Employer tracking key to reducing absenteeism

Training managers, differentiating types of leave and communication also necessary

Absenteeism in Canada has reached a 21-year high and is not being tracked by most employers, according to a study by the Conference Board of Canada. In a survey of 255 employers across the country, only 40 per cent said they track absenteeism. These organizations reported losing an average of 6.6 days per full time equivalent position in sick days, short-term disability (STD) and long-term disability (LTD) in 2008.

“Absenteeism rates are on the rise,” said Karla Thorpe, associate director of compensation and industrial relations at the Conference Board of Canada. “They’re at their highest level since 1989 when we started tracking that metric.”

Absenteeism is costly for employers, but only 15 per cent of respondents tracked its cost. Among those 15 per cent, the direct cost averaged 2.6 per cent of payroll, according to the survey. While the implications for single employers are large, economists estimated that absenteeism can cost the Canadian economy $7.4 billion in lost productivity per year, said Thorpe.

From the beginning, employers should have a proper system in place to measure absences, said Sandra Ventin, consultant at Pal Benefits in Toronto. Organizations should use an objective process and not be reliant upon the employee’s or manager’s memory, she said.

“You can’t manage what you can’t measure,” said Thorpe. “It’s important for organizations to measure and compare how their rates stack up to others in the industry.”

There are a variety of options available for tracking absenteeism in an organization. Whether it be specific payroll software with a tracking tool, an excel spreadsheet or through a third party such as an insurance company, the most important thing is payroll has a system in place to differentiate from the different days provided, said Camille Coutu, consultant at Buck Consultants in Toronto.

“Sick days, personal days, STD, workers’ compensation and any other types of leave all need to be recorded because you need that data to manage the programs. It doesn’t matter how you do it, it just matters that it’s there,” she said.

LTD tends to be better tracked than other forms of absenteeism. Nearly three-quarters of organizations surveyed record LTD information including number of employees, length and cost. Employers see these claims as a greater consequence, although the costs associated with sick leave and STD may “far exceed” those of LTD, according to the report.

Less than three per cent of full-time employees were on LTD compared to nine per cent on STD of the employers surveyed.

The employer and the employee should work together to track absences, said Coutu. A payroll manager should review the types of leaves, the attendance policy and the proper procedures for requesting time off with the new hires.

Front line managers need to be properly trained on their responsibility to report their employees’ time off to HR and make sure it’s accurate, said Coutu.

“What we find often happens is that payroll is ultimately responsible for tracking but a lot of the absenteeism is managed on the front line so HR can’t track it properly if the managers aren’t tracking it well,” she said.

Failure to properly track absenteeism can lead to lost money, fraud and possibly costly litigation, said Coutu. Payroll should be looking for trends in the absences to identify issues that need to be resolved.

“It could be possible that over that past year a company’s absenteeism increased by 25 per cent but if it’s not being tracked and it can’t be quantified, then the company won’t be able to fix the problem,” Coutu said.

Communication campaigns are a great way to reduce absenteeism, said Coutu. Use this to explain to employees the impact on the company when they take a sick day, and reinforce their responsibility to report their absences properly.

Many employees don’t realize when they don’t report their time correctly, both them and the company suffer, said Georgia Kollias, owner of Montreal-based firm GKC Payroll Services and HR Consultants.

“If I spend more because I have to pay you for overtime that you didn’t really work, I have less to offer you in terms of benefits, pensions and activities,” she said. “There’s only one pie.”


4 common mistakes employers make when it comes to tracking absences

•Missing bits of information: Not including the dates or causes of the absences.

Too broad categories: Grouping all sick days under one title such as medical without specifying the exact reason for illness.

Not following up: It’s easy for a manager to tell payroll an employee will be out sick for the next three days when, in reality, they are off for five days.

Not having checks and balances: Failing to ensure work is vetted for accuracy.

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