Tuesday, 11 August 2015

Proactive Absence Management

Absence costs money! In 2013 the UK alone lost 131 million work days due to sickness (UK Office of National Statistics). CBI in 2013 estimated the cost of absence in the UK to be £14bl. Now most companies’ approach to absence is to cover it at overtime, or having extra staff on shift to cover for an absence. Some companies even ignore the problem in the hope that if they don't manage it, it will go away. This is the most expensive option because what you don't control has a habit of running wild

Having extra staff on shift is not only expensive but also reduces productivity and leaves shift managers continually firefighting. When we have reviewed company’s productivity against the number on shift we have found that if there are too many people for the work then less work gets done. 
"Too many cooks spoil the broth!"
This is because no manager likes to see a worker standing around doing nothing. Plus no one likes to stand around doing nothing, it’s demoralizing, tiring and everyone who is working will hate you for it. So the manager will reorganize the work to suit the number of people there. This takes time and is not as efficient as if you always have the correct number available. 
Furthermore most companies never estimate the number who will be absent off shift correctly. They only use averages which are misleading, leaving most companies correctly staffed on only about one third of shifts (by using averages). On about two thirds of shifts they are either wasting money or losing money. So we created an approach which ensures that an operation always has the correct number of staff and only the correct number of staff on shift every shift.
Proactive Absence Management is about tackling absence head on. Most companies have no absence strategy, and those that do invariably use discipline and overtime to minimize the effect. This is both expensive and negative. Therefore our approach is to first of all estimate absence. So we look at historical data. The simplest statistic is Absence rate. Then using Dr Angela Moore’s statistical model (http://www.amazon.com/dp/B00S583GA0/) we can predict not only how much absence will occur but predict how many will be off each shift. 
E.g. if you have a 2.5% Absence Rate and 10 people using a shift pattern which scheduled them to work on 260 days/shifts per year you would expect to see; On 202 days you would expect no one to be absent. On 52 days per year you would expect one person to be absent and on six days per year you would expect two people to be off. Hence you can plan your absence procedures on a maximum of two people being off because it is highly unlikely that three people would be absent on the same day. So we set up the shift pattern to give two people on-call or two cover shifts each day to cover for absence. 
Ideally we would suggest using a holidays included shift pattern to maximize efficiency and minimize disruption to the operation. Then suggest that Banked Hours is used to provide the absence cover at basic rate not overtime rates. Obviously if you can cover the absence at basic rate this is cheaper than overtime, so there is a year on year significant cost saving. 
The result of this is that absence is covered in house at basic rate to minimize cost and ensure that the best people are there to maximize productivity. The procedures are created up front so that shift managers are not left firefighting day in day out. The shift workers never have to worry that they will be under or over staffed on shift, and this minimizes stress. The shift workers also have a shift pattern that gives them a good work/life balance. Oh and as a bonus if the Banked Hours system is operated correctly some companies can see a significant fall in their absence rate.
If you would like us to help you be proactive towards absence please contact us via email: alec@oranalysts.com or call for more information 0044 (0) 1636 816466

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