Absence management is a winning strategy for employers and employees alike Sue Copeman reviews a recent conference on the subject.

If a vital piece of plant or machinery stops working, businesses are quick to take action and get it going again as soon as possible. Yet somehow, when it comes to employees - often referred to as an organisation's greatest asset - most UK companies do not take the same approach. Instead they are apparently content to let sick employees get on with it.

This is an attitude that is costing British business a huge amount in financial terms, not to mention industrial relations, and it is hard to see why it still persists. Not only have a number of surveys in recent years spelt out the cost of poor absence management in no uncertain terms, but case studies show that good absence management is a strategy that has no downside.

In order to highlight the benefits of rehabilitation, AIRMIC, the UK association of risk managers, is joining up with a number of organisations to hold a series of regional conferences on the subject. Speaking at the first of these, David Ireland, group insurance director at Vinci plc and chair of the AIRMIC rehabilitation group, told delegates that UK employers could save £4bn a year by taking better care of sick and injured employees.

Quoting Association of British Insurers (ABI) statistics, he stressed that employers are wasting money by ignoring employee wellbeing issues.

As well as hard benefits which make a direct impact on the bottom line, there are also intangible benefits, such as creating greater employee motivation and staff loyalty, he added. He also stressed that it was essential to take an holistic approach, looking not just at accidents but at all unplanned absences. Lack of size need not be a barrier, as rehabilitation need not be expensive nor require huge investment.

David Rossner, director, CBI Wales and South West, said that the CBI/AXA absence and labour turnover survey of 2005 showed that the average absence rate in 2004 was 6.8 days per employee, representing 168m working days lost, with a total cost to employers of £12.2bn. Key elements of effective absence management are to identify causes of absence, tackle long and and short-term absence in different ways, and get senior managers to take primary responsibility.

Dr Les Smith, group medical adviser, FirstAssist, discussed the ways that an organisation's culture can directly affect the productivity of its workforce and the true cost of poor wellbeing at work. He said the challenge was to move away from an illness management compliance model to one in which we manage and improve employee health and wellbeing to achieve optimal productivity and 'long term healthy' employees. Putting wellbeing into practice involves:

- defining wellbeing goals
- assessing the causes of absence
- wellbeing/stress audit
- aggregate absence, insurance and audit data
- trends and hotspots
- using a proactive and independent partner and all available resources
- engaging employees, unions and suppliers
- creating a positive health strategy, not an illness strategy
- aligning goals and measures.

John McManus, HR consultant, Hugh James, looked at some of the practical issues of managing long-term absence. He stressed that it was essential to understand the causes, keep in regular touch with the employee concerned, and, if necessary, plan rehabilitation adjustments to facilitate the return to work. Employers should be prepared to be innovative in providing work to long term absentees - for example by considering whether they can work from home or carry out a particular task - as a means of helping them get back to speed when they are fully fit. Return to work interviews are critical to helping employees' integration back into work.

Alison Love, partner, Hugh James, gave some examples where employers had got it wrong when managing long-term absence, for instance in failing to take account of the implications of the Disability Discrimination Act.

She concluded that a number of problems arose because of poor communication, lack of flexibility or sensitivity and failure to seek and follow expert advice.

It is not just accidents or conventional sickness that can cause absence.

Dr Dave Minton, GP and stress management consultant, Training Medical Personnel Services, warned that stress is extremely common - and increasing.

He said that organisational culture has a role to play here. "If the organisational culture is that stress is for wimps, employees feel that they cannot get help."

Minton emphasised that it is important to to identify when people are starting to come under pressure in order to take action before the condition worsens. In addition to recognising stress, he suggested identifying the source, listing pressures, making changes, finding the right help and having a rehabilitation plan, as important methods for dealing with stress.

- Sue Copeman is editor, StrategicRISK

'Looking after Your Workforce' was a joint conference held by AIRMIC, the CBI and Hugh James.


The ABI report, Cost and benefits of return to work and vocational rehabilitation in the UK, states: 'Numerous studies consistently report that return to work and vocational rehabilitation can have benefits for businesses. Indeed, some studies reported that these interventions can reduce absence by at least half, halve litigation claims and reduce by 33% the number of claims extending into long-term disability, so potentially reducing insurance cost by 40%.

'One UK case study revealed that the benefit to cost ratio can be as much as 12:1 (ie for every £1 spent the company made savings of £12).'