using this approach, the restaurant chain was able to pinpoint the cause of the problems at its most poorly performing branch. Staff at this restaurant felt that nobody cared about them, so they in turn didn’t care about their work, and would call in sick at the slightest provocation. But by measuring employee engagement, making improvements, taking more measurements and making yet more improvements, the company achieved startling results. Not only did the underperforming restaurant climb from number 57 in the company’s customer satisfaction ranking to number eight, it also saw sick leave fall by 75 per cent. Not many HR projects deliver such massive payback.

If organisations can use data to understand why people are absent from work without any genuine reason, then they stand to recoup significant losses via payroll and also potentially improve employee engagement – a win-win situation.

Juha Huttunen is CEO of VibeCatch. Read more about VibeCatch in People Management’s run-down of the 10 hottest HR start-ups