errs25.doc

Published in March 2004 by the Department of Trade and Industry.

URN 04/553
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Foreword

The Department of Trade and Industry's aim is to realise prosperity for all. We

want a dynamic labour market that provides full employment, flexibility and

choice. We want to create workplaces of high productivity and skill, where

people can flourish and maintain a healthy work-life balance.

The Department has an ongoing research programme on employment relations

and labour market issues, managed by the Employment Market Analysis and

Research branch (EMAR). Details of our research programme appear regularly in

the ONS journal Labour Market Trends, and can also be found on our website:

http:/www.dti.gov.uk/er/emar

DTI social researchers, economists, statisticians and policy advisors devise

research projects to be conducted in-house or on our behalf by external

researchers, chosen through competitive tender. Projects typically look at

individual and collective employment rights, identify good practice, evaluate the

impact of particular policies or regulations, or examine labour market trends and

issues. We also regularly conduct large-scale UK social surveys, such as the

Workplace Employment Relations Survey (WERS).

We publicly disseminate results of this research through the DTI Employment
Relations Research series and Occasional Paper series. All reports are available

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The views expressed in these publications do not necessarily reflect those of the

Department or the Government. We publish them as a contribution towards

open debate about how best we can achieve our objectives.

Grant Fitzner

Director, Employment Market Analysis and Research

Contents

Executive Summary

Introduction

Managing absence: the context

Managing absence: the policy context

Aims of the study

Absence management: literature review

Methods

Business and employment context

Business strategy: markets and competitors

Links to human resource (HR) strategy

Vulnerability to absence

The nature and extent of absence

Introduction

Types of absence

Policies

Extent of and trends in absence

Measurement and monitoring

Key points

Managing absence

Introduction

Unplanned absence

Planned absence

The cumulative impact

Line managers

Key points

Costs and benefits

Introduction

The costs of absence

The benefits of absence

Key points

Conclusions

How worried are employers about absence?

Which kinds of absence cause most problems?

How effectively do employers manage absence?

What differentiates those who cope well from those who do not?

How would they cope if there was a high take-up of the new leave entitlements? 55

Appendix A: Case studies

Financial Services case study

Food Retailer case study

Law Firm case study

Manufacturing Company case study

Merchant Bank case study

NHS Trust case study

School case study

107

Small Business case study

114

Small Engineering Company case study

119

IT Technology R&D case study

125

Telecomms Company cse study

132

Appendix B: Bibliography

139

Appendix C: Data Tools

143

HR Managers Topic Guide

144

Managers Topic Guide

156

Employees Topic Guide

167

Different types of absence

174

‘Map’ of topics for exploration with HR Managers

176

Appendix D: Absence Costing Tools

178

Executive summary

In the main managing absences was not a major issue of concern for employers.

Indeed, in response to recruitment difficulties there were instances of
organisations introducing initiatives aimed at employees to improve their work-
life balance. Though management do not systemically collect information to

monitor absence, sickness absence was seen to be on the decline, while non-
sickness absence was on the increase (though from a low base). Generally,
unplanned absences caused more problems than planned absences.

Introduction

Background

Employee absence from work has received greater attention in recent years. This is

due in part to increased emphasis on employers’ ‘duty of care’ towards their

employees, concerns to maximise labour utilisation in competitive marketplaces and the

minimisation of the costs and disruption caused by absence from work.

In the UK there are several sources of data on absence. The Labour Force Survey (LFS)

publishes data on the percentage of employees absent from work due to illness or

injury on at least one day in a reference week. Data from the winter 2000/2001 LFS

show this rate to be 3.8 per cent of working days lost. Other data are derived from

surveys of employers. For example, the CBI conducts an annual survey of sickness

absence patterns. Its 2001 survey shows that an average of 7.8 days (3.4 per cent)
were lost per employee in 2000 (a similar figure to 1999). The 1998 Workplace

Employee Relations Survey (WERS98) collected data from establishments which

suggest that average daily absence rates for those with more than 25 employees stood

at 4.1 per cent.

Of course employee illness or injury are not the only causes of absence. Employees in

the UK now have a variety of statutory rights to time off work. More recently acquired

rights reflect both a shift in emphasis in EU and UK policy and a changing pattern of

demand from employees themselves, and have been introduced to facilitate employees

balance the demands of their work and their domestic responsibilities better. Employees

can now legitimately be absent from work for a wide range of reasons, including:

annual leave, maternity leave and ante-natal care, adoption leave, domestic

emergencies, paternity leave, parental leave, career breaks, civic responsibilities and

religious holidays. Policy makers are concerned to ensure that these provisions do not

place unnecessary or disproportionate burdens on employers.

vii

Aims of the study

The main aims of the study were:

To investigate how employers manage and cope with the consequences of different

types of absence

To provide real life examples of how employers manage absence

To investigate the costs and benefits, including any administrative burden

associated with implementing the legislation. To establish the context in which

employers provide for the recording, monitoring and developing of active absence

management practices.

Research approach

A case study approach was adopted. Since employers’ approaches to managing

absence might be expected to vary according to their labour use requirements case

studies were selected to provide examples where managing absence might be expected

to be an issue. Therefore, the sample of organisations included the following features:

A high proportion of female employees

Low skill substitution owing to size

Low skill substitution owing to skill specialisation

Low skill substitution due to high dependence on client relationships.

Interviews were conducted with human resource (HR) managers, line managers and, in

some cases, employees. In addition, examples of written policies were collected and

examined to provide a basis for documentary analysis.

Business and employment context

The fieldwork was conducted during 2001/2, a period of economic growth, low

unemployment, widely reported skill shortages and general labour market buoyancy.

Public sector organisations had clear goals relating to the delivery of public services

that are set against a range of externally determined standards and benchmarks.

Customer demand for these services was increasing faster than the resources available

to deliver them. In our two public sector organisations, adequate staffing levels were

critical to their ability to deliver the quality of service expected.

The nine private sector organisations had adopted business strategies compatible with

the markets within which they were operating. These were varied and related to price

competitiveness, fast turnaround and delivery times, the quality of the service offered,

specialist expertise and knowledge, ‘value for money’ and cost reduction. In many

smaller organisations there was no formalised HR strategy or infrastructure. However,

their approach to employees was usually well articulated and understood. Organisations

were seeking to fit their staffing needs to their business priorities, eg by adopting

flexible working practices to fit with customer demands.

In the main, managing absence was not a major issue of concern. Other labour related
issues were creating significantly greater pressures. The main concern was recruitment

and retention, particularly the ability to attract suitably skilled employees at a time of

viii

buoyant labour market conditions which, in a number of instances, led to initiatives

aimed at helping employees achieve an easier work-life balance.

The nature and extent of absence

Absence can be categorised in a number of ways. For the purposes of this study the

key distinctions were between planned and unplanned and long- and short-term

absence.

Unplanned absence included that attributed to the onset of illness (whether genuine or

not), and time off to deal with family and domestic emergencies, an ill dependent,

bereavement and urgent medical appointments. Most unplanned absence was short-

term. Planned absence included annual leave, maternity, paternity and parental leave,

religious holidays, career breaks, sabbaticals, time off for training and study, trade

union duties, time off for civic duties and for involvement in various voluntary and

community activities. Long-term sick leave and flexible working patterns (such as part-

time working or job-sharing) can also be regarded as planned absence. Planned absence

can be short- or long-term in nature.

Trends in absence within organisations were difficult to explore accurately, as very

little information was systematically collected and recorded. Sick and maternity leave

were usually recorded for pay reasons and to ensure compliance with statutory

obligations. However, these data were rarely being used to actively measure and

monitor absence. Nonetheless employers reported that sickness absence had generally
declined, that employees in less rewarding jobs were more likely to have higher levels

of unplanned sick leave and that sick leave was higher amongst young men (who were

seen to have more negative attitudes to work). More generally, employers reported that

there was a slight upward trend in the amount of non-sickness absence though overall

levels of take-up were relatively low. The take-up of parental leave was very limited

and this was attributed to it being unpaid and relatively little known. Provision above

the statutory minimum leave entitlements was generally restricted to select groups of

employees, depending on such factors as grade and/or role, line manager’s discretion

and their value to the organisation.

Managing absence

Policies relating to absence addressed two main issues:

Parameter setting for line managers and employees through defining what was

allowable and under what conditions

The management of absence, in particular monitoring and minimising sick leave.

Employers in this study consistently reported that unplanned short-term sick leave

was the most problematic to cope with on a day-to-day basis.

As a rule, the existence of formal policies to manage absence was a function of the

size of the organisation. Informality of practice was found in all of the case studies, but

the larger organisations also had policy documents to guide and regulate practice.

In smaller firms, practices to govern access to time off and to manage the

consequences of absence had built up informally over time, often relying on the

discretion of the owner or director. In practice, this meant that eligibility to time off for

domestic reasons, for example, may not be consistent or transparent. In addition,

practices adopted to cover absence tended to be more ad hoc than in larger

organisations. There were a number of reasons for the use of formal policies to manage

absence:

Of creating an environment of trust and reciprocity within an organisation

Compliance with legislation and to ensure that employees were aware of their basic

rights

To inform managers and employees what was acceptable and what was not

Practices could become more formalised and controllable

As part of promoting better work-life balance for employees

To aid recruitment and retention.

Line and project managers played a major role and had great autonomy in deciding

whether and how to provide cover. As a result of this, it is difficult to discern clear

patterns in the type of leave allowed because there is considerable variation amongst

line managers in what they will allow, and among individual employees in what they

feel able to ask for, especially where policies are not very specific. The confidence,

attitudes and background of individual managers played a role. In organisations, where

HR played a supportive role and flexibility is accepted, managers seem much better

able to cope with absence. The overall culture of an organisation was very important in

managers’ abilities to cope with absences.

The decision making process in covering short-term and long-term unplanned and

planned absences was similar, and most organisations adopted more than one

arrangement to cover absence. The first general approach was to look internally, and

only if there was no internal capacity, would people from outside be brought in. In

deciding how to cover a particular absence, duration of the absence tended to be the

most influential factor.

Unplanned absence

A number of contextual factors were identified as influencing decisions on whether

cover was needed and the type of cover. These included:

The immediacy of the work to be covered and the nature of client relationships

How busy the team/department with the absence is at that particular time

How busy other teams/departments are

The overall level of absence

The degree to which there is skill flexibility between roles/jobs to be covered, or

specialist skills are required.

A decision is taken as to whether cover is needed. If it is, it is always the preferred

option to cover within a team or department. This may include asking colleagues to

take on extra (unpaid) work on a temporary basis, paying overtime, or using internal

‘pools’ or ‘banks’ of staff. Some larger employers deliberately employed extra

permanent staff to provide cover in business-critical areas. Once options to cover

internally had been explored and exhausted, external cover was brought in.

Planned absence

Short-term planned absence was covered in similar ways to unplanned absence.

Longer-term planned absence might be covered (usually in the following order) by:

Some reallocation of work within a team or department

Moving someone else within the company, perhaps as a development opportunity.

These may be temporary promotions or secondments

A temp

Employing a replacement on a fixed-term contract.

Bringing in cover from outside was usually confined to support, rather than operational

or strategic roles. The specialist skills and knowledge needed in the latter positions are
rarely readily available, although external consultants were sometimes used.

The cumulative impact of absence

It was very difficult to identify a point at which the level of absence becomes a

particular problem for employers. There were a range of intervening factors, for

example, the immediacy of the work, relationships with clients and customers, how

busy a department or company is, the attitudes of managers, and the overall culture of

the organisation. Some senior managers expressed concerns about potential increases

in the take-up of planned leave and options to work flexibly. They anticipated there

being a critical mass of employees who are not available during normal working hours.

However, there was no evidence that this had yet occurred. Indeed, the dominant

picture was one where employers found planned absence considerably more

manageable.

Costs and benefits

The costs of absence

Only two organisations were able to attribute any kind of financial cost to absence or

provide the data needed to calculate the cost. In neither case were these data

comprehensive. There were a number of reasons for this, including:

Availability of data



data on the amount of absence is often not collated centrally

or, for certain types of absence is not collected at all. Furthermore, the information

needed to calculate costs is often held by different parts of an organisation and is

difficult to co-ordinate.

Willingness to provide data



several employers were unwilling to provide cost data

due to the amount of time and effort required, the sensitive nature of these data,

the need to make assumptions and estimates, and there being insufficient benefit in

making the effort (there are other more urgent priorities).

The following costs arising from employee absence were identified:

Direct financial costs, for example, the salary and other benefits paid to an

employee who is absent, overtime payments, the costs of hiring temporary cover.

Indirect costs, for example, the time taken for a replacement to learn the new role

and become productive; diminished services and product quality; loss of business

and reputation arising from absence. Although, when the need arose, managers

were seen to put significant effort into ensuring that these costs were only incurred

as a last resort.

Indirect cost on management time; including monitoring, consulting HR and

occupational health specialists, dealing with the individual involved, developing

strategies, arranging for cover, training and providing support to staff providing

cover. Overall, it was unplanned leave and some types of long-term sick leave that

had the greatest impact.

Indirect cost on HR time. HR managers generally saw managing absence and

enabling employees to work productively, flexibility and healthily as an integral part
of their role. The most costly type of absence in terms of HR time was sick leave;

and, all the organisations were proactively managing sick leave, in particular aiming

to minimise the amount taken.

The negative impact of absence on employee motivation, especially if it is not

properly managed, for example, where insufficient cover is provided or some

employees are seen to be abusing the system.

The benefits of absence

Employers generally found it difficult to identify benefits of absence. Nevertheless a

number of positive aspects emerged:

Providing opportunities for planned absence sends positive messages to employees

since they feel valued and prepared to reciprocate in terms of loyalty and putting in

extra effort when needed. Allowing employees time off to deal with emergencies

was said to improve productivity since employees spent less time at work worrying

about problems and trying to sort things out.

Providing development opportunities for other employees allowing them to show

their abilities in more senior positions. This was particularly associated with

providing cover for long-term, often planned, absence.

Requiring employers’ managers to rethink their labour resourcing requirements and
the organisation and allocation of work. Where this happened, it often led to wider,

sometimes unanticipated benefits to the business.

Conclusions

This study draws the following conclusions:

Employers were generally unconcerned about most types of absence. They had

other more pressing human resource priorities. Most effort was put into managing

and minimising the amount of absence due to illness, or absence attributed to this.

It is the unpredictability of some absence which caused the greatest problem.

The ease and effectiveness with which absence was managed varied between

employers. Some had ad hoc and somewhat reactive approaches, others had well-
established practices which allowed them to respond to most incidences of

absence.

Those who managed absence well were also more likely to have a climate of trust

and mutuality, a positive outlook amongst line managers and high levels of internal

skill substitution.

Introduction

Managing absence: the context

Employee absence from work has received greater attention in recent years. In part this

has been due to increased emphasis on employers’ ‘duty of care’ towards their
employees, a concern to maximise labour utilisation in competitive marketplaces and a

concern to minimise the costs and disruption caused by excessive absence from work.
In aggregate, there are several sources of data about absence in the UK. The Labour

Force Survey (LFS) publishes data on the percentage of employees absent from work

due to illness or injury on at least one day in a reference week. Data from the winter

2000/2001 LFS show this rate to be 3.8 per cent

of working days lost. Other data are

derived from surveys of employers. For example, the Confederation of British Industry

(CBI) conducts an annual survey of sickness absence patterns. Its 2001 survey

shows

that an average of 7.8 days (3.4 per cent) were lost per employee in 2000 (a similar

figure to 1999). The 1998 Workplace Employee Relations Survey

collected data from

establishments which suggest that average daily absence rates for those with more

than 25 employees stood at 4.1 per cent. While there are other employer surveys of

absence (conducted, for example, by the Industrial Society and by the Chartered

Institute of Personnel and Development), none are able to provide a definitive picture.

One of the reasons for this is that a core assumption of many of the surveys is that

employee illness or injury is the primary causes of absence. Yet in recent years it has

become clear that employees can be absent from work for a wider range of reasons. A

recent DTI survey

shows that fewer employers record data on absence for reasons

other than illness or injury, particularly paternity leave. This situation has been

influenced, in part, by a changing policy context.

Managing absence: the policy context

Employees in the UK now have improved statutory rights to time off work. These

developments reflect both a shift in emphasis in EU and UK policy, and a changing

pattern of demand from employees themselves. Many of these rights have been

introduced to allow employees opportunities to balance the demands of their work and

their domestic responsibilities. For many years UK employees have had statutory rights

to maternity leave and time off for trade union duties. The Employment Relations Act

(ERA) 1999 introduced further entitlements for:

Labour Market Trends, May 2001, p. 237

CBI, ‘2001 Absence and Labour Turnover Survey’, May 2001

Cully M. et al. (1999), Britain at Work: As depicted by the 1998 Workplace Employee

Relations Survey, London: Routledge

DTI Employers survey on Support for Working Parents, 2000

Thirteen weeks unpaid parental leave within the first five years of the child’s life

Unpaid leave to deal with an emergency involving a dependant

Improved and additional rights to maternity leave.

In addition, the Working Time Regulations (WTR) 1998 gave all employees a right to

four weeks paid leave from 1999; while in the course of this study the government

announced that it

would also provide employees with paid paternity and adoption

leave (due in April 2003) and extended maternity rights (including increased maternity

pay from April 2002, an increase in the period over which statutory maternity pay is

paid from April 2003 and an increase in relief for small employers for maternity pay

from April 2002).

In sum, there has been an extension to the range of current provisions under which a

proportion of the workforce might legitimately be absent from work. Some of these

absences can be anticipated and planned for, including:

Annual leave

Maternity leave

Time off for ante-natal care

Adoption leave

Career breaks

Absence for civic responsibilities

Religious holidays

Paternity leave

Parental leave.

Others may be unplanned, including:

Time off for domestic emergencies

Lateness

Short-term sickness absence.

While the intention of policy in this area is to improve provision for employees with no

previous rights to annual leave and for those with domestic caring responsibilities,
policy-makers are also concerned to ensure that such provisions do not place

unnecessary burdens upon employers. It might be argued, for example, that new rights

to time off work (including those recently proposed) could represent an additional

burden on employers, if they result in a significant increase in both the direct and

indirect costs associated with the need to manage the consequences of either planned

or unplanned absence from work.

Work and Parents: Competitiveness and Choice

 Green Paper, (DTI, 2000) announcements

made in Budget 2001 and subsequent announcements.

It was a concern to assess the ways that employers manage a range of absence which

prompted the Department of Trade and Industry (DTI) to commission the Institute for

Employment Studies (IES) to conduct a research study into current employer practice.

Aims of the study

The primary aims of the study were:
1. To investigate how employers manage and cope with the consequences,

organisational and administrative, of planned and unplanned absence of different

duration, and to identify the range and estimate the costs associated with coping

with different types of absence.

2. To provide a range of examples of how employers deal with different types of

absence and their consequences (eg arranges cover, hires temporary staff, re-

allocates workload etc.). This will focus on assessing both the direct and indirect

costs and benefits to the firm of the employers’ decision to manage absence.

3. To investigate whether the recent legislation will result in new administrative

burdens or other costs, and whether these are expected to be offset by a reduction

in reported sickness absence.

4. To gather other, contextual, information about employers’ approaches to measuring,

monitoring and managing absence, investigate the level and process of decision

making, and to broader work-life issues.

5. To compile a research report which details the key findings from the study in a

manner which allows policy makers to understand employer behaviour in the light of

new leave arrangements introduced under recent legislation.

Absence management: literature review

All of the mainstream literature in this area deals with the control of absence or the

management of attendance. Thus, its focus is the absentee worker rather than the

direct workplace consequences of absence and its management. Some passing

references are made in some work on the need for co-workers to cover absence, but

these are used as reasons for controlling absence rather than as a substantive issue for

study.
We have so far found no work which examines the strategies adopted by employers to
manage and cover planned or unplanned absence of the kind under scrutiny by the

current study.

It is interesting to note, however, that the tenor of the literature on absence has

changed over the last decade. It has done so in the following ways:

1. Reduced emphasis on control: much of the early literature has concentrated on

absence being a facet of employee behaviour which needs to be controlled and

minimised (Scott and Markham, 1982; Erwin and Iverson 1994). This has been an

approach perpetuated by the personnel profession and by the language used in this

field. As Bevan and Heron (1999) point out:

‘The persistent use of the term absenteeism, for example, reinforces a view

held by many line managers that individuals have a psychological disposition

towards absence or, put another way, indifference towards attendance.’ P.4

A key characteristic of the literature in this area is the implicit notion that non-

attendance per se, is always negative and that maximising attendance is a key

responsibility of the employer for reasons both of control and of operational

effectiveness.

2. Increased emphasis on line manager roles: in a development which mirrors greater

delegation of people management in many organisations, there has also been an

increased emphasis on the role played in managing absence by line managers

(Reynolds, 1990; Cole and Kleiner, 1992). This is, in part a tacit recognition of the

fact that local management is more likely to be able to identify and influence some

of the causes of absence and, indeed, to manage the consequences.

3. Greater recognition of non-medical absence: outside of the field of organisational

behaviour, the dominance of literature focusing on the medical causes of absence

has contributed to ‘sickness absence’ being seen as the most important cause of

non-attendance (Jenkins, 1985; Leigh, 1986). In the last decade, however, major

reviews of the literature (Johns, 1997; Harrison and Martocchio, 1998) have sought

to ensure that non-medical causes of absence (such as morale, organisational

climate, domestic caring responsibilities etc.) have been properly seen in context.

4. Growing recognition of the use of ‘sickness absence’ as generic term for wider

absence: some literature has begun to examine the extent to which employees are

absent for reasons other than sickness. Haccoun and Desgent (1993) found that

female employees were more likely to report that they were absent owing to the

illness of a child. Similarly, Nicholson and Payne (1987) found evidence that women

were more likely to be absent because of domestic problems. Haccoun and Dupont

(1987) conducted a study in a hospital which involved interviewing employees

returning from a period of either planned or unplanned absence. They found that 72

per cent admitted that they had not been ill. Among other activities (including

shopping) women reported that they had been tending to family matters. Men were

more likely to report ‘resting’. As this body of work grows, it becomes clearer that
researchers are accepting that employees are absent from work for a wider range of

reasons than illness. It is also clear, however, that illness is still frequently regarded

as only one of the ‘legitimate’ or valid reasons for absence from work



though this

view is slowly changing as the work-life debate gains greater prominence.

5. Interest in the consequences of absence: a narrow range of studies has looked at

the consequences of employee absence. Some have examined the impact on

individual performance (Bycio, 1992; Tharenou, 1993). These studies show that

supervisory performance ratings of employees with high absence tend to be lower,

as is attainment on accredited courses. Other work has examined wider

organisational impact. Moch and Fitzgibbons (1985) found that absence had a

negative impact on departmental production efficiency only when the absence was

unplanned. In a study of coal miners Goodman and Leyden (1991) found that
absence caused reduced workgroup familiarity which, in turn, led to reduced

productivity. In another related study of miners (Goodman and Garber, 1988),

unfamiliarity owing to absence was found to be related to an increase in accident

rates. Barber, Hayday and Bevan (1999) found that, in a retailing business, staff

absence was negatively correlated with customer satisfaction.

Overall, therefore, the literature illustrates the continuing dominance of absence related

to ill-health in the consciousness of both researchers and practitioners. However, there

are signs that the emphasis of absence management is moving away from control of

absence and towards the encouragement of attendance. In addition, there is a

recognition that absence can frequently be attributed to a growing range of factors

beyond ill-health.

Costing methodologies

Within this category, there are two groups of material providing practical examples of

costing methods that will be useful to the study.

Tools to cost absence

While these are very few and far between, we found one or two useful examples:
1. Checklist produced by Cascio (2000) to derive the hidden costs of ‘Absenteeism and

Sick Leave’. The checklist, which comprises 11 key steps, is illustrated with worked

examples from a hypothetical manufacturing company. The chapter in which this

checklist is described also contains guidance on the interpretation of absence costs
data and the management of absence.

2. A simpler checklist is reported by Seccombe and Buchan (1993) for use among

nursing staff in the NHS. It differentiates between direct and indirect costs,

identifies the approaches used to cover for absent employees and attempts to

quantify the impact of absence on both quality of patient care and on productivity.

Contains a worked example.

3. An approach to costing absence which is based on predicted behaviour is described

and tested in a study by Martocchio (1992). Using measured job attitudes, this work

predicts absence behaviour among employees and then seeks to ascribe a cost to

this absence. This is the least useful study as it implies that absence is dispositional.

It also fails to differentiate between direct and indirect costs.

4. A detailed checklist devised by Oxenburgh (1991) as part of a publication on health

and safety management. Using a worked example, it focuses on employment costs

and lost productivity. It also combines ‘top-down’ approaches with ‘bottom-up’

methods. It makes puzzling assumptions about the allocation of HR costs.

5. An unpublished study by Berkowitz (1995). This used a checklist approach to

calculate the ‘full costs’ of absence due to illness or injury. It appears to be

comprehensive work, though little technical detail of the approach is available. No
occupational differences are examined.

While this was a somewhat disappointing result, it was not unexpected. On a positive

note, the Cascio, Oxenburgh and Berkowitz work was quite comprehensive and was of

considerable benefit in designing an absence-costing tool.

Tools to cost other labour flows

This is a field where the review has unearthed rather more which will be of practical

benefit. The main area covered by this work is employee turnover, where more work on

costing has been conducted.
Much of this work is rooted in human resource accounting approaches which were

popular in the USA in the 1970s and 1980s. Thus, the work of Bassett (1972),

Flamholtz (1973), Jeswald (1974), Fitz-enz (1984); and Dawson (1988) were attempts

to devise robust approaches to the calculation of replacement costs. For the most part,

this work is comprehensive, but is likely to be too complex to be used by managers in

organisations. Other, more practical approaches (Cawsey and Wedley 1979; Hall 1981;

Cascio 1987; Bland-Jones 1990; and Fair 1992) are more useful as they were based

on data to which employers were likely to have access and were presented in a more

logical manner. A detailed checklist produced by Hall (1981) remains one of the most

comprehensive and practical tools available. Important features include its approach to

costing lost productivity among replacement staff, its use of weighted averages in the

firm-level aggregation of job-specific data, and its worked examples.

The various approaches to costing employee turnover in the literature lead us to the
view that the four main elements of cost that can be identified are:

Separation costs: costs relating to the termination of the contract of employment

(eg exit interviews, payroll administration)

Temporary replacement costs: costs generated by the provision of temporary or

supplementary cover as a direct consequence of an employee leaving

Recruitment and selection costs: those costs incurred in replacing the single,

notional leaver

Induction and training costs: those costs incurred, after appointment, in establishing

the new incumbent in his or her post, and developing their skills and expertise to

the point at which they cease to be a net cost to the employing organisation.

Based on these headings, IES (Buchan, Bevan and Atkinson, 1988) has developed its

own turnover costing checklist by asking 20 employers to complete the checklist for

three different jobs (clerical, professional and managerial). The piloting exercise judged

the checklist against four main criteria:

Incidence: the extent to which the defined cost was commonly or normally incurred

during turnover

Variability: the potential variance in the magnitude of the cost incurred

Maximum magnitude: the extent to which the cost heading was a major contributor
to the overall cost of turnover

Accuracy of measurement: the degree to which an accurate measurement of the

defined cost was feasible, given the existence (or otherwise) of relevant data.

It was found that certain posts, and the way that a vacancy was covered, attracted

higher temporary replacement costs. It was also found that employers needed to make

assumptions about the cost of management time (by the hour or the day), and about

the time it took for a new recruit to become a net contributor to the organisation (the

learning curve productivity costs).

In using the principles of the Hall checklist and the checklist devised by IES for the

purpose of costing absence, a number of points should be noted which might

reasonably be expected to increase the values derived by them:

1. The checklists rely predominantly on identifiable direct costs. They make no

allowance for other items of cost which might reasonably be attributable to turnover

or absence, including lost sales, lost customers, sales opportunities not taken,

inability to take on new (or fulfil existing) contracts. These ‘opportunity’ costs can

be attributed both to the leaver/absentee and to those covering the vacancy or

spending time filling the vacancy or organising cover.

2. The salary element of costs do not account for National Insurance contributions or

other employer ‘on-costs’ such as pensions.

3. No allowance is made for any performance differential between leavers and their

replacements.

4. No account is taken of the differences in costs between internal and external cover

for absence.

5. No explicit account is taken of the duration of the absence being covered and its

impact on costs.

6. No account is taken of lost productivity among co-workers of a leaver/absentee both

while the vacancy remains unfilled and during the induction and initial training of a

new or temporary postholder.

At the same time, in a number of other respects, an individual incidence of turnover or

absence may result in short-term financial benefits. These include the following:

1. The saving of the employment costs of the leaver/absentee while the post is vacant
2. The difference in salary between the leaver/absentee and the replacement (assuming

the replacement is being paid at a lower level).

Neither of these factors is taken into account in the costing approaches reviewed to

date. To this extent, replacement and productivity figures arrived at through the use of

such checklists cannot be said to be ‘net costs’.

Contribution of the current study

The current study has a distinctive focus in several respects:

It places an explicit emphasis on the organisational consequences of a wide range

of absence. Previous work has focused primarily only on sickness absence, with

little attention given to the consequences for the employer.

In doing so it differentiates between planned and unplanned absence, anticipating
that different forms of absence may be easier to manage than others.

It seeks to identify and quantify the costs and benefits associated with various

forms of absence.

In looking in detail at employer practices, the study is also firmly set within a policy

context where the take-up of a widening range of policies and practices which

allow employee to take time off work is likely to increase.

It was expected that the study would provide qualitative evidence of the management

strategies being adopted to manage absence, and that it would highlight areas for

future research as employer practices change.

Methods

Case study research design

A case study approach for this research was chosen for two main reasons. First, case

studies allow a detailed appreciation to be gained of the business context of each

participating organisation. This is essential if the business consequences and costs of

managing absence is to be understood. Second, case studies allow a more detailed

understanding to be gained of the factors underpinning managerial decision-making

(such as the competitive position of the organisation, its culture and its history).

It was also felt important that the research should gather:

1. Detailed narrative accounts of how absence was being managed on a day-to- day

basis

2. The views of senior managers, line managers and employees about managing the

consequences of absence

3. Organisation-level data on the patterns of absence being experienced, together with

any data on costs and/or benefits which were available.

It was felt that a case study design (rather than, for example, a survey design) was

best suited to addressing the project aims. A total of 11 case study organisations were

included.

Selection of case study organisations
It was felt likely that approaches to managing absence might vary by employer type. In
order to examine this, it was decided to select case studies according to a number of

criteria. These criteria reflect some prior expectations about where problems in

providing cover might occur. Each is described below.

High proportion of female employees: in these organisations it might be expected

that there would be a high take-up of leave arrangements which focus on domestic

care responsibilities (eg maternity leave, emergency leave, parental leave etc.). In

these organisations it might be more likely that the cumulative impact of a

significant number of absences would be experienced.

Low skill substitution owing to size: in these organisations it could be hypothesised

that some absence will be difficult to cover owing to the small number of

employees. In such circumstances, it might be that low staffing levels do not allow

scope for transferability or cover.

Low skill substitution owing to skill specialisation: here, the organisation may find

the management of absence difficult if employees have specialist skills which make

internal transferability or external temporary replacement of staff difficult.

Low skill substitution owing to high dependence on client relationships: in these

organisations, the nature of employee relationships with customers and clients is

such that absence among some staff groups are difficult or costly to cover because
of client-specific knowledge or a high dependence of clients on certain key

individuals.

Data collection tools

A number of tools for collecting data were designed for the study. These appear in

Appendix C. In summary, they are:
1. Human resources (HR) manager discussion guide: this was intended to collect

information about the organisation’s policies and practices in relation to absence,

how these policies were initiated, their focus and their impact.

2. Line manager discussion guide: this was particularly focused on identifying the

practical steps which line managers took to organise cover for absence and to

examine the practical consequences of absence within the organisation.

3. Employee discussion guide: this guide was intended to collect views from employees

about how their own absence was covered, the impact this had on them, their

colleagues and clients. It was also intended to be a way of collecting views from

those employees affected by the absence of colleagues.

These tools were developed in consultation with the DTI and amended after the early

case studies were started. In addition, case study organisations were asked to provide

supporting material (eg details of formal absence policies), where available.

Costing tool
One of the aims of the study was to explore the extent to which employers are able to

ascribe financial costs or benefits to absence. Using examples from the literature, IES

developed an absence costing spreadsheet (see Appendix D) which collected data on:

Table 1.1 Summary of case study organisations

Type of organisation

Number of
employees

Sample selection criteria

Small IT business

Low skill substitution



size

Small engineering company

Low skill substitution



size

School

Low skill substitution



skill specialisation

NHS trust

High proportion female employees

Food retailer

High proportion female employees

Law firm (secretarial function)

High proportion female employees

Financial services



back office

function

High proportion female employees

Financial services



call centre

Low skill substitution



client relationships

Financial services



complaints dept

Low skill substitution



client relationships

Telecomms R&D

Low skill substitution



skill specialisation

Merchant bank

Low skill substitution



client relationships

Manufacturing company

Traditional male manufacturing/low take-up
expected

Technical R&D

Low skill substitution



skill specialisation

S = small (less than 50 employees), M = medium (50 to 250 employees), L = large (over 250 employees)

1. Absence patterns, for the last full year, by employee group, type of absence, gender

and age group

2. Direct costs of absence, including the salary, NI, pension, bonuses and benefits of

those employees who are absent

3. Indirect costs of absence, including the costs of internal cover (overtime etc.) or

external cover (eg temporary or agency staff)

4. Absence management costs, including management time, HR or administrative time

spent managing absence

5. Information on benefits.

The costing tool was intended to collect data which was already held by the case study
organisations (eg absence patterns, salary data) as well as data which could be inferred

through questioning (eg estimates of time spent by line managers in the management

of absence).

While a key aim of the study was to collect data on the costs and benefits of absence

to employers, this proved exceptionally difficult for a number of reasons.

Availability of data
Most of the case study organisations found it difficult to provide data on their absence

patterns, the direct employment costs associated with these absence, and any indirect

or secondary costs. This was because:

These data did not exist at all (especially in the smaller organisations)

Only data on absence patterns was held

Data was held by different parts of the organisation and was difficult to co-ordinate.

In general, we found that even large employers with sophisticated HR systems and

personnel databases found it difficult to gather the data we asked for.

Willingness to provide the data

On a related theme, we found several employers unwilling to give us cost data

because:

Their initial willingness waned when they realised the effort required

They felt the data was commercially sensitive (eg the merchant bank became

sensitive about releasing any pay data in the light of a legal case on pay and gender

which they subsequently lost)

They argued that there was not sufficient benefit to them to collate the data



their efforts were better expended elsewhere.

In many cases we found employers initially happy to provide this data, but

subsequently unwilling. We were made many promises, but none were fulfilled. In most

cases we felt we pushed the employer as far as we reasonably could for these data. In

one or two cases we ran the risk of them withdrawing from the study completely.

In order to encourage employers to provide the data we adopted the following

strategies:

IES took HR managers and others (eg information systems people) through the data

sheets explaining the purpose and content. We highlighted where they would be

likely to be able to use existing data and where estimation might be needed.

IES suggested that only data on particular employee groups need be provided



simplify the task.

IES offered to provide either face-to-face or telephone support in the completion of

the forms.

IES offered to provide research officer support on the employers’ premises if lack of

internal resources was an issue.

None of them took advantage of the latter two options, despite our efforts.

As a result we have obtained only patchy data on costs:

The law firm has provided some data for some staff groups

The school was able to prove very basic data, which appears in the case study

The financial services firm promised to complete the whole costing sheet, but finally

was only able to provide data on absence patterns

Neither micro firm had data of this kind

The manufacturing company refused to provide data on the basis that it felt it

would derive no benefits from doing so

The merchant bank felt the data would be commercially sensitive.

Analysis and reporting

The fieldwork resulted in the collection of a large amount of both qualitative and

quantitative data. Analysis and synthesis of these data has:

Focused on the organisation as the primary unit of analysis

Been dominated by qualitative data from a range of sources (although not all

participating organisations were able to provide access to employees)

Relied less on comprehensive data on costs than was originally hoped. It became

clear that most participating organisations were unable to supply detailed or

comprehensive data on patterns of absence or costs.

The case studies have been written as narrative accounts, each within a business

context. These appear in Appendix A and contain both qualitative and quantitative

data. Table 1.1 summarises the case studies which are presented.

The main body of the report contains a description and analysis of:

The business and employment context within which the participants were operating

(Chapter 2)

Business and employment

context

The study was conducted during a period of economic growth, low unemployment,

widely reported skill shortages and general labour market buoyancy. In these

circumstances it might be expected that most employers would have a heightened
sensitivity to absence among employees.
In this chapter we will briefly assess the strategic business and employment issues that

were being faced by the case study employers. In doing so, we will seek to establish to

what extent employee absence had become a strategic impediment to the meeting of

key business goals.

Business strategy: markets and competitors

The public sector organisations which participated in the study (the school and the NHS

trust) had clear goals relating to the delivery of public services. These were set against

a range of externally determined standards and benchmarks (GCSE passes, patient

episodes, waiting lists, costs etc.). In these organisations there was a strong sense that
‘customer demand’ for these services was increasing at a faster rate than the resources

available to deliver them. In both public sector organisations it was clear that adequate

staffing levels were held to be critical to their ability to deliver the quality of service

expected of them.
In the private sector the participating employers had adopted business strategies

compatible with the markets within which they were operating.

The manufacturing company was seeking to defend its dominant market share

through price competitiveness, fast turnaround of production and rapid delivery

times.

The merchant bank was trying to differentiate itself from its close competitors by

offering clients high quality service, an integrated and global product portfolio, and

exceptional expertise among its staff.

The law firm was aiming to dominate the market within an emerging business-to-

business sector, by developing deep expertise and specialised services at a high

price and with high quality people.

The food retailer was seeking to regain recently eroded market share by competing

on ‘value for money’, cost reduction and by maximising convenience.

Each of these businesses, to a greater or lesser extent, was able to articulate its
strategy towards its target markets, its competitive position, and the specific

characteristics of its product or service offer with which it hoped to reach its target

market and compete successfully with its rivals.

Links to human resource (HR) strategy

Most of the espoused business strategies of the case study organisations made explicit

mention of the internal capability or resources needed to achieve business goals. We

were interested in the extent to which HR strategy in these organisations would be

consistent with (and derived from) business strategy. It was expected that this

relationship would be most critical where employees (rather than technology,

equipment etc.) played a central part in delivering competitive advantage.
Some examples will illustrate the extent to which such coherence was found in the

case study organisations:

In the merchant bank, the recruitment, performance and retention of high quality

traders and analysts were central to profit growth. This was manifested by its long

hours, high rewards and client-centred approach. While global, real-time information

systems were also critical, the firm made sure that looking after its people was a

strategic priority.

In the small engineering company, the need for specialist engineers with particular

sensitivity to product quality issues was a critical contributor to the delivery of high

quality products to clients in their niche markets.

In the small internet company, client demands for greater support and guidance
have meant that the skills base of the employees has had to shift from being

predominantly technical to embrace commercial and consultancy skills.

Across most of the case study organisations we found that the ‘people’ part of the

broader business picture was well understood and readily articulated. Organisations

seemed to have a view of the ideal ‘fit’ between their main business priorities and their

staffing needs. In most cases this did not manifest itself as an explicit HR strategy



indeed, in the smaller organisations there were no HR managers.

Overall, the core staffing concerns which most of the employers had, surrounded

recruitment and retention. The ability to attract suitably skilled employees and then to

retain their services long enough for them to add value to the business were dominant

concerns, especially with buoyant labour market conditions. Indeed, these pressures

were the most frequently cited staffing impediments to meeting business goals. These
pressures were also commonly cited as drivers for the broader use of policies and

practices aimed at helping employees improve their work-life balance.

Vulnerability to absence

Although the focus of the study has been the management of absence, taking the

wider business picture in the case study organisations, absence was in no case the

staffing issue which was currently causing most concern. Indeed, the manufacturing

company curtailed its participation in the study, claiming that the management of

absence was not of sufficient concern (compared with other priorities) to warrant

spending more time on it.

Nonetheless, there are circumstances where absence can have significant business

consequences. Indeed, it is possible to characterise the main business and employment

factors which might affect the vulnerability of organisations to absence. The typology

in Figure 1 is an attempt to do this.

This typology represents the two dominant aspects of managing absence which the

current debate suggests are of importance to employers. The first, Business Impact,

can include financial costs, non-financial costs (eg work quality), lost business, inability

to take on extra work etc. The second, Ease of Organising Cover, reflects the balance

between planned and unplanned absence and the extent to which either internal or

external skill substitution is possible. Firms in each of the four zones depicted in the
typology might have the following characteristics:

Zone A

 Absence is difficult to cover and has a high business impact. Here, it might

be expected that this zone would contain firms with fewer skill substitution

opportunities, especially if competitive advantage was substantially derived from client

relationships, if the firm is small, if take-up of absence opportunities is high, and if a

high proportion of the absence is unplanned.

Zone B

 Absence is relatively easy to cover but has a high business impact. Here,

firms may have a high degree of predictability in their absence (or readily substitutable

skills), making cover relatively easy to organise, but may still bear significant financial

and non-financial costs as a result of absence.

Zone C

 Absence is relatively easy to cover and has low business impact. In these

firms, absence is easy to cover (high proportion of planned absence or readily available

Figure 1: Vulnerability to absence

Difficult to

cover

Low impact

on business

Easy to

cover

High impact

on business

substitution) and the consequences for the business are relatively insignificant (eg in

terms of cost, lost business etc.).

Zone D

 Absence is difficult to cover but has low business impact. Here it might be

expected that a high proportion of absence is unplanned or is not easy to cover, but

that the business impact (either in terms of costs or lost business) is relatively low.

According to this typology, the scenario depicted in Zone A represents a state where

the balance between access by employees to legitimate absence from work and the

business consequences of granting such access, may begin to place intolerable costs

on business which are unlikely to be outweighed by any benefits. Conversely, the

scenario depicted in Zone C represents a situation in which (assuming the same level of

absence as in Zone A) most employee demand for absence can be met with acceptable

costs and business consequences, and in which a number of benefits to the firm

additionally accrue. For example, the need to provide cover for colleagues may

represent an opportunity for skill development and the broadening of experience for

those providing the cover. It might be hypothesised from this typology that the factors

likely to have most impact on a firm’s position in the model will include:

1. Levels of planned or predictable absence



the higher the level the lower the

impact on the business

2. The ease of internal or external skill substitution



the greater this is the lower the

impact on the business

3. The actual or perceived benefits accrued from granting employees access to policies

allowing absence



the greater these benefits the lower the impact on business.

The extent to which evidence from the case studies supports these hypotheses is

discussed in the remaining chapters of the report.

The nature and extent of
absence

Introduction

As we have seen, the number of ways an employee may now be legitimately absent

from work has recently increased. This was reflected by the experiences of most of the

case study organisations.
This chapter discusses the different types of absence and their classification into

planned and unplanned absence. Chapter 4 looks at the implications of these different
groups of absence for managers, in particular the ways in which cover is arranged. All

types of absence matter to employers. Planned absence is easier to manage; by

definition, plans can be made to cope with this. Unplanned absence creates greater

problems. However, it is difficult to identify a precise level at which absence presents

particular difficulties. The nature of the business and competitive pressures all play a

role. These issues are discussed in Chapter 4.

Absence is an issue for employers, or time would not be devoted to developing

absence policies. The nature of policies is discussed later in this chapter. The types of,

and reasons for, introducing absence policies help to illustrate some of the pressures on

employers, and situations in which absence is problematic. For example, sickness

absence is a major concern for employers. Policies aim to monitor and proactively

manage sickness absence. Policies addressing other types of absence, for example,

ensure that legislative requirements are met, and set parameters and guidance to

employers and employees. These all aim to ensure consistency of treatment and

transparency within organisations.

In this chapter we explore:

The range of types of absence being experienced by organisations

Their formal policies relating to absence management

Trends in the patterns of absence being experienced

The factors underlying these patterns

Approaches to the measurement and monitoring of absence.

Examples from the case studies will be used to illustrate key points throughout the

chapter.

Types of absence

There are a number of ways in which absence can be categorised. They may be:

Unplanned or planned

Short-term or long-term.

In addition, absence may result from statutory rights or may be based on employer

discretion. Absence may also be paid or unpaid.

We found that the extent to which absence were planned or unplanned, and whether

they were short-term or long-term have particular implications for how cover is

arranged and the type of cover used. Each type of absence is discussed below. The

cover arrangements put in place to address each are discussed in Chapter 4.

Unplanned absence

The main type of unplanned absence encountered by case study employers was sick

leave, or at least absence which is attributed to illness. This type of absence is taken

for a range of reasons and these are listed below:

Genuine illness or injury

Illness amongst other family members, in particular children

High living at the weekend or during an evening

Childcare arrangements breaking down at short-notice. This is often attributed to

illness, particularly in organisations with little access to emergency leave and with

limited flexibility

Negative feelings about the job, managers, the organisation

Problems at work, eg poor relationships with other employees

A general feeling of being disaffected: ‘Other people take time off so why

shouldn’t I?’

In many case study organisations, managers talked about ‘Mondayitis’ and the

prevalence of sickness absence on Mondays and Fridays. This was something they

were looking to control.

Other types of unplanned absence include time off:

To deal with family and other domestic emergencies

When a dependant is ill

Due to bereavement

For medical or dental appointments.

In many cases, patterns of short-term and unplanned absence were perceived by

managers as attributable either to the disposition of the individual employee (for

example, likely to have Mondays off because of over-indulgence at the weekend), or to

the individual’s domestic circumstances.

Planned absence

Planned absence includes statutory leave and those under which an employer has some

sort of obligation, although not necessarily compulsion, to allow employees time off.

The main types of planned absence are:

Annual leave

Maternity leave

Paternity leave

Parental leave

Religious holidays

Career breaks, usually for family reasons

Sabbaticals, for example, to go travelling

Time for training and study

Trade union duties

Time off for civic duties, for example, jury service

Time off for involvement in various voluntary and community activities at the

discretion of an employer, for example, being a school governor or a member of the

Territorial Army.

All these types of absence refer to instances where employees are absent during their

‘normal’ working hours. There are also cases where individuals’ own ‘normal’ working

hours do not correspond with the ‘normal’ working hours of other employees or their

business unit, ie where employees have flexible working practices such as reduced or

alternative hours. This is not ‘absence’ in the same sense. Employees are performing

their usual work and most employers offer some form of flexible working. They do so

because they recognise it is beneficial to their business, eg it can boost morale, help

retain skilled staff and keep staff turnover low.

Again, in the course of the study the government also announced that it would be

introducing a right for parents of young children to request to work flexibly and have

the request seriously considered by the employer

. However, in conducting the case

studies, some employers talked about flexible working as a form of planned absence.

Once sickness becomes long-term it is nearly always treated as a form of planned

absence. The end point of this might be less clearly identifiable than that of other types

of planned absence. However, once it is known that an illness is going to last for a

matter of weeks or months, the way in which cover is approached has closer alignment

with planned absence. In some circumstances, for example, recovery from an accident

or surgery, absence is largely regarded as planned. An employer usually knows

approximately how long this is likely to take, or at least that the absence will continue

for a relatively prolonged period.

In June 2001 the Government announced that a Work and Parents Taskforce would be

established to look at how best to implement a legislative right for parents of young children
to request flexible working.

Long-term and short-term absence

The definition of long- and short-term absence is not precise. We found little evidence

that once an absence is over a certain number of days or weeks, it is regarded as long-

term. It is frequently more a question of degree. However, the length of an absence

does have implications for the type of cover which is seen as most appropriate. This is

discussed further in Chapter 4.
There is some relationship between the extent to which an absence is planned or not

and whether it is long- or short-term. Most longer-term absence is planned: for

example, maternity, paternity and parental leave, and long-term sick leave.

Most unplanned absence is short-term as, almost by definition, once an absence
becomes long-term it can be planned around. However, some types of planned absence

is also short-term, for example, time off for various civic duties.

While longer-term absence was commonly regarded as easier to manage on a day-to-

day basis, the high costs of compensation claims for work-related stress etc. were

causing considerable concern in both public and private sector organisations. Senior

managers have pressured HR and occupational health specialists to find solutions to

limit costs and promote well-being. In this context, it was surprising to find little

evidence of interest in preventing short-term sick leave from becoming long-term.

Policies

Policies relating to absence address three main issues. They set parameters for line
managers and employees through defining what is permissible and under what

conditions, for example, the number of days of emergency leave and whether these are

paid. In some organisations, rather than a definitive list, managers are provided with

tools for making decisions on a case-by-case basis about whether absence or flexible

working patterns should be allowed. This was the case in the financial institution. The

second type of policy addresses the management of absence. The main example here is

sick leave. Many organisations have a policy aiming to monitor and minimise this.

A further aspect of policy is the arranging of absence cover (and this is discussed in

Chapter 4). We came across few explicit policies in relation to this; rather,

organisations have a set of practices which are applied.

Policies defining rights to absence

Smaller firms are less likely to have written policies relating to any aspect of absence.

Depending on the nature of the firm, custom and practice define how absence is

managed. One of the very small firms we visited was unusual in having a written

employment contract which set out policies, for example, in relation to sick leave,

parental leave and emergency leave. This had come about due to bad experiences in

the past and the need to be explicit with employees about their basic rights. The

director in the other small firm had clear views about how employees should be
treated, and the responsibilities of employer and employee, but there was no explicit

policy on absence.
As a firm grows in size, the need for more explicit policies emerges. This is usually to

ensure consistency of practice. There was evidence of this in the law firm. They had

grown rapidly in recent years and this had prompted the need to establish a range of

more formal HR policies, including policies on absence management.

There were a number of examples of employers introducing policies, in particular

written policies, to support managers. A growing range of flexible working patterns and

rights to time off mean that line managers have more responsibilities in ensuring the

work is covered and that sufficient people are working at any one time. Furthermore, in

many organisations, managers are being given greater autonomy to run a section or

department in the way they think appropriate. These changes mean that managers are

increasingly struggling to know what reasons for and amounts of absence are

permissible. Employees want more information on what it is possible to ask for.

Line managers in the NHS trust received training as a matter of course when revised

policies relating to work-life balance were introduced. Manager training had been found

to be critical to the successful reduction of levels of sickness absence some years

earlier, and so was included as a central part of the strategy to publicise and implement

the new policy. Other elements of the strategy included written policy documents,

presentations to senior management teams, road shows and drop-in events and the

involvement of unions at all launch events. This was felt necessary due to concerns

amongst managers and staff about accessing leave. In particular, there was some

ambivalence amongst managers about staff having access to more leave, and the

potential impact this would have on service delivery.

The majority of case study firms had written policies relating to employees ’ statutory

rights, in particular maternity leave. Managers want to ensure that the legislation is not

contravened. Parental leave was less often addressed but was beginning to be

incorporated into written policies. Many employers are still feeling their way in relation

to parental leave. Some had established a policy which sought to follow the legislation,

and were waiting to see how this worked in practice. Several were waiting to hear the

outcome of the recent government review of maternity pay and parental leave before

reviewing their own procedures and writing new or updated policies.

Written policies set out the statutory rights, how these are applied within a particular

company, and whether the firm provides benefits which go beyond the minimum. Some

employers operate enhanced maternity leave. For example, where both partners are

employed by the NHS trust, if a woman having a child returns to work before the end

of her maternity leave, her partner can take the outstanding leave. Where leave is

enhanced there is always a written policy setting out the circumstances under which

this applies. Some companies set out the minimum they offer as a guide, and there is

flexibility to go beyond this depending on individual circumstances and line manager

discretion.

The law firm offers a maternity bonus designed to encourage staff to return to work

after the birth of a child. It is open to employees who have been with the firm for two

years. A bonus of 25 per cent of annual salary is paid (ten per cent at the beginning of

maternity leave, the rest on return) but has to be repaid if the person leaves within nine

months.

Paternity leave is commonly allowed, although it is not always included as part of an

explicit policy. For example, in the small engineering company it was assumed that it

was ‘the right thing to do’ to let a father have time off around the birth of a child.

Paternity leave varied in length from a few days to two weeks. It was more often paid

than not.

The case study firms varied in the extent to which policies explicitly addressed what

was acceptable or not in terms of employee absence. However, there was a general

trend towards providing more specific guidance in this area: for example, specifying the

number of days leave allowed in different circumstances and whether this was paid or

unpaid. This guidance was sometimes absolute, in that all employees could expect this

and nothing more. However, in several cases, this guidance was introduced to set

basic minimum standards and to ensure an element of consistency. Line managers are
allowed some discretion to be flexible in cases of specific need.

In the financial services organisation, written documents set out the range of types of

leave available for staff, the number of days allowed for each and whether these were

paid or unpaid. These were however, guidelines for managers to use and flexibility was

allowed at managerial discretion, depending on individual circumstances. This

organisation was also moving towards more flexible working, partly to provide a 24/7

service to customers and partly to meet the anticipated future demands of employees.

Rather than set out exactly what was allowed, a written document raises a series of

questions which both manager and the individual concerned need to consider. These

address, for example, whether the job can be covered more flexibly, implications for

cover and meeting targets, and what sort of flexible working best suits the

circumstances of the individual.

In the manufacturing company there were no formal policies for time off. Plant leaders

were expected to be compassionate and to exercise their discretion, taking into

account the needs of the business and the individual.

In a few case study organisations almost any type of leave is allowed, as long as

business needs continue to be met. Sometimes this is set out in a written document, in

others it is left to individual employees to ask and line managers to approve, perhaps
with support from HR. However, some were much more reticent about allowing a range

of types of leave. The food retailer had unsuccessfully tried out what they described as

‘more progressive’ types of leave and were as a consequence ‘dead set against them’.

In essence, a couple of head office staff did not return from career breaks and

sabbaticals so these types of leave were no longer available to any employees.

Overall, it is difficult to discern clear patterns in the type of leave allowed by different

types of case study organisation. Furthermore, especially where policies are not very

specific, there is considerable variation amongst line managers in what they will allow,

and among individual employees in what they feel able to ask for. In some

organisations the offering was based on what they felt competitors were making

available, and in others the offering was based on historic patterns of employee

demand (which, in turn, is affected by the occupational and gender composition of the

workforce).

Some case study employers had policies which set out parameters for how absence

should be managed. These did not so much address how absence should be covered as

how managers should deal with employees who are absent. Sickness absence, or

absence which were attributed to illness, were the main focus of these policies.

Policies varied in detail, but all set basic procedures for monitoring and minimising

sickness absence. There were a number of common themes:

The person of sick from work should phone in by a certain time; this varied

between an hour before they were due in work to an hour after starting time.

The person of sick from work should not just leave a message but speak to

someone, usually their line manager or someone in HR. If a message is left or the

person does not phone in personally, they are often called back to assess the nature

of the problem and how long they are likely to be off.

Return-to-work interviews, in most cases a ‘quick chat’, and sometimes completion

of a form. These allow managers to check that the individual is fit to return to
work, that they do not require additional support , and that the absence was

genuine.

Monitoring absence patterns, particularly amongst people who take a lot of odd

days, and where Mondays and Fridays are commonly taken.

Monitoring absence patterns to spot when someone is really struggling and not

well.

Talking to those who seem to be abusing the system or who are genuinely

struggling, to explore the problem and whether the company can provide any help

or support.

Keeping in touch with people who are on long-term sickness absence.

Return-to-work packages, for example, gradually building up to full hours, moving to

a different type of work, or rehabilitation.

The circumstances in which disciplinary action is necessary.

In larger companies, it seems that managers feel better able to deal with difficulties

related to sick leave, especially when persistent odd days are being taken and it is not

felt that someone is genuinely ill. Managers are given procedures and tools to use, and

can resort to help from HR and occupational health departments, where these exist.

However, in smaller firms managers often reported difficulties in talking to people about
the time they have off. The personal nature of relationships, in that everyone knows

everyone, often mean that it is more difficult to challenge employees. Indeed,

respondents in both the small firms participating in this study described the difficulties

they have in discussing personal issues with employees:

‘You have to be very careful what you say to people.’

Interviews with people in a range of positions in companies illustrated how individual

managers adopt various strategies, independently or in conjunction with HR, to address

sickness absence. Sometimes these strategies relate to individuals, for example,

sending someone who is persistently off for no obvious reason to see a company

doctor, or asking for a private sick note after each period of absence.

Sometimes high levels of sickness absence are attributable to working conditions and

organisational cultures. For example, in the financial call centre the working

environment had been radically altered. Targets based on the number of calls and call

turnaround, with the pressure of knowing how many calls were waiting had been

replaced. Operators are now assessed on the proportion of time they spend talking to

customers and their job has been incentivised through bonuses based on generating

leads for new business. The majority of those who were long-term sick have returned.

They had been informed about the changes and had an opportunity to discuss these

with managers, and allowed to return to work gradually.

Who receives these entitlements

Case study companies varied in the extent to which entitlements to various types of

time off were open to all, or restricted to certain groups. Statutory rights were available

to all. Extensions to these might be limited to employees who had been with a

company for one or two years, or to staff at certain grades.
Sometimes access to time off depended on the position of an employee, either
occupationally or locationally. For example, in the retail store, head office employees

were entitled to career breaks, sabbaticals, leave for voluntary work, etc., while in the

stores and depots employees and in some cases managers, were not. In the financial

institution, branch employees had slightly less access to flexible working patterns.

There is also an issue around line manager discretion. In most organisations line

managers have considerable autonomy in their decisions relating to absence. This can

be a problem; some line managers see employee absence for whatever reason as a real

issue, others within the same company are much more relaxed about it. HR

respondents generally felt that there was considerable consistency in decision making.

However, there was also some evidence of variations in behaviour towards different

employees within the case studies. If an employee is valued, more effort might be put

into accommodating their needs or wants. Being ‘valued’ has a range of meanings in

this context. For example, valued employees might be those who fit in well and are

good team members, who have been with the company for a long time, or who have

specific and important skills, are particularly good at their job and would be difficult to

replace.

Reasons for absence policies

There are a number of reasons for introducing absence policies, although some of these
refer equally to the reasons for allowing absence, whether there is a policy or not. The

fact that in most organisations absence policies do exist, illustrates how employee

absence is an issue for employers. These policies contribute towards or directly

influence the active management of absence, and they lead to consistency and

transparency within organisations.

One purpose of absence policies is to ensure compliance with legislation and that

employees and managers are aware of their basic rights, and those of the people they

manage. Policies also help to ensure that minimum standards are met and that

consistent decisions are made across a company. Consistency does not, however,

mean that all employees are treated exactly the same. Decisions about whether or not

someone should be allowed a particular type of absence do, however, need to be made

within a framework. This ensures that the same factors are taken into account in each

decision, in relation to an individual’s needs and circumstances, and the needs of the

job and company at that particular point in time.
The case studies included examples of policies being negotiated with and formally

accepted by trade unions: for example, in the financial institution. However, we were

not told of explicit pressures from unions which had led to the introduction of policies.

There is a potential for litigation or the threat of litigation leading to a need for absence

policies. This was rarely the only reason for developing a policy. However, the manager

of the small engineering firm did include aspects of absence policies in the written

contract given to all employees. He reported that employees did not hear or remember

verbal discussions of terms and conditions, and past experiences had led to him

providing these in writing. This was partly to protect the firm from possible

misunderstandings and the potential for legal action.

Managers and employees want to know what is acceptable and what is not. They want

more help and guidance, rather than being left totally on their own. They also do not
necessarily want a prescriptive list which removes any potential for flexibility. A

balance has to be maintained between flexibility to meet the needs of individuals, and

consistency of treatment.

Policies also mean that practices become more formalised and hence controllable. Once

the basic parameters are established, these provide a benchmark for monitoring. They

also provide basic standards of behaviour, so that both employers and employees have

something to fall back on when things go wrong.

Related to this, if it is more explicitly acceptable to have time off for emergencies, etc.,

and for more flexible working policies generally, absence becomes more known and

controllable. This avoids people feeling they have to ‘hide behind’ being ill. Several

respondents talked about building an atmosphere of trust and openness. This links

closely to organisational cultures and how senior managers wanted to develop and take

a business forward.

Absence policies are also part of creating a climate of goodwill and ‘give and take’,

making employees feel valued and committed to the organisation and prepared to put in

that extra bit of effort when needed. There was a general feeling that if employees are

allowed time off to deal with problems, particularly family and domestic problems, this

makes them more effective and productive. They are less likely to bring problems to
work with them, or to worry about what will happen if a domestic problem does arise.

It also means that annual leave can be used to relax and have a break. However, these

types of attitude are not held by all employers. For example, in the bank, there was

much talk of choice. People have a choice whether they work there, indeed, whether

they work or not, whether they have children and whether or how they are going to

combine work and home life.

The push towards greater work-life balance creates a further need for absence policies.

This is not only to formalise and provide guidelines, but also to establish that such

practices are an acceptable part of working life. Furthermore, there is some evidence

that employees are beginning to be more demanding, in terms of flexibility to have time

off for emergencies, and in other circumstances.

From one employee’s threat to resign, job share has emerged as a viable model for

planned leave in the merchant bank. A valued and successful employee wanted to work

reduced hours to spend more time with her new child. She indicated that she was

prepared to leave should this be refused. A job share arrangement with a friend

working for a competitor and with the same childcare responsibilities proved a

successful solution for the individuals and their line manager:

‘I thought I would lose Clare; I kept her and I gained Gayle. They are both

stars and the arrangement works for all of us.’

With their visible success, colleagues in the department have followed suit. One man

and seven women with caring responsibilities of differing types now work as job

sharers.

Providing employees with access to absence is seen as aiding recruitment, especially

where the labour market is very tight, through being seen as a ‘good employer’. This

access can also help tie in employees, especially if other firms are behind in what they

offer. Formalising these rights as part of company policy helps to ensure that they are

known about and established as available to all.

There are two main reasons for policies relating to sickness:

1. Concerns about the health and well-being of employees, whether these are related to

health and safety, or more generally ensuring a healthy workforce

2. Ensuring that sickness absence is not being exploited in some way.

The communication of policies

Policies relating to absence were communicated in different ways:

Written terms and conditions are given to employees and these include rights to

absence

Information is put on intranets

Policies are included in HR manuals

Policy and examples of practice are included in internal newspapers and other

written communications

HR run help-lines and answer general queries

There is general information and promotion of the view that work-life balance and

time off is important, without being specific about what is allowed.

The communication of policies and practice varies in effectiveness. For example, where

the messages are general, employees and managers are often still not sure what is

acceptable. In the financial institution, line managers reported information overload.
There are so many written policies that, although they are readily accessible, it is easier

to telephone HR to ask for specific advice. HR are trying to address this, for example,

through providing simpler information, but they still receive many requests for help.

Extent of and trends in absence

Trends in absence were difficult to explore fully. Many organisations collect little

information on absence. Furthermore, where line managers are given considerable

discretion in what they allow, there are rarely central records. Recording when an

employee has been allowed to leave early to sort out a domestic problem or take

emergency leave would create a considerable burden on a business.
Sickness absence is recorded for statutory reasons. However, even here it was often
difficult to obtain a real feel for the amount taken. In some organisations, better

monitoring of sick leave has led to more being reported and recorded, rather than there

being a real increase in the amount taken. This was felt to be the case in the financial

institution and law firm. Furthermore, some types of sick leave are related to the time

of year. Managers reported that sick leave had been particularly high this January, but

when questioned further, many said this happened every January and that 2001 was

not particularly different.

In the manufacturing company, absence data was only collected because it drove part

of the plant bonus scheme. It was not collected to aid monitoring and management of

absence.

There was some evidence of sick leave being reduced. For example, in the NHS trust,
targets had been set and this had led to levels of sickness absence being reduced. In

the call centre, there had been a significant reduction in the number on long-term sick

leave. A new manager had changed the culture and working environment to make it

more acceptable and less stressful. In the other call centre, planned initiatives to reduce

sickness absence included reducing the amount of paid sick leave, making payments

contingent on reports from occupational health specialists, holding return-to-work

interviews, and linking managers’ bonuses to attendance levels. The financial services

organisation was generally trying to address sickness absence by trying to make it less

acceptable to have a few days off for minor illness. For example, through promoting

the idea that if someone feels ill in the morning and better later on, it is right to come in

for the afternoon; or that if someone is ill on Thursday it is not automatically assumed

that they will not be back until Monday. It was too early to tell whether this was

having an impact.

There were several examples of occupational variations in sick leave. Those

occupations with the highest level of sick leave were often female dominated.

However, it is difficult to use this to suggest that women have more sick leave than

men



indeed, seniority seemed a more important factor. Professional occupations, for

example in the merchant bank and law firm, had very low levels of sick leave, and this

was similar for men and women. In the law firm, sick leave was highest amongst the

support staff, who were mostly women. In the call centre of the telecomms firm and

amongst shop floor workers in the food retailer, levels of sickness were much higher

than elsewhere in these companies.

Levels of sickness absence were most often reported to be ‘unacceptably’ high or

otherwise ‘a problem’ among employees with relatively low paid, repetitive and

unrewarding jobs, and those with low levels of autonomy. This might be attributable to

different work attitudes amongst these employees and poorer terms and conditions.

However, it appears that relatively little effort had been put into addressing the

underlying reasons for sick leave amongst these employees. It was rather seen as

something to be ‘policed’. In the financial services call centre, a new management style

and changes to the culture and working practices had helped to reduce sickness levels.

In some occupations, there was evidence (although this was more often based on

perception than hard data) that sick leave was higher amongst young men. It was

commented that ‘as soon as someone has a slight cold they are off’. There were some

negative comments about the work attitudes of young men, whether in manual or non-

manual jobs. Men were also more likely to take days off which appeared to be due to

heavy drinking.

Take-up of maternity leave depends on the age structure of a workforce and the

seniority and proportion of women. However, the type of work, and terms and

conditions also play a role. While, by definition, if a woman is pregnant she has to take

time off to have the baby, women in some organisations were less likely to take their

full entitlement. For example, professional women in the merchant bank often returned

early.

In other organisations, it is accepted that female employees will take enhanced

maternity leave. For example, in the NHS trust it was reported:

‘We want to be supportive and to be seen as a good employer, so we extend

provision where we can.’

Most case study organisations allow paternity leave, whether formally or informally. It

seems that paternity leave is usually taken as a matter of course, but there were no

data to illustrate the extent of take-up and trends in this because it was not routinely

measured or monitored.

We came across very few examples of parental leave in the case studies. Although the

legislation was just over a year old at the time of this study, it is still relatively little

known. Furthermore, many mothers to whom this applies have only recently returned

from maternity leave. Several respondents reported that women tended to use their

first year’s parental leave to extend maternity leave. There were virtually no examples

of men taking parental leave and there are a number of possible explanations. Parental

leave is unpaid and there was a general consensus amongst respondents that this

limited take-up. Men often take time off in other, usually paid, ways, for example,

through flexible working, or emergency leave to deal with family issues. In some

occupations or companies, work pressures are seen to prevent male employees taking

time off, except in a real emergency.

The extent of take-up of many other types of leave is very difficult to assess.

Employers rarely keep central information on these; indeed such absence is rarely

recorded at all. In general, although there appears to be a slightly upward trend in take-
up as taking time off for a range of reasons becomes more acceptable, there is a long

way to go until take-up is widespread. From talking to line managers in particular, there

is evidence to suggest that allowing time off, for example, for domestic emergencies, is

becoming more common. There are some circumstances in which this is less

acceptable, for example in the food retailer where numbers on the shop floor are

carefully planned to meet customer demand, resulting in constrained flexibility.

There is a range of reasons for relatively low levels of take-up. The majority of

employees do not want to be seen to be taking too much time off. Indeed, providing

access to some forms of absence seems to make people more loyal and aware of both

their right to have time off and the potential impact of this on colleagues. Furthermore,

the growth of flexible working practices means that employees are more able to cope

with aspects of non-work life without taking time off. For example, in the R&D

company respondents reported how being able to adjust starting and finishing times

and work at home on occasions meant they could wait in for repairs or deliveries

without taking time off work.

In some cases, especially in relation to non-statutory rights, employees and their

managers are not always aware of what is acceptable. This is an area where

organisational norms and expectations have yet to evolve.

For some groups of employees, the consequences of being absent prevent them taking

even the statutory minimum. For example, in the merchant bank levels of sickness

absence is low and largely self-regulating amongst producers (ie sales and trading) and

support staff. Absence has different consequences for each group. Producers deal with

what comes in each day, and this has to be done immediately. Rewards are

extraordinarily high and if they are absent, they might lose out on a valuable account.

Furthermore, their bonuses and internal and external profile, as well as client
relationships may be adversely affected. In contrast, if support staff are absent their

work is not covered, but is left to build up. They return early from sickness absence

and work long and irregular hours to prevent their workload from becoming

unmanageable.

Measurement and monitoring

As we have seen, data on levels and take-up of absence is very limited. Employers

have to record sick leave for statutory purposes, but even this is not always

consistently monitored. Maternity leave has to be recorded for pay reasons. In very

small companies, it is nearly always just known who has and who has not taken

various types of leave and, in particular, who seems to be exploiting the system.

Even where there are computerised personnel systems, not all these types of data are

consistently recorded, or recorded in a manner which makes them very usable.

Employers felt that keeping such records completely up to date on all types of absence

would be an administrative nightmare.

An increased emphasis on managing some types of absence and the need to ensure

that statutory requirements are met are leading to a need for more data and monitoring.

This is often illustrating, to the surprise of some, the inadequacies of current systems.

Problems included individual employees not recording their absence and not completing

a self-certificated medical note or providing a doctor’s note; lack of communication

between line managers and HR; where an absence report was completed, this

information was not being recorded, or even seen centrally.

Several case study employers were thinking through how they could best record and

use information. Nevertheless, it was rarely planned that all types of absence would be

recorded. There is a need to measure and monitor sickness absence for statutory

reasons, but also as part of overall policies to control and minimise this, and to pick up

problems and support employees where needed. Parental leave is an employee right.

Employers will need to record the amount of leave taken, to ensure that legislative

requirements are met but also so that, if an employee leaves, the necessary information
can be passed to their new employer.

It is unlikely that many other types of leave will be recorded, at least in a centralised

and easily accessible manner. There are a number of reasons for this. Some absence is

allowed at line manager discretion and, unless they introduce procedures to record this,

HR do not hear about it. Recording all types of absence would be a major burden, on

managers and companies more generally, and there is no clear reason why they should

need to do this. Another issue is where to draw the line: should all absence be recorded

or only those over a certain length?

Key points

From the data discussed here, the following key points should be highlighted:

A full range of leave of different types and duration is taken, but employers

consistently report that unplanned short-term sick leave is the most problematic for

day-to-day operations.

Routine data collection and its use in monitoring levels and patterns of absence, and

in managing absentees, is poor. Levels of sickness absence can vary dramatically

within an organisation. Commonly used average statistics obscure these variations

and thus limit the use of data in decision making about where to target remedial

interventions.

There is some evidence that less well-rewarded jobs are associated with more

unplanned sick leave, and also that high levels of unplanned sick leave can be

reduced.

Among different types of planned leave, take-up of parental leave is reported to

have been limited, and this is attributed to it being unpaid and to a relatively low

level of awareness. Take-up of flexible working options has been similarly limited;

this is attributed to employees’ fears that employers will question their commitment

and progression.

Access to more than the statutory minimum leave is commonly restricted to

selected groups of employees and may depend on factors that include the

individual’s grade and/or role, their line manager’s discretion, and/or their value to

the organisation.

It is more or less the norm for line managers to have overall responsibility for

managing absence, especially sickness absence, with possible support from HR and

occupational health specialists.

Managing absence

Introduction

Most employers have a set of preferred practices they adopt when deciding whether

and how to provide cover for absent employees. These procedures and the solutions

adopted are influenced by a range of circumstances. For example, the nature of the

work, the immediacy of client relationships, the nature of deadlines and the impact of a

backlog on the business, all influence practices. The exact solution adopted will depend

on the number of people absent at any point in time, the extent to which there is skill

substitutability, and business demands on the team, section or the company overall.
The cost of cover does not directly enter into the decision. The impact on a business if

absence is not covered is more important. For example, in the law firm, if there is work

which has to be done a temp will be brought in on the secretarial/admin side to cover

very short-term and unplanned absence. Cost is not the issue so much as ensuring

deadlines are met and clients are happy.

There are many similarities in how employers cope with planned and unplanned

absence. Unplanned absence creates more immediate pressures on managers to decide

if cover is needed, and what type. However, whether the absence is short- or long-term
(along with the business pressures outlined above) has the greatest impact on the type

of cover. Long-term absence offers different potential and pressures for cover

compared to short-term absence, and these are discussed below.

A range of different people might be involved in deciding whether cover is needed and

of what type. In some situations, for example, in professional roles allowing

considerable autonomy, especially for short -term planned absence, it is very much up

to an individual to manage their own workload. In the financial services back office

function there was a move towards self-managing teams. Decisions about the level of

cover needed were made jointly by team members. Most often, responsibility lay with

line or project managers, although HR would provide support and guidance as required.

Unplanned absence

In small companies there is rarely any option except to cope. Where specialist skills are

required, for example, marketing, IT or engineering as in the two small companies in

this study, it would be virt ually impossible to find external people with the specific

skills, and knowledge of the business to make it worthwhile bringing anyone in to cover

short-term, unplanned absence. The engineering employer did, however, have a

recently retired ex-employee who could be called on. Administrative tasks are more

easily covered by bringing in someone, in particular a temp, although this is a costly

option which was rarely taken up.

These small companies are extremely unlikely to have spare capacity. One respondent

reported they always have more business than they can really cope with. Unplanned

absence is covered by overtime, everyone working a bit harder, those absent putting in

extra time on their return, managers diverting their efforts from their own work and

working even longer hours than usual.

In larger companies, there are more resources and capacity to draw on, but covering

for unplanned absence is also often a juggling act. These companies do not have one

way of covering absence. A range of options is considered and the one adopted will

depend on factors such as:

The immediacy of the work to be covered and the nature of client relationships

How busy the team/department with the absence is at that particular time

How busy other teams/departments are

The overall level of absence

The degree to which there is skill transferability and flexibility between roles/jobs to

be covered, or specialist skills and knowledge are required.

Insofar as there is a decision making process around covering unplanned absence, the

first decision is whether or not the role can be left without cover. The next stage is to

look for capacity within the existing team, or other parts of the same department or

company. If the work has to be covered and there is no internal spare capacity, people

might then be brought in from outside.

In some jobs the work is project based, for example, in the R&D business, and

personnel function of the finance company. Unless a deadline is imminent, this can

usually be left for a few days without any major difficulties occurring. On their return

an individual might be able to make up the time, or re-plan their workload to ensure

things happen on time. Furthermore, in some roles, for example a personnel function,

there are a number of ‘nice to have done’ jobs. These get pushed to one side when

other more important activities emerge. Where project work involves a larger team, a

couple of days absence will usually not have too much impact. It is up to the project
manager to look at their project plan and decide whether tasks can be left for a while

or the work has to be reallocated amongst other team members.

As an example, the head secretary in the law firm plays a critical role in managing

absence. To cover unplanned absence she initially looks at whether there is any spare

capacity: for example, because some lawyers are away and not giving their secretaries

any work or are not engaged on work with an urgent deadline. The secretaries she

manages keep her informed about their workloads, so she knows whether and where

any spare capacity exists. People are generally trusted to say whether they can take on

extra work: there is no assumption that there is endless capacity to cope.

Similarly in the retail organisation, in-store HR managers systematically explore and

exhaust a series of different cover options. In the first instance, a decision is taken as

to whether colleagues can cover by absorbing priority tasks. The circumstances in

which this option is feasible are very limited; it is usually only possible when business

is slack. Absence from certain business-critical positions such as till operation will

always be covered. The next option is to bring in employees from their scheduled rest

periods to work overtime:

‘I look at the schedule to see who’s off. I might know that someone who is

contracted to work twenty hours wants to work more that week so I would

ring them first.’

This is the preferred cover; however, since overtime is the routine means by which

basic staffing levels are achieved, it may not yield a sufficient number of employees to

also cover for absence. In this instance the next option is to explore internal moves

from elsewhere in the store:

‘I might know they are bored and looking for a change.’

If that fails, the final option to cover unplanned absence is to formally reallocate work

between the remaining employees and managers.

Activities which involve regular contact with customers or clients or which are

essential to provide a proper service have to be covered. For example, call centres need

sufficient staff to cater with the usual number of calls, small retail units need the

number of staff to meet health and safety requirements for opening, large stores need

sufficient staff to keep the tills operating and shelves stocked, the merchant bank will

lose business to others if prospective (and existing) clients do not receive the service

they expect, back office activities have to operate at a level to ensure that at least the

essential activities occur, and school classes cannot be left unsupervised.

There is nearly always a preference for cover to be within the same team or

department. Close colleagues will know the work, procedures, client needs, etc. Where

the type of work allows, departmental managers often encourage skill flexibility, for

example, in the financial back office function. In this function there are a number of

self-managing teams, and members will arrange cover amongst themselves. If there are

insufficient members of a team present to ensure the work is done, the department

manager will allocate members of other teams to help out.

In large companies with an internal labour market, it is often the case that employees

have worked in several different areas. This means that they have a range of expertise

and knowledge which can be utilised in covering absence. In the financial institution, a
number of people had worked in the complaints department or had experience of

dealing with complaints within their own job. If necessary these people could be used

to cover absence in the complaints department. In the R&D business, the majority of

employees have an engineering and technical background. Many have similar basic

skills and can be moved between a range of functions. Until recently, unit and project

managers were able to informally call on people with the relevant skills to provide cover

as long as they were not too busy, or working on a priority project. This has now been

more formalised.

The nature of the work, and relationships with clients in the merchant bank means that

absence has to be covered within a team, by those who know the nature of the

business. Each account has a main and back-up account holder, and it is normally the

case that at least one will be present. Personal performance is very important in this

business and other team members will be keen to pick up new accounts which come

in. If support staff are absent, it is common for their work to be left to build up, and

they will work extra hours on their return to catch up.

In the school, procedures for covering absence have evolved over time. For absence of

up to and including three days, internal cover is always organised. It is ensured that all

teaching staff have a 30 minute slot in their weekly timetable when they are available

for internal cover. Three members of staff do not have full teaching timetables and

have spare capacity which contributes to this ‘bank’ of internal cover.

In a few organisations, additional capacity has been established to cover for both

absence and peaks in the workload. For example, in the law firm most departments

have a small number of ‘float’ secretaries. These are fully trained in the systems and

procedures of the firm and can provide more effective cover than temps. Being a float

can also be a way into an established post. The call centre runs with five per cent
excess capacity. It is known that this sort of level is regularly needed to provide cover.

Some community-based services in the NHS are beginning to introduce innovative

sweep teams; a team of practitioners who are well trained in both routine and specialist

techniques. They cover for absence among practitioners from several teams within a

large geographical area. This is, however, the final option and only utilised when there

is no possibility of internal cover. The size of the sweep team varies depending on the

potential demand for cover: for example, it is expanded during school holidays and the

winter.

Where flexible hours are worked, it is often possible to cover for absence by ‘flexing’

hours. In the call centre, a number of employees are prepared to work extra or different

hours to cover for absence. The food retailer relies on a wide range of part-time and

flexible working patterns and can call on people to work longer or extra shifts if

necessary. The manufacturing plant uses overtime where possible to cover absence. If

absence levels are particularly high, managers will call for volunteers to work extra

shifts, in return for time off in lieu (TOIL).

Through allowing flexible working, employers are, perhaps unconsciously, introducing

an additional means of coping with absence. Flexible working hours is one way in

which individuals can minimise their own absence. For example, part of a day might be
required to deal with a domestic problem, be home for a delivery or repair, or to attend

a school event. Flexible working arrangements, including homeworking can minimise

absence for these types of reasons.

It is rarely the case that an external person will be brought in to cover an unplanned

absence, especially a short-term absence. There are a number of reasons for this. Many

jobs require skills and knowledge which are not readily available in the labour market,

or through an agency at very short notice. Or, if they are, it takes time to instruct a

person so that they understand a way an organisation or project works. For example, it

might be assumed that a range of call centre and back office tasks are relatively

straightforward. However, in the call centre all operators need a good understanding of

the company and the products it offers. It takes six months for an employee to become

fully competent in the task, and the knowledge is not something which a temp can pick

up quickly.

There were two main exceptions to this: teaching, and clerical and secretarial roles. In

the school, absences of more than three days are covered by a supply teacher, from a

list of supply teachers with whom the school has previously worked. Some supply

teachers have subject specialisms and can be used accordingly. Some can come into

the school at very short notice, others need several days warning. Some supply

teachers can deliver material in lessons they cover, others do no more than supervise

the class doing work set by the absent teacher. All supply teachers go through the

school induction procedures, as it is important they are exposed to the culture and

ethos of the school.

In relation to secretarial and clerical occupations, managers are often reluctant to bring

in a temp for short-term cover; they may not know the particular word processing or IT

systems or styles of presentation used. The law firm did use temps if levels of absence

were such that there was no spare internal capacity and there was work which had to

be done. There might, however, be some reallocation of tasks so that temps could pick

up the more basic activities and internal staff take those roles requiring company
specific knowledge and expertise. HR try to work with a few agencies so that they are

able to call on temps with previous experience in the firm. Temps are trained by a head

secretary, and using the same people makes the most of this investment. Any temp

who does not fit in or is unable to learn the systems is released. In the merchant bank,

knowledge of the business, its customs and customers is also critical in support roles,

and bringing in external cover is argued to be virtually impossible.

Organisations show considerable adaptability in coping with unplanned absence. There

was evidence of a range of more informal ways of covering (or hiding) absence. For

example, absence amongst professional staff in the law firm was much lower than

amongst support staff. This was partly attributed to commitment to the work.

However, there were also differences in the working practices between occupations.

Support staff have to be in the office and provide a service for the professional staff.

Their absence is, therefore, more noticeable. Professional staff might be able to

minimise absence through for example, working at home and working very long hours.

This provides a flexibility which could be seen as a way of covering for absence.

In the R&D business, most professional staff have remote access and are able to work

at home. Working in teams means that staff need to be in the office more often than

not. However, being able to work at home can reduce the extent to which absence is
taken. For example, one respondent had a heavy cold at the time of the interview and

had worked at home the previous day, rather than taking time off and to prevent the

illness developing further. Another employee was allowed to work at home to help him

cope with a range of domestic problems, including having a disabled child. This worked

reasonably well until the employee became ill himself and was unable to travel to the

office at all.

In some circumstances absence might be covered through less essential or immediate

activities being cancelled or postponed: for example, training and team briefings.

Planned absence

There are many similarities in the ways unplanned and planned absence is covered.
However, the crucial difference is that, by definition, planned absence is known about

in advance. This notice of absence is very important as it gives individuals or their

managers a chance to plan the type of cover needed. There was no evidence that a

particular amount of notice is needed. There is an interaction between the length of an

absence, the nature of the work and the immediacy of deadlines.
For short-term absence the types of cover used are very similar to those discussed in

relation to unplanned absence. Often the first response is to see whether cover is

needed at all or whether tasks can be covered within existing resources. One main

difference is that, because the absence is known about in advance, it might be possible

to bring work forward. An individual might be able to plan their workload in advance so

that, except in an emergency, nothing major has to dealt with while they are off work.

The finance director in a small business had recently taken two weeks paternity leave.

He had planned his workload in advance to ensure that immediate things had been

dealt with and others could wait for his return.

Annual leave is a planned absence to which everyone is now entitled. This is planned in

a number of ways. Individuals who are responsible for their own workload will ensure

that they do not take leave at a busy time or when deadlines are imminent, and that
work can be put on hold or that someone else picks it up in their absence. Project and

team managers will plan so that leave is staggered across a team and that the

necessary skill mix is available. The overall aim is to minimise disruption.

For longer-term planned absence, such as maternity leave, sabbaticals, career breaks,

and sick leave which becomes long-term, the same process is often gone through.

However, most cases of long-term absence require more permanent arrangements to be

made. It is rarely the case that this type of absence does not need covering, indeed the

lack of need for cover might suggest that a job or role is not needed. Possibilities for

covering with existing resources or using other internal resources are looked at first;

the need to bring in external resources remains a last resort.

A number of examples of cover were identified in the case studies. Most commonly a

post will be filled internally, with arrangements being made for the post vacated to be

covered as appropriate. This commonly provided a development opportunity for a more

junior member of staff, but could also be a secondment or horizontal move. There were

a number of examples of team leader posts being covered by someone on temporary

promotion.

In the R&D business, an employee had unique skills which were becoming increasingly

important to the business. It was decided to set up a new team which he would
manage and use as a means of providing others with these skills. He had a history of

health problems although he was reasonably well at this time. However, as time went

by he had a greater amount of time off. It was clear that he was in intense pain and it

became increasingly clear that he was unable to cope with the work. The unit manager

talked through options with him and it was decided that he would no longer manage

the team. Another person was due to manage a related team but was not ready to take

on the role at that time. She was already a project manager but had no line

management experience. This person took on the new role earlier than planned. The

unit manager spent a lot of time supporting her. Furthermore, over time many small

tasks emerged that the ill employee had been responsible for and were not being picked

up, these all had to be devolved to others.

Secretarial and admin posts are most frequently filled by an external person. The

longer-term nature of cover means that a person can more easily be trained than when

cover is needed for short -term and unplanned absence. Some employers use temps

while others prefer a fixed-term contract. There are pros and cons of both. Temps tend

to be more expensive due to agency fees and often show less loyalty to a company;

they might leave if a more attractive opportunity presents itself. Where a firm develops

a long-term relationship with an agency, some pre-sifting of candidates is an

advantage. Someone on a fixed-term contract is seen by some as more reliable and

likely to remain loyal throughout the contract.

In the law firm, if a secretary was on maternity leave, either a float or temp would be

used to cover, and hopefully remain in that post for the duration of the leave. The

financial service company would often recruit on a fixed-term contract, if internal cover

was not available.

In the R&D business, a financial manager was about to go on maternity leave. This

person was employed as a contractor due to recent headcount restrictions, and this

complicated the situation. The company is under no obligation to provide maternity

cover, they could just replace her. However, she is an extremely competent financial
manager and the unit manager wants to retain her skills, recruiting her permanently if

possible in the long run. Her admin assistant is very keen to cover for the maternity

leave and it has been decided to allow this. She has been shadowing the financial

manager since January. This means that the assistant will develop a range of new skills

which will be useful to her in the future, but also useful to the company. There is no

guarantee that she will be employed in a more responsible role at the end of this

maternity leave. However, business changes mean that there will be more demand for

financial skills in the future.

The cumulative impact

The study aimed to explore the cumulative effects of absence and, in particular, the
point at which planned absence or unplanned absence is viewed as ‘a problem’.

Absence, in particular ad hoc and unplanned absence can present challenges and

problems to organisations. However, there is no universally accepted point at which

planned absence and unplanned absence become a problem. Business-specific ‘rules of

thumb’ are used to signal the onset of operational difficulties. In the retail store, for

example, once levels of short-term absence reached three per cent, the ‘red light’ went

on. In a team of 12 professional project managers in the telecomms company, absence

of three of them (ie 25 per cent) whether planned or unplanned was only sustainable in

the short-term.

Many factors influence employers’ capacities to cope, and to cope with different levels

and types of absence in different circumstances. Factors that influence their tolerance

for absence include:

the nature of the work, in particular the immediacy of demand and relationships

with clients and customers

the extent to which work can easily be covered by other employees

how busy a team or department is

the attitudes of managers and the overall business culture.

In this regard, a relatively unimportant factor was the balance between planned and
unplanned absence. Unplanned absences do generally put immediate pressures on

business, and this results in their being perceived as placing greater strain on the

business. Also, planned absence is generally covered by arrangements which do not

exhaust internal capacities. Employers and managers recognise that high levels of

unplanned absence in combination with planned absence will, at some point, be

problematic; that this point cannot be specified in absolute terms, and will depend on

the business context in which the organisation is operating.

In respect of planned absence, some senior managers are concerned about the

cumulative effects of newer forms of planned leave, ie options to work more flexibly

than the dominant model of full-time, nine to five and beyond. These are their main

concerns. Firstly, there may be a critical mass of planned leave beyond which, without

additional resources and/or more creative cover options, services and performance are

not sustainable. In day-to-day practice, this translates into managers speaking in terms

of ‘a finite pot’ of these options, and encouraging ‘those who want it to come forward

as quickly as possible’. Secondly, there

may be business-critical positions from which

such leave is extremely high risk, making difficult both cover arrangements and

equitable treatment for post-holders. Thirdly, organisations are not addressing

colleagues’ and managers’ resentment towards those taking up these options. There is

an increasingly common stimulus to this resentment. More and more businesses and

services are under pressure to operate over extended hours. As an increasing

proportion of the workforce works reduced or atypical hours, their remaining colleagues

are required either to cover the extended hours) ie very early and late), or to not take

up flexibilities. Both cause resentment among remaining colleagues who feel they are

not being treated equitably with their colleagues and that organisations are not taking

responsibility for the consequences of their strategic decision-making.

Line managers

While high-level policies set the framework within which absence is managed, the role

of line managers in the process is critical. In Chapter 3 we discussed how line

managers generally have considerable discretion in the management of absence. In

some companies, there are specific policies setting out what is and what is not

allowed. However, it is common for line managers to be allowed to apply these

guidelines very flexibly. In the R&D business, although there has always been

considerable flexibility, there has recently been a major push to increase this. Managers

are encouraged, within the limits allowed by the work, to allow employees to work a

pattern which fits with their personal needs. For example, if someone always needs to

drop off and pick up their children from school, they might be allowed to start late and

finish early and make up some hours in the evening.
Different managers cope in varying ways and to different extents with the amount of

discretion allowed. In one organisation, HR were providing managers with tools to help

them work out whether a flexible working pattern suited the needs of an individual and

their role. In several other organisations, although all policies are written down and

easily accessible, HR reported that managers still phone up for simple guidance. There

was some evidence of information overload.

Managing absence was recognised as one of the more difficult issues line managers

have to deal with, and their performance varied widely, both within and between

organisations. The confidence, attitudes and background of individual managers also

play a role. For example, some managers are much more open-minded and flexible in

their approach. However, in a few companies the performance of line managers was

rarely well regarded. They were perceived as over-loaded, disinterested, unconfident

and lacking in appropriate skills, and unclear about their responsibilities. Their role in

managing absence was clearly not high on the agenda of some line managers.

A number of factors influence how managers cope. In the R&D business there has long

been provision for a range of flexible and supportive working practices. Managers

seemed used to working in this environment and well able to cope. They often adopted

enabling and involving approaches, talking to their team leaders and teams and

involving them in decisions. Indeed, once managers are used to the responsibility and

discretion allowed, it gives them greater scope and autonomy to introduce change and

be innovative or creative in the way things are done.

The overall culture of an organisation is very important in managers’ abilities to cope

with absence. This is illustrated by the example above. In organisations where HR plays

a supportive role and flexibility is accepted, managers seem much better able to cope
with absence. In other organisations, there is much less flexibility, both in terms of

managerial responsibility and working practices. It is in these types of organisations in

which absence is more likely to be seen as a problem and difficult to manage: for

example, the retail store.

Key points

The following key points should be taken from the preceding discussions:

Most organisations deploy more than one arrangement to cover absence. Once the

decision to cover is taken, a common sequence of options is explored. Prior to

bringing in external cover, options to cover internally are explored and exhausted.

Finding cover internally is the much preferred option.

In deciding whether to cover an absence, the business costs of not covering the

absence tend to be more influential than the direct costs of cover. Absence from

business-critical positions will be always covered.

In selecting how to cover a particular absence, important considerations are: the

duration of the absence; the total level of absence at the time; the extent of

possible substitution by remaining employees; and immediate and short-term

business priorities. The duration of the absence tends to be the most influential

factor. Immediate cover arrangements are changed if the absence continues beyond

two weeks.

Similar arrangements tend to be used to cover both unplanned absence and short -

term planned absence. These include: overtime; bringing employees in from rest;

use of previously nominated back-ups (double teaming); internal moves, and

drawing on internal pools of reserves (‘floats’, ‘banks’, ‘sweeps’).

Options for covering longer-term planned absence include: temporary promotions;

secondments; and delegation of specific responsibilities to remaining colleagues.

Bringing in cover from outside is usually confined to support (cf. operational or

strategic) positions. Employing temps and fixed-term contracts are the preferred

options and each brings distinctive advantages. To cover operational positions,
external consultants are sometimes used.

There is no universally agreed point at which absence cumulate to become ‘a

problem’. ‘Rules of thumb’ developed from experience over time are used to signal

operational problems. These are business-specific and the product of the interaction

of operational, managerial, and cultural factors.

Costs and benefits

Introduction

Absence almost always imposes costs on employers. However, none of our case

studies were able to quantify these precisely. While some costs are directly financial

(for example, salaries paid to absent employees who are not productive, or the cost of

employing temporary workers) others are less easily quantified (for example, the impact

on the morale of other employees, or additional management time involved in managing

absence). Employers know that absence costs; although, it is not important to them to

quantify the actual financial cost. Furthermore, employers recognise that there are

benefits to some absence, for example allowing employees access to time off for

personal and family reasons. These are even more difficult to quantify than the costs.
Employers vary in their attitudes towards absence. Some feel it is right to allow

employees time off for a wide range of reasons and can see benefits in doing this. They

offer a range of flexible working practices and aim for an environment of trust and

openness. These employers tend to see only sick leave as problematic and aim

proactively to manage and minimise this.

Other employers see all types of absence as a problem, whatever the reason. For

example, in the food retailer, it was felt that employees took advantage of rights to

time off. Some people had come to expect too much; others did not repay the

company in terms of loyalty: for example, they did not return after a career break or

sabbatical. These employers usually operated less flexibly in relation to work-life

balance and absence. They often had a range of working practices that were designed

to match the needs of the business and attract particular groups of employees, rather

than to promote more general flexibility, trust and reciprocity amongst employees.

This chapter discusses the costs and benefits of absence to employers.

The costs of absence

Some of the costs of absence are directly financial, in that additional expenditure is

required or income is lost; there is an impact on the bottom line. Other costs are more

subjective, but nevertheless important, for example, absence can impact on the

workload of managers and other colleagues and on employee morale. Both these types

of cost are considered in this section.

Quantifying the cost of absence

One of the aims of this study was to collect financial information on the cost of

absence to employers. A data sheet detailing the information needed to calculate the

cost of absence was left with each case study company (see Appendix D). Only two

employers were able to attribute any kind of financial cost to absence or provide the

data needed to calculate the cost. In neither case were these data comprehensive.

There are two main reasons for this: the availability of data and the willingness of

respondents to provide this. Furthermore, as the discussion throughout this chapter

illustrates, attributing costs to absence can be very difficult. For example, using

another person who is not familiar with the post to cover, costs in terms of the

additional salary, other staff costs and training. However, when this is used as a

development opportunity, at least some of the costs are repaid in the longer-term.

Availability of data

Some of these data do not exist, especially in the smaller organisations. In

particular, respondents found it difficult to provide information on indirect costs: for

example, replacement costs, management time taken in managing absence, and the

learning curve of new employees.

In some organisations, information on the level and type of absence is collected
centrally; in others these data are not collated in any way or data is only collected

on certain types of absence. While most employers were able to provide some data

on patterns and levels of sickness absence, very few had information on, for

example, paternity and emergency leave.

Where the data does exist, it is often held by different parts of the organisation, and

was difficult to co-ordinate. For example, staff in HR are able to provide information

on employee numbers and patterns of absence; however, they are unlikely to hold

data on salary and other costs.

In general, we found that even large employers with sophisticated HR systems and

personnel databases found it difficult to gather the data we asked for. Indeed, many

respondents warned us from the outset that they would find it difficult to provide most

of the data asked for.

Willingness to provide the data

Several employers were unwilling to provide cost data and their reasons included:

The amount of time and effort required. An initial willingness to help often waned,

especially when the extent to which different sources of data within an organisation

needed to be accessed was realised.

Some felt that the data was commercially sensitive, for example, the merchant

bank was sensitive about releasing any pay data in the light of a legal case on pay

and gender, which they subsequently lost.

Some of the data requested required making assumptions and estimates: for
example, learning curve costs, line manager and HR time. Respondents did not have

time to do this; were not prepared to make these assumptions or estimates; or did

not have the necessary background information and experience to do so.

Other respondents argued that there was not sufficient benefit to them in collating

the data and that there were other priorities on which their effort s would be better

expended.

These repeat other experiences attempting to cost absence.

In many cases we found employers were initially happy to provide the data, but

subsequently changed their minds. In most cases we feel we pushed the employer as

far as we reasonably could. The main respondent had already spent a considerable

amount of time being interviewed and facilitating interviews with others in the

company.

We obtained patchy data on costs. Not all employers were prepared or able to

complete a form; those who did were unable to provide all the data sought. In only one

case, the school, was sufficient data provided to enable cost calculations to be made.

The law firm provided some data on the two main staff groups, but insufficient for

cost calculations to be made.

The school was able to provide some basic data and this is included in the case

study write-up.

The financial sector firm said they would complete as much as they could, but

finally were only able to provide data on absence patterns. They did, however,

report that seeing the list of information was useful and had made them think about

data they might collect in the future.

Neither micro firm had time to complete the forms and the data asked for was not

available.

The manufacturing firm refused to provide data on the basis that it felt it would

derive no benefits from doing so.

The merchant bank felt that the data would be commercially sensitive.

Direct costs

The direct costs of absence are the salary and value of employee benefits which are

paid to an employee who is absent. Not all types of absence incur these costs, for

example, statutory maternity leave and unpaid emergency and parental leave.
All employers incur these direct costs, although in some cases it was reported that

employees might make up the time lost through working longer hours on their return.

For example, in the small engineering firm, employees might make up some or all of
sick leave by working unpaid overtime in subsequent weeks; one man had taken time

off during a spell of good weather to work on his patio, making up the time in the

evening. In many professional roles, for example, in the merchant bank, financial

institution and R&D company, employees had autonomy in managing their workload.

When absent, the work would simply be left for their return and an employee might

have to work longer hours to catch up.

Some employers add to maternity pay in some form. For example, the law firm paid a

bonus if an employee returned to work with the company. While on one hand this adds

to the cost of absence, employers make these payments for sound reasons. It is part of

being a good employer and is often argued to be returned in terms of employee loyalty

and people returning to work. Retaining employees is important, as the cost of

recruitment to replace people who leave and the associated development costs can be

considerable.

The manager of one small firm was able to report the direct wage cost of having an

employee off sick from work for a long period. This was a particular concern as the

employee was not actually ill, but found to be working elsewhere. Almost £2,000 was

paid in sick pay to this person, while the work still had to be done and was covered by

a family member of one of the partners.

Other direct costs include the costs of employee benefits: for example, car allowances,

private healthcare and holiday entitlement. Employers rarely reported these as costs of

absence and were even less likely to be able to provide costing data.

Indirect costs

Indirect costs include the cost of replacement workers: for example, bringing in

temporary workers or the movement of internal employees, overtime payments and the

time taken for an employee to learn about and become proficient in the post they are
covering. Sometimes these are, at least to some extent, offset by the absent employee

not receiving all or any of their normal pay. Furthermore, not all absence involves

replacement costs: in the examples given above, the absent employee catches up with

the work on their return.
Temporary agency staff are particularly expensive. However, where possible, the same

agencies and temps are used, and a pool of labour can be developed which knows how

a company operates. Several employers preferred to use fixed-term contracts for

longer-term cover, for example, the financial services company. This is less expensive

than using agency staff, as the going rate for a job is paid rather than agency fees.

Another indirect cost is the learning curve of an employee or temp new in post.

Although much cover is within a team, some cover can only be achieved by a

secondment, temporary promotion or bringing in someone from outside. This cover will

almost certainly involve a period during which the person is not fully productive, while

they become familiar with and learn the skills needed in a job. Covering absence can be

used as a development opportunity for another employee. This is less likely to be seen

as a cost to the business, as it provides a chance for someone to be trained and

assessed in a new post. Indeed, almost all employers identified this as the main benefit

of absence.

When the cover is ad hoc and short-term, indirect costs are relatively greater. For

example, a temp may not know how to use the systems in a company and the

replacement will not have the ‘tacit’ knowledge of the usual job holder. This was a

particular issue in the law firm, where the HR manager responsible for hiring temps

always tried to bring in those who had past experience in the firm and had already

proved themselves. In the merchant bank it was reported that the knowledge and skills

needed are so specialist, it is not possible to bring in temps on a short-term basis.

When longer-term cover is needed, a greater proportion of the cost of investing in a

replacement becoming proficient is covered, simply because the replacement is longer

in post and thus able to contribute productively. However, not all long-term absence is

easily covered. For example, in the law firm, a secretary had time off for surgery. She

and the partner she worked for had a long established working relationship. This was

disrupted by temporary cover and the partner had to do many things her secretary

normally took responsibility for.

Absence management costs

Management time

A key cost of absence is the amount of management time involved in arranging cover.

The main concerns expressed were in relation to long-term sick leave. Managers

reported spending considerable amounts of time monitoring what was happening in

particular cases; discussing these with HR and, where relevant, occupational health;

talking to the individual involved; thinking through strategies for cover, and which in

some cases were quite involved; training and supporting others in the role. Where the

individual had crucial skills or played a crucial role in the organisation, providing cover

in this situation was particularly time-consuming.
There were many examples in the case studies of managers devoting time to managing

employees who are absent. For example, in the R&D company, an employee had been

allowed to work at home to care for a child with learning difficulties. This employee
developed health difficulties requiring surgery and became housebound. Considerable

management time was involved in identifying work which he could do at home and in

deciding how to incorporate him back into the team on his return. In another example,

an employee with unique skills who was setting up a new team became ill and

increasingly unable to cope with work. His line manager had to spend time ensuring

that the new team was established and that others were trained in the appropriate

skills. He also had to support the person who was ill, as well as the relatively

inexperienced employee who was taking over as team leader.

Short-term sick leave presents a challenge to managers, although in different

organisations it is managed differently. For example, the head secretary in a

department of the law firm spent a considerable amount of time juggling to arrange

short-term cover. She had to keep up-to-date with the workloads within the

department, know the working practices and demands of different individuals and, as

far as possible, cater for these requirements. She also had to train any temporary staff

brought in. In the financial institution back office, some teams were self-managing and

cover was arranged within a team. However, if absence reached a level such that a

team could not provide the basic service required, managers did become involved.

It is unplanned leave, and some types of long-term sick leave which provide the
greatest challenges for managers. This is partly related to the ad hoc and often

uncertain nature of such absence. Leave which can be planned ahead (for example,

maternity, parental and paternity leave, and sabbaticals) seem to provide less of a

problem for managers. Cover still has to be arranged, although in some cases the

individuals concerned plan their workload accordingly. This is particularly the case for

parental and paternity leave and in companies where employees are in professional

occupations and/or have considerable autonomy in their work. The general consensus

amongst most managers was that, if known about in advance, cover could relatively

easily be arranged.

In the two small firms, absence had a more direct cost in terms of senior management

time. Both respondents, who were also directors or co-owners of the firms involved,

would often be involved in covering for short-term and ad hoc absence. This meant

that their main tasks, which were important in developing the business and bringing in

work had to be squeezed in, and were often done outside normal working hours.

HR time

Managing absence has an impact on HR. In some respects this is just accepted as part

of their role. For example, in the financial institution and law firm, work-life balance and

flexible working were seen as a key part of the working environment. Policies for these

have to be developed and supported. Statutory rights, for example, in relation to

maternity, paternity and parental leave also require policies. These tasks and activities

are all part of the day-to-day role of HR departments. They are not seen as a cost but

part of providing an attractive working environment and treating employees properly.
However, in some organisations, rights to leave and employee absence were seen as

problematic. Such organisations tended to have large female and relatively low-skilled

workforces and less respectful relationships between employer and employees. In the

retail employer for example, managers tended to view unplanned sick leave as not

genuine; it’s ‘them swinging the lead’, ‘feeling like a day off’, ‘as though the work is
here for them to do as and when they feel like it ‘, and ‘then they’ve got the nerve to

expect it to be paid for as well’.

The most costly type of absence in terms of HR time is sick leave. All organisations

were proactively managing sick leave, aiming to minimise the amount and spot patterns

as they emerged. High levels of absence due to illness often result from poor working

environments and management cultures, or they can be the result of poor working

attitudes amongst a small number of employees. Picking up on and correcting these

causal factors can involve a lot of HR time, which is not always regarded as the most

productive use of this resource. However, if employees are taking unnecessary time

off, this does impact on both the workload and morale of their colleagues and needs to

be addressed. Furthermore, when an employee is seriously ill, dealing with the situation

sensitively is felt to yield returns in terms of overall employee loyalty and employer

reputation.

Impact on other staff

Much cover for absence is provided internally and often within teams. This can put

pressure on other staff. The type of leave and context within which it is taken are,

however, important in influencing how this pressure is perceived. For example, all

employees are entitled to annual leave and everyone shares in covering for this.

Planned absence is often accepted as part of the normal working relationship. There is

some anecdotal evidence of a negative reaction from employees who do not have

children towards those who do. Our case studies provided little evidence of this and
there are a number of possible reasons for this. In many cases access to time off was

not limited to or really weighted towards those with family responsibilities. In the

majority of cases, flexibility to take time off to deal with family and domestic issues is

not begrudged. Many employees with such responsibilities are seen to be making a full

contribution while they are at work, and will often make up at least some of the hours

taken.
Again, it is sick leave which presents the greatest challenge. The impact of short-term

sick leave will depend on how busy a particular team is and whether cover can be

brought in from elsewhere. It is persistent ad hoc and long-term sick leave which

usually puts the greatest pressures on other employees. This is partly due to the ad hoc

nature of such leave and the uncertainty surrounding it. Managers have to ensure the

work is covered in some way and it can be difficult to bring in extra cover. However, in

these circumstances other employees can feel that their colleague is being given

preferential treatment and this adds to the pressures of having to cover. Several

examples were given of people who were off work with depression. Colleagues often

did not fully understand and were suspicious of what was happening. Furthermore,

once someone has been absent for a period of time, others start resenting having to

cover and want to know what will happen in the longer-term. Frustrations and anxieties

include the form and terms of rewards for extra efforts and the efforts of managers and

HR to re-balance resourcing.

Often it is not so much specific absence, but rather the overall level of absence which

impacts on other employees. It was difficult to identify precise levels of absence which
create problems, as this depends on, for example, the size of a team, the immediacy of

the work and how busy they are at a particular time. However, once absence levels

reach a point at which those left cannot cope with the work, and particularly if this

persists for a period of time, the impact on other employees becomes more severe.

This might lead to higher levels of absence amongst those remaining. The cost of not

providing sufficient cover can be greater than that of providing cover.

Where absence is being abused, or perceived to be abused, this has an impact on the

morale and commitment of other employees. Several respondents reported that most

people know who is ‘taking the Mickey’ and get fed up with this, especially if

managers are not seen to be addressing the issue. In some cases, this leads to higher

levels of absence, for example, due to reactions from other employees of the nature:

‘If they can be off, why shouldn’t I?’

Cost to individuals

Costs to individuals can be high. Sickness absence is widely interpreted as expressing

different problems; some related to genuine health issues and some related to

difficulties with work roles, management, organisation and culture. The costs of both

interpretations can be high. Irrespective of their performance and results when at work,

both can lead to individuals being valued less than their peers and manager.

Each is also associated with specific costs. Discrete episodes of sick leave for

identifiable and certifiable reasons are accepted as ‘part of the deal that goes with

employing people’. On the other hand, employees who take leave for reasons which are
not concrete or which are difficult to diagnose, particularly those which are related to

mental health problems, and especially if they are repeated, tend to be regarded as

malingering, uncommitted, ‘not one of us’, and not strong candidates for promotion.

Addressing and resolving work-related difficulties implies a responsibility on the part of

managers and employers. Line managers’ performance management capabilities are not

well developed; this was a common perception among participants. Thus work-related

difficulties of those who have taken sick leave may be neglected rather than faced by

managers. Thus individuals might be left with their difficulties which may entrench and

worsen with costly longer-term consequences for the well-being and work-life balance

of the individual, and the organisation.

There is some evidence of a cost to women in taking maternity leave, emergency and

parental leave. For example, women with children reported progression being slower for

them and this had an impact on their earnings. Although it was often acknowledged

that men also may have a caring role, women are still the primary carers. The fact of

them having to take time off or work fewer hours still holds them back, in terms of

their being perceived as less committed and ‘promotable’, irrespective of their

performance. In banking, for example, male employees equate taking maternity leave

with ‘having the softer option’ at work. Of even more concern is the following: these

perceptions are not improved when female employees seek to reduce conflict between

work and domestic responsibilities by securing a formal arrangement to work atypical

hours.

In organisations where rewards, particularly bonuses, are largely based on individual

performance, absence has a negative impact on remuneration. For example, in the
merchant bank absence could have an impact on personal performance. If absence was

long-term a person could lose their visibility and reputation amongst clients, possibly

having a significant impact on career progression and opportunities. This applied to

most types of absence and, for example, women were reported to return early from

maternity leave to minimise the impact of not being there.

Not all absence impacts negatively on an individual. For example, sabbaticals and time

off for study were seen by most case study employers as part of good

employee/employer relationships. Paternity leave and occasional emergency leave are

increasingly accepted as a ‘proper’ right. Occasional planned leave rarely disadvantages

an employee, and for the majority this is the extent of their absence.

Lost work or poor quality service

In most organisations it was rarely, if ever, reported that absence led to lost work or

poorer quality service. However, the potential for this was recognised. In the financial

institution call centre, it was reported that possibly once a year calls were left

unanswered due to there being insufficient levels of cover. This might lead to lost

business, especially as call centre staff are involved in generating leads for new

business. More often it leads to dissatisfied customers and greater pressures on staff.
There were some particular examples of absence being more likely to impact on

business performance. For example, in the two small businesses the directors and co-

owners often had to cover, diverting their energies from more strategic issues. In the

merchant bank it was reported that there is an opportunity cost to absence:

‘We know our competitors are getting what we could be having.’

In the school, the disruptive impact of absence was particularly clear. Absence disrupts

continuity for pupils and can impact negatively on pupil performance. Teachers reported

how it can take time to settle their class into their own way of doing things. Once this

is disrupted, even by relatively short periods of cover by another teacher, it can take

time to re-establish. This can result in some pupils ‘treading water’ and losing valuable

time. Performance of some pupils, or even whole classes, can be adversely affected by

extended periods of cover. Several examples were quoted of classes where teachers

were on maternity leave, performing less well in SATS and GCSEs. What is particularly

interesting is that these disruptions happen even when the person covering is very

competent.

In the manufacturing plant, if a shift is short-staffed, or without a full compliment of

skills, there is an increased likelihood of product quality being compromised.

In some organisations, it is possible to renegotiate deadlines and delay project work.

For example, in the research and development business, the majority of work is for

other parts of the same company. Long-term relationships between individuals and the

financial arrangements mean that it is usually possible to renegotiate on a deadline if

something is delayed by absence. However, this business is moving towards providing

a service for external customers and it is not clear that this flexibility will persist.

Absence could, therefore, have a greater impact on the business in the future.

In most circumstances, managers do what they can to ensure that absence does not

disrupt activities to the extent that performance targets and deadlines are missed. This

might involve additional expenditure, for example, to pay for temporary staff or
overtime, but the opportunity cost in terms of customer dissatisfaction is greater. For

example, in the law firm, as long as a completion was made on time, it was acceptable

to pay for temps to provide cover.

The benefits of absence

Many respondents found it difficult to identify benefits of absence and were initially

surprised by being asked about these. Nevertheless, some positive aspects of absence

do emerge, both from responses to a direct question and through our analysis of the

data.

Valuing employees

A major benefit of absence is the positive message that entitlement to take leave for a
range of reasons gives to employees. The HR manager in the NHS trust talked about

the reciprocity of the relationship between employer and employees:

‘If we treat the relationship between the employee and the employer as a

transaction and do our bit, then the organisation benefits from the individual.

And at the individual level, for example, they are more willing to take

forward work based projects so that we all benefit.’

The vast majority of respondents felt that providing employees with the ability to take

time off to deal with non-work issues without being penalised, created a good working

environment. In several organisations these opportunities to take leave were not new,

but their availability was often being re-emphasised. For example, in the financial

institution and R&D business new initiatives were reinforcing rights to flexible working

and time off.

While a few will abuse these rights, most employees value them. Rights make them

loyal to an employer and contribute to both retention and productivity. For example, in

the R&D company an employee stayed although he could have gone to a better paid

job elsewhere. His wife had been seriously ill and he had been allowed time off to care

for her. He had initially expected to lose his job over this, and felt that he would have

been unlikely to have received the same support from another company.

Although maternity leave is a statutory right, our case studies provided examples of

women being grateful and feeling valued because they had been allowed to return. For

example, one HR manager felt positive about the way she was ‘allowed back’ by the

company. Such gratefulness for minimum rights was also found amongst employees in

a study of family-friendly working practices (Bevan et al., 1999).

Our case studies include examples of managers feeling that employees were coming to

expect too much and take advantage of the access to time off: for example, in the

retail company. However, in the majority of cases, it was felt that employees should be

allowed time off as a matter of course, and that employees generally valued and

reacted positively to this.

There were many examples in our case studies where employees who were long-term

sick were being sensitively dealt with by their employer. People with long-term health

problems or a disability had the work adjusted to meet their needs, whether in terms of

working hours, or homeworking. We were not given any examples of employees simply

being fired because they were ill and unable to work. There were examples of
managers spending considerable time and effort to ensure that everything was done to

accommodate a person and that if they had to leave, they were given a fair deal.

Although these cases were often time consuming and problematic for managers,

several reported that this treatment of people sent a positive message about the

company and its approach to employees.

Allowing employees time off, or the ability to work flexibly and make up the time later,

to deal with domestic and personal problems, was felt to lead to a number of benefits.

A number of managers reported how sending someone home to sort things out meant

that they came back more relaxed, and able to concentrate on their work and be

productive. Furthermore, access to this type of time off not only increased loyalty

amongst employees who had used it; others valued the potential to take time if

needed.

Development opportunities

There was a range of examples of absence cover providing development opportunities

for other employees. This was particularly likely for long-term, often planned absence,

and where the role was specialist or had project or line management responsibilities. In

some companies, using absence cover for developing other employees was a conscious

decision; in others it happened by coincidence or accident.
In the manufacturing company, redeployment of workers between shifts and product

lines occasionally gave opportunities for workers to practice different skills. For

example, a worker may mostly operate equipment but only rarely be called on to

maintain it. A change of role may allow him to practice his maintenance skills more

than normally. Redeployment is also seen as useful way of giving workers experience

of different product lines, increasing both their skills and their product awareness.

There were several examples of line manager and team leader roles being covered by

more junior employees, often providing them with opportunities to take more

responsibility and show that they can perform at a higher level. For example, in the

financial institution the role of a team leader on long-term sickness absence was

covered by someone from elsewhere in the company on temporary promotion. In the

R&D company, a financial manager was about to go on maternity leave. Managers had

anticipated bringing in external cover, but her administrative assistant was keen to take

on the role. After careful consideration this was allowed and the assistant has been

shadowing the work of the financial manager for several months. There is likely to be a

greater demand for financial skills in this business in the future, and giving someone the

experience and skills through covering a post will be a benefit in the longer-term. In the

merchant bank, a less experienced member of staff might gain opportunities to become

an account holder while someone is absent:

‘They have a chance to show what they can do and so to take responsibility

for an account or to work towards being given a similar account.’

The advantage of this type of cover is that employees have an opportunity to show

they can take responsibility without any commitment on the behalf of an employer to

promote substantively. However, if a person does prove himself or herself, he/she is

likely to progress within an organisation.

Time off for study or professional development is also considered to reap a number of

benefits. For example, in the school it was argued that off-site training gives teachers
an opportunity to update their skills, take on new ideas and recharge their batteries.

Such opportunities are also motivational and demonstrate that individuals are valued by

the school. In the financial institution and telecomms company, examples were given of

people who were allowed time off each week to attend a course, often unrelated to

work. This was felt to benefit both the individual and the organisation and, in

particular, made an employee feel valued by and loyal to their employer.

Changing the work

Although not common, there were some examples of employee absence leading to

managers rethinking the organisation and allocation of work within a team or

department. This often led to wider, sometimes unanticipated benefits to the business.
In the financial call centre the high level of long-term sickness absence was one reason

for a new manager changing working practices. These changes significantly reduced

the number of people on long-term sick leave. They also led to wider benefits, for

example, the call centre became a profit rather than cost centre, and new business was

generated for the company.

In other companies, it was the illness of a particular individual and efforts to

accommodate this, which had led to some reorganisation of work. For example, in the

financial institution one employee developed MS. To avoid high levels of absence and
enable her to continue working, activities were reallocated within the team. She

worked in the complaints department and all cases which were not satisfactorily

resolved were given to her, rather than left with the person who had seen them

through from the original complaint. This led to unexpected benefits in that through a

different approach to reviewing each complaint, some were resolved without going to

the ombudsman.

Key points

The following key points have emerged from the preceding discussions:

Employers’ views about absence vary. Almost all consider sick leave to be

undesirable, and it is most problematic when it is unplanned and repeated. Some
view planned leave as legitimate and beneficial to the individual, and thus to the

organisation. Others view planned leave as irritating and a further strain.

Data relating to the financial costs of absence are variable in their quality and

completeness and are difficult to access. Estimating indirect costs was particularly

challenging for participants.

Direct financial costs include the salary and benefits paid to the absentee, where

appropriate; enhancements to minimum payments (eg for maternity leave), where

paid; and costs of employee benefits such as car allowances and healthcare.

Indirect financial costs include the costs of replacements eg temps, or of internal

moves; overtime payments; and the time taken for the replacement to learn the

new role and become productive.

As well as financial costs, absence may result in opportunity costs; diminished
service and product quality; lost custom and reputation; and may reduce employee

morale and commitment. Different stakeholder groups experience additional costs.

Non-financial costs for managers are highest for unplanned leave and for short - and

long-term sickness absence, and particularly the latter. These require more time

spent monitoring the status quo; thinking through and arranging cover; accessing

and consulting with HR and occupational health specialists; and managing the

absentee, and the reactions of other team members to their absence, to cover

arrangements and to the absentee’s return -to-work.

Non-financial costs for employees include being perceived as struggling,

uncommitted, a problem, not playing a full part, not ‘one of us’, not up to the job

and not fit for promotion.

HR practitioners see managing absence and enabling employees to work

productively, flexibly and healthily as integral to their role, rather than a problem.

The following are considered to be difficult: negotiating with senior managers about

the entitlements and the needs of employees, and supporting line managers to

manage absence, people and problems effectively.

The benefits of providing leave include: employees feeling valued; development

opportunities being created; and positive changes to the ways in which jobs are
designed and work is organised and done.

Sanctioning employees’ leave is a means by which employers can demonstrate that

they value their employees. Employees feel that since their contribution is

recognised, they are given permission to come in late from an emergency medical

appointment. They feel that their contributions over a period of time have reaped

rewards for the company, therefore they are enabled to take a career break. Women

feel that supporting their maternity leave and sensitively adjusting working

arrangements on their return shows that their inputs are valued and that the

organisation is interested in them as a person.

Conclusions

This study has been conducted against the backcloth of a growing national debate

about working time, work-life balance and the role of employers in accommodating the

needs of employees. As a combination of new employment rights and emerging

employer practice allows more employees time off work to help them to juggle work

and family life, the more employers will need to manage the consequences of absence
in the workplace.
In this final chapter we will draw out some of the main conclusions from the findings of

the case study research for employers, employees and for policy-makers.

How worried are employers about absence?

All the employers participating in the study saw employees as a critical resource in

meeting their business goals. Indeed each was able to illustrate how this was so.
All felt that recruitment and retention was their biggest staffing problem. Most were

concerned that their inability to recruit into key posts might act as a serious

impediment to their ability to meet their wider business goals of delivering goods and

services to customers and clients. Similarly, excessive employee turnover in a buoyant
labour market was seen as a high risk to many of the organisations.

In the scheme of things, however, absence was frequently not prominent among the

issues which were concerning employers. This is not to downplay the periodic

problems which absence caused them. When absence precipitated short-term crises, or

exacerbated existing staff shortage problems, then they became an issue of serious

concern. At the time of the study, it is important to emphasise that these instances

were relatively rare occurrences in most of the participating organisations.

While the awareness and knowledge among employers of the new leave entitlements

for employees was still quite low, we found that almost all were fully supportive of the

principles underpinning their introduction, and mostly unconcerned about the

implications for them.

Which kinds of absence cause most problems?

A reasonably consistent message from the case study employers was that the

unpredictability of absence was the biggest problem. More specifically, unplanned

absences (usually sickness), which occurred at short notice, were those which could

give rise to the most significant disruption and costs.
While planned absence can also cause resourcing problems, especially in smaller

organisations, most of the employers had well-established strategies for covering

predictable absence. These derived from their existing approaches to managing annual

leave, maternity leave, jury service etc.

How effectively do employers manage absence?

Practice here is variable. The measurement and monitoring of absence is generally poor.

Aside from rudimentary record-keeping for annual leave, SSP and maternity pay

purposes, most of the participating organisations have no reliable data on:

Patterns and trends in absence

High-risk groups

Take-up of new or existing leave entitlements

Costs associated with absence.

It might be argued that this situation reflects the importance that most employers

attach to absence. If absence were a major impediment to business success then it

might reasonably be expected that employers would be more diligent about collating

data on it.

A key focus of the study has been the way employers cover absence. Here, most

employers seem to have practical and effective ways of organising either internal or

external cover in most circumstances. Again, unplanned absence causes most problems

— though even in these circumstances, employers’ existing approaches to organising

cover appear flexible enough to cope with most situations. We found no evidence of

employers having to develop new ways of managing absence cover as a result of new

leave entitlements, for example.

What differentiates those who cope well from those who do not?

For the most part, the majority of the participating employers coped well with the full

range of absence which they were experiencing. However, it is true to say that some

appeared more enlightened and successful than others. Some of the characteristics of

organisations which seemed to manage absence successfully, included:
1. A climate of trust and mutuality. Where employees were trusted both by the

employer and line manager (and where employees returned this trust) we found that

the delivery of goods and services could be continued with little disruption if

absence occurred. This was due largely to a willingness to work flexibly. Employers

commonly reported that flexibility shown to the employee by the employer was

frequently repaid several times over through willingness to exert extra effort (to
meet deadlines etc.) and through increased staff loyalty and commitment. This trust

and mutuality existed not just between employer and employee, but also between

employees. We found that a willingness to cover for each other



sanctioned by

the employer



not only made organising cover easier, but also yielded benefits in

terms of development opportunities.

2. A positive outlook among line managers. If line managers ‘buy-in’ to the view that

absence which is not related to sickness can help improve work-life balance,

improve morale, reduce anxiety and help recruitment and retention, then we found

that absence can be managed effectively and with minimal disruption. If line

managers saw absence purely as a cost to the business and as an impediment, then

absence could become a contentious issue which made organising cover effectively

more difficult.

3. Internal skill substitution. Those organisations with a readily transferable supply of

skills were better able to cope with absence than those where internal skill

shortages existed. Some organisations deliberately over-resourced to cope with any

need for internal cover. Others encouraged employees to be on-call for absence

cover for a certain part of their working time. In some organisations, especially

where staff numbers were small or where skill substitution was more difficult,

absence cover was often more of a problem and, at the very least, external cover

would need to be considered.

For many of the employers who appeared relatively untroubled by the need to manage

absence, their need to work flexibly to meet ever-changing market and competitive
demands seemed to be readily transferable to their approaches to managing absence

cover.

How would they cope if there was a high take-up of the new leave

entitlements?

For a proportion of employers this is unlikely to be a concern. For example, there are

those where take-up is unlikely to increase (such as the merchant bank) because staff

are too busy, or because they feel too much time off will affect their visibility and

progression prospects. Other employees will not take-up new leave entitlements

because they cannot afford to. Those entitlements which are unpaid are less likely to

encourage take-up on the basis of the evidence collected among employees in the case

study organisations.
Where take-up does increase, it seems likely that absence which is planned and

predictable by the employer are likely to cause far fewer problems than unplanned

absence. It also seems likely that planned absence with clear safeguards for employers

(such as those which apply to parental leave) provides sufficient controls to avoid extra

take-up of new leave entitlements causing extra problems to most employers.

Increased unplanned absence, conversely, has the potential to be very disruptive. Aside

from the difficulty of organising cover which they cause, they can have a negative

impact on the willingness of managers to support the principles underpinning

entitlement to planned absence.

A key message for policy-makers, therefore, is that employers appear to derive

considerable comfort from predictability and from safeguards in the application of leave

entitlements which recognise the importance of business needs.

Appendix A: Case studies

Financial Services case study

Business background

This is a major financial institution employing over 10,000 people in retail branches and

administrative/head office sites. They provide a range of banking, savings and

mortgage products, mostly to private individuals. They operate in a competitive market,

but are a major player and hence occupy a relatively stable position.

Work organisation

A network of retail branches is supported by two administrative centres, one of which
is the head office. Most central functions are located at the head office site. Both sites

provide back office services, one focusing on mortgage activities and the other on

savings and banking, and each has a call centre. The personnel function is split

between the two sites.
Different departments are structured to suit the work they carry out. However, there is

an overall emphasis on teamworking and people supporting each other.

A project group is currently looking at different ways of working. For example, they are

looking at the potential for hot-desking, but this is hampered because people want their

own space. Homeworking also presents a challenge to managers, and for some jobs

raises issues over the confidentiality of information.

Increased mechanisation is occurring and continuous improvement is stressed across

the business.

There are a wide range of measures assessing company performance. For example, in

the complaints department they have to reply to a complaint within seven days. Within

each department, progress is monitored on performance targets.

Back office function

This department provides back office support to the banking services in retail branches.

There are 180 staff, organised in teams and they are moving towards self-managed
teams. This works well for some teams but less so for others, in which case the team

leader is more involved on a day-to-day basis. There has to be 9.00am to 5.00pm

cover, but flexible working is encouraged within teams. The team members have to

agree amongst themselves how they will organise cover.
The departmental manager is responsible for making sure adequate productivity

measures are in place, that the department runs smoothly on a day-to-day basis, and

for personnel and budgets issues. Team leaders are responsible for measuring

productivity, challenging and improving existing procedures, and for personnel. Each

team also has a supervisor who is effectively the deputy team leader. Their role is to

ensure the work is happening. Team members have to meet their business targets and

deadlines. Development is also important and each employee is allowed one week

personal development a year.

The department has changed quite radically during the past year. A decision was made

to remove the requirement to ‘clock in’ which created a factory type environment. As a

result, other ways of recording the hours worked were needed, and the onus has been

put on individual teams to agree and record start and finish times.

It is planned to absorb some of the administrative activities currently carried out at

branch level, freeing up branch staff to spend more time dealing with customers.

Managers are looking at how these administrative tasks can be resourced centrally.
Some teams within the department meet targets, others do not. This is being

examined, to understand the work process better and where improvements can be

made. Individual teams are not being singled out for criticism but, rather, differences

are being used as a learning process. Recently there has been a greater focus on

individual productivity, however this is being done within a team framework.

Call centre operation

Over 500 people are employed in two call centres. They deal with telephone, email and

Internet queries.
The current manager has been there for seven months. He has removed the old

performance measures and removed wall boards showing the number of calls queuing.

Only one performance measure is seen as important: the proportion of working time

spent talking to customers. These changes have reduced pressures on staff and

improved the working environment.

It takes about six months to train someone to become fully competent and able to

handle a wide range of calls. This initial training is followed by regular updating, to

ensure staff keep up with changes within the organisation and new or variations to

products.

Complaints department

Customers make complaints by letter or by telephone. One person sees each complaint

through, including collecting the necessary evidence and informing the complainant of

the outcome.
Historically, staff have spent a long time on the telephone and some were showing

clear signs of stress. These staff were taken off telephone work, but this created

problems amongst other team members who felt unfairly treated and that those not

taking telephone calls were only doing part of the job. The manager discussed these

issues with team members and made them responsible for coming up with a solution.

Eventually a rotation was designed. During a working day, a team of four, staff the

phones. Two people are on the lines at a time while the other two sort out the

evidence needed for the complaints they have just taken. Everyone has a week off

telephone work, instead responding to written complaints.

Personnel

The work is mostly project based and timescales can be quite long. For example, the

review of absence (see below) took around six months. Deadlines are often flexible.

Some have an absolute deadline. Personnel also work with managers, answering

queries and providing support, which is more of an immediate task.

Customer demands

External customers are key, and everyone in the business understands this. The retail

branches, call centres and complaints department are the main customer facing

functions. Central support functions all have internal customers. Some of these

functions have a more direct impact on external customers. For example, if the back

office function does not process cheques and other transactions quickly this has an

impact on the ability of the retail branches to operate effectively.

Back office function

The main customers are the retail branches although they also provide a service to the

Internet and telephone banking activities. All the processing activities have to be kept

up with on a day-to-day basis or there will be an impact on customers. Different teams

experience different pressures. Clearing cheques is somewhat less pressured than

telegraphic transfer. For example, if a transaction is needed to meet a mortgage

deadline it has to be done promptly, a backlog cannot be allowed to build up.

Recent technological upgrades mean that staff in branches can now track transactions
themselves rather than having to rely on the back office function for their information.

This is taking time to embed. Branch staff still prefer to telephone the back office

function, and staff there are having to provide support in the use of this new

technology.

Call centre

Performance measures have been changed to encourage better customer service as

well as to improve the working environment. Measuring the number of calls and their

average time has been abandoned. Customers dictate how long they want to be talking

to an advisor.

Workforce issues

Working hours

Most full-time employees work 9.00am to 5.00pm. There is structured flexibility in a

number of functions, for example, 8.00am to 4.00pm and a night shift in the call

centres.

The business is trying to become more flexible, to meet the demands of employees and

provide better customer service. A 35-hour contract within an 8.00am to 8.00pm

period has recently been introduced. No overtime will be allowed between these hours.

Career development

A major initiative has been promoting career development. Focus groups among staff

illustrated how many did not have sufficient information on the opportunities available

to them. A database has been created. This provides information on the range of jobs

in the company and their associated salary levels and skill needs. However, some

managers still prefer to look externally, on the assumption that particular types of skills

and expertise are not available internally.

Staff benefits

There are many staff benefits. In one administrative centre there is a gym, shops and a

heavily subsidised canteen. In the other, a canteen and small shop. All employees are
offered various discounts: for example, on membership of a health club.

There is also a range of flexible benefits: for example, it is possible to buy or sell an

extra five days holiday or to purchase extra pension.

Skill and role flexibility

The extent of skill and role flexibility varies between areas. Most areas have a

competency framework designed to increase flexibility. These were introduced three

years ago to facilitate movement within the company.

In the back office function, experience is very important and the company is keen to

retain staff. Team managers are often promoted internally and more has been done to

support promotion within the department. Flexibility within and across teams is

encouraged. For example, there are four teams involved in clearing cheques, and team

members are multi-skilled to cover a range of tasks. Some teams required more

specialist skills, but it is ensured that sufficient people have the necessary expertise to

cover.

Morale and commitment

Morale and commitment was reported to be very good by everyone interviewed.

Information from a recent staff attitude survey was provided as further evidence. The

attitude survey included benchmark data from other finance companies and this
business scored more positively on virtually all measures of satisfaction.
Much effort has been put into improving morale in the back office function. Everyone

was consulted about this and there is now a ‘buzz about the department’. The office

layout has been updated. There is now a bright environment and new desks with each

team co-located. Efforts have been made to improve social cohesiveness, for example,

a competition for the best-decorated area was held at Christmas. Backlogs of work

have been cleared and processes streamlined.

The call centre was experiencing high levels of labour turnover and long-term sickness

absence. Changes were made to create an environment in which people wanted to

work and in which they felt able to do a good job. These included removing more

performance measures as outlined above, and incentivising the work. Managers visited

those on sick leave to discuss the changes and the message was spread by word of

mouth. People returning to work were able to build up their hours gradually and were

initially set lower targets. The call centre now generates sufficient sales to pay for

itself. Labour turnover is very low and the number of staff on long-term sick leave has

been reduced from 18 to four.

Some findings from employee attitude survey

The following findings are taken from the 2000 employee attitudes survey, for which

the response rate was 78 per cent.

Eighty per cent felt able to discuss pressures of work with their line manager; 91

per cent with colleagues; 80 per cent with senior managers.

Seventy-seven per cent felt they could balance their work and personal life

satisfactorily.

Seventy-four per cent said working hours were flexible enough to fulfil their job and

domestic commitments.

Sixty-six per cent felt that most of the time morale in their branch/department was

good.

Eighty-seven per cent agreed with the statement that ‘the people I work with co-

operate to get the work done’.

Seventy-three per cent felt that ‘the company cares about the welfare of its

employees’.

Sixty-eight per cent agreed that ‘managers decisions concerning employees are

usually fair’.

Forty-six per cent reported that ‘there were sufficient people in their

branch/department to provide consistent levels of service during peak times’.

Forty per cent felt that ‘senior managers are good at recognising when employees

face extra workload pressure’.

Work-life balance

Encouraging a balance between work and other aspects of employee’s lives is felt to be

very important, and the organisation tries to link up with whatever is happening

externally. Parents at Work run a competition to find the most family-friendly line

manager and people are encouraged to nominate their manager.
There has been an increased emphasis on flexible working which is part of a larger

programme of cultural change. This is partly because the business needs to become

more flexible to accommodate customer demands; however, it also benefits employees.

Managers and staff are encouraged to recognise that working flexibly and work-life

balance are not just about families, and that it is not just personnel pushing these

issues. This is promoted through the in-house newspaper by publishing profiles of

people who work flexibly. Someone who is a JP works part -time; another member of

staff plays netball at national level and works flexibly to accommodate this.

Retail branches, in particular small branches, are less able to accommodate flexibility
than central and head office functions. However, the personnel function is trying to

encourage managers to think more flexibly and creatively. For example, staff can take

shorter lunch breaks and take turns in leaving early. Off-counter duties can be done at

the beginning of the day rather than the end, enabling some people to work 8.00am to

4.00pm, rather than 9.00am to 5.00pm.

A range of flexible patterns are worked. Term-time working and a compressed working

week are popular among staff. However, it can be difficult to arrange cover for the

former, and a compressed working week is not so popular amongst line managers. It is

often the people who work long hours who opt for this. Personnel sell it to managers

on an employee morale, rather than business need, basis.

Job sharing is not very popular among staff. It is up to individuals to find a job share

partner. If one leaves, the job share can be withdrawn and might revert to a full-time
position.

Consultations found that line managers wanted more support in implementing flexible

working and other initiatives. A lot of information is available, for example, on the

intranet, but many simple queries were still being directed to personnel. Managers were

reaching information overload. Personnel are now focusing on the processes managers

have to follow. They have set out a series of questions which individuals and their line

managers should consider when looking at whether flexible working is appropriate for

the individual and their role.

Call centre

In the call centre, hours are set as flexibly as possible to suit the needs of different

employees. For example, young people are very flexible in the hours they work but

often want Friday night off; mothers often want to work evenings until their children

are older, than during the day. Managers also recognise that people’s lives change and

will try to allow different working patterns

over time. If someone asks to change their

hours and this cannot be accommodated at the time, they will be told approximately

when this might become possible. This is all part of the recent set of changes

introduced



previously there was no flexibility.

Policies relating to absence

Unions are consulted on all changes in policy and all policies are agreed with them.
Parental leave is implemented as specified in the legislation.

The organisation has clear policies on most aspects of absence. For example, a

document entitled ‘Time Off Work’ sets out how many days employees are entitled to
take in a range of different circumstances and whether these are paid or unpaid. For

example, an employee who has suffered a domestic emergency (fire, burglary or flood)

may be granted one day’s paid domestic leave. When a member of an employee’s close

family is critically ill, one to three days’ paid domestic leave may be granted.

These policies are provided as the basic minimum and as guidelines for managers.

However, there is flexibility for managers to adapt policies to meet the circumstances

of individuals, for example, through allowing a greater number of days unpaid

compassionate leave in particular situations.

The organisation has recently reviewed the management of sickness absence. Existing

procedures have been reinforced and managers provided with more guidance, rather

than anything new being introduced. The guidelines aim to educate managers to

identify patterns of absence, in particular regular odd days off, and pick up on problems

before they become serious. A work related problem may be addressed through, for

example, adapting working hours or moving jobs. They are not aiming to penalise staff

who are genuinely ill. If there is a persistent pattern of absence with no clear underlying

cause, this will be discussed with an employee and they may be referred to a company

doctor. If necessary, persistent absence becomes a disciplinary issue, although this is

very rare.

In outline, the management process includes the following:

If someone telephones in sick they should always speak to their manager and not

just leave a message. If they are likely to be off for longer than five days they are

reminded that a doctor’s note is needed.

The manager should explore how serious the illness is and how quickly someone

will return-to-work. It is aimed to encourage different behaviours. For example, it is

acceptable to take half a day off sick from work; if someone is off on Thursday it

should not be assumed they will not return until Monday.

Managers conduct a return-to-work interview even if someone has been off for only

one day. They are given help in what to ask and how to conduct these interviews.

The aim is to identify patterns of absence and whether there are any underlying

causes.

If someone becomes long-term sick, managers are asked to keep in regular contact.

This should not be seen as checking up but to make people feel that the business is

concerned about them. Ways of returning to work, such as, shorter working hours, or

moving to a different job, will be explored as appropriate.

Occupational sick pay at a person’s usual salary level is paid for six months. A further

18 months is allowed on prolonged sickness benefit (PSB) at 75 per cent of salary,
unless an illness was self-induced through negligence, in which case 60 per cent of

salary is paid. Pension contributions are paid throughout. Towards the end of this

period there is a review at which the likely outcomes are examined. Dismissal in such

cases is very rare. It used to be up to individual line managers to manage staff on PSB.

There is now someone who deals with this centrally, to provide an overview of what is

happening across the company and ensure consistency of treatment.

Patterns of absence

Management information on absence is not very comprehensive. There is some

information on sickness absence but not on domestic leave. The company is about to

set up new systems for recording such information.
Sickness levels have increased slightly over the past year. Retail branches average

around seven days a year per person. Some head office functions averaging three or

four days. The main reasons for sick leave in December were colds, stomach upsets

and influenza. The greatest number of days off was for depression, cold and influenza.

There are many day absence attributed to illness. This was identified through a health

and safety project on stress. Around 30 people are on prolonged sickness benefit.

Typically, female employees add the four weeks parental leave they are entitled to in

the first year to their maternity leave, along with any accrued holiday. This fits in well

operationally as maternity cover is simply extended to cater for this. There is a 97 per

cent return rate after maternity leave and many return to a more flexible working

pattern, in particular, part-time working.

Cover arrangements

Managers work closely with operational personnel to arrange absence cover. As work

becomes more flexible and there are a greater number of opportunities for absence,

managers have to become more creative and flexible in their approach to staffing a

function. Basically, a process is gone through, although this is not necessarily a formal

step-by-step process, to assess:

Whether the work can be left for a day or so

Whether existing team members can cope, making additional cover unnecessary

Whether another team can help out

Whether there is a need for longer-term cover (this might involve a secondment

from elsewhere in the business, putting an existing team member on temporary

promotion, bringing in a temp or someone on a fixed-term contract, or recruiting

permanently).

Managers’ attitudes, their ability to manage, as well as the nature of the work are

important influences on the cover arranged. Some functions have more immediate

contact with and impact on customers. If someone is absent, cover is almost always

needed in these areas.

Maternity leave is usually covered by internal secondments, especially in the two

administrative centres.

Personnel

If someone is off for a few days the work is either covered or left for their return. There

is a considerable amount of project based policy work for which there is usually little

need to cover.
Absence is typically a few odd days and a section will just cope. If someone has ’flu,

for example, this can present more problems, but the workload is usually covered by

other team members. One person who was off after an operation worked at home for a

while. When someone else had an operation, cover was brought in.

One personnel respondent reported that her team was very flexible about people

working at home. She reported that she would work at home if her children were ill.

In another personnel team, a member of staff has every Monday afternoon off to go to

college. He makes up the time by working longer hours on other days. The fact of the

organisation allowing him to take this time off makes him feel more loyal and prepared

to work longer hours at other times to cover the work. The project nature of his work

makes this arrangement possible.

Back office function

Here they try to cover sickness absence within a team or, if absence levels are

particularly high in one team, ask members of another to help out. Skill flexibility within

the function supports this. So far in 2001, ’flu has led to a high level of absence and

some teams have been under considerable pressure. Temps have been brought in but

they often lack the relevant expertise and experience. Most of the work cannot be left

and a backlog cannot be allowed to build up. For example, some 24 hour processes
have to be kept going and many money transfers cannot be delayed.
For planned leave, Microsoft Outlook calendar is used so that it is clear when others

are off and when it is possible to take leave. Annual leave is covered by other team

members. Supervisors and managers cover for each other. Some teams are self-

managing. Members agree how many people can be off at any one time and how they

will cover for this. Other teams rely more on their manager.

Maternity is usually covered by a secondment within the department or, if no one is

available, from elsewhere. Teams will try to cover the gap this leaves or someone will

be brought in.

If they have to bring someone in, a fixed-term contract is preferred to temps. The latter

is more expensive and not totally reliable. In summer students are recruited to provide

cover.

Once it is clear that someone will be on long-term sickness absence, resources on the

team are reviewed. If possible, cover is arranged within a team, possibly through

shuffling tasks between members. If this is not possible, someone is brought in from

outside.

Lateness is covered within teams and the person who is late has to make up the time,

eg at lunchtime.

Call centre

The call centre runs with five per cent excess capacity in staffing, as it is known that

this level of cover will probably be needed.
Sickness absence is a day-to-day issue. Managers check that cover is needed, use the

excess capacity and consider people who are able to be flexible within their working

hours/working arrangements. Two or three times a year the level of absence will be

such that cover is not possible and calls remain unanswered. If someone is going to be

off, they have to phone in an hour before they are due to come in. Ensuring cover at

night can be particularly difficult. There are only three staff on duty and additional

capacity is not immediately available.

Planned absence is usually more easily coped with. It is known they are going to

happen and most can, to a large extent, be forecast. The excess capacity is usually

used to cover this type of absence.

For longer-term sick cover, they mostly use the excess capacity but will keep the

situation constantly under review.

Meetings or training might be cancelled to provide sufficient cover if all other

immediate forms of cover are used up. If absolutely necessary, overtime will be paid or

a temp will be brought in.

If 30 to 40 staff are off at once this has a real impact.

Within branches

For health and safety reasons, certain staffing levels are necessary to allow a branch to

open. Absence can, therefore, be a particular problem for small branches. If they are

down to two people it is impossible to open. The branch or regional manager will
telephone other branches to find cover. This is more straightforward in larger urban

areas, less easy in remoter areas. In extreme circumstances a branch will not open, or

will open for a reduced number of hours.

Complaints department

A range of mechanisms are used to cover for absence. If an absence is planned, or

becomes longer-term a more permanent solution will be adopted, for example, bringing

someone in on secondment or a fixed-term contract.

To cover short-term, and ad hoc absence up to ten days, they juggle with existing

resources. For example, rotas might be readjusted, complaints might be referred to the

manager of the branch they relate to, the workload will be looked at to see what can

be deferred until someone returns, overtime may be allowed, work might be given to

another area, or someone ‘borrowed’ from elsewhere in the business.

An underlying principle guiding the management of absence in this department is that it

is not acceptable for service standards to be compromised.

Cumulative impact

From an overall company perspective there is not a specific threshold level at which

absence becomes an issue. The aim is to minimise absence attributed to sickness,

while not penalising those who are genuinely ill. People who take many odd days off
for no clear reason have an impact on teams, resources and costs. Furthermore, they

are not felt to be showing the behaviours desired in terms of attendance.

This does not necessarily fit with the departmental and line managers’ perspectives.

Absence is felt to put pressure on colleagues and, in particular, managers. Colleagues

who have to cover may feel unfairly treated. Managers have to be more creative in how

they get the work done, and at times struggle to find sufficient staffing resources.

Some examples

One employee was on an extended career break to care for a relative and was

guaranteed a job back on their return. Someone was recruited on a fixed-term contract

to cover. This is preferred to bringing in a temp, which is felt to be expensive and not
very reliable.

One employee was absent on many single days, often a Monday or Friday. This

absence was having an impact on the rest of the team who had to cover his work and

did not feel he was really ill. The departmental manager talked through the patterns and

reasons with him. The main reason was that he was often ill in the morning. His

manager persuaded him to come in and go home later in the day if he still didn’t feel

right.
In the Complaints Department, two people had a virus which affected their balance.

Both were off for sometime. At first, cover was ad hoc within the department, but

there came a point at which others wanted to know when they would be back or when

there would be some cover/replacement for them. One was an admin person, and a
temp was brought in to cover. The other was a team manager, and this was more

difficult. At first the team covered. The post was then made into a development

opportunity and someone took on the team manager role, although this meant that the

rest of the team was left one short. It was important for the departmental manager to

keep the rest of the team informed about what was happening throughout this period

of absence. It was two or three months before these two people were really well

enough to work. They returned to work gradually, building up from a few hours a day

to a full day.

A member of the Complaints Department developed a progressive illness. An

arrangement was made whereby this person worked when they were well enough,

making up their hours as they could. Some other team members did not understand

and felt that this person was being given preferential treatment. Eventually this

person’s role was changed. Their illness meant that they could not think fast enough to

deal with customers directly by telephone, but could effectively answer letters and deal

with paperwork where the thinking did not have to be so immediate. This led to

complaints from some other team members who did not like the telephone work and

felt unfairly treated. The role was changed again. If a complaint is not resolved

satisfactorily by the company it will go to the Ombudsman. This used to be done by
the employee who had seen the complaint through the company, but it was decided to

take all this aspect of the work and give it to the person with health problems.

Although deadlines still had to be met, the work was less pressured. This person can

work when she is able and meets her performance targets. They are currently exploring

formal homeworking as an option. The rest of the team eventually accepted the

change. The situation had to be clearly explained:

‘It boils down to the relationship with the team. A good manager should

have a good rapport, and the working environment has to be right.’

Costs and benefits

The company was able to identify the following costs and benefits of absence:

Costs

Costs in terms of management time. Arranging cover, especially for ad hoc absence

and managing employees who are absent, especially those who are persistently off

sick from work or who are on long-term sick leave, can be time consuming.

Ad hoc absence, mostly due to sickness, puts pressure on other team members

when they have to pick up the work. Longer-term absence has an impact when

cover cannot be found quickly or if the person brought in does not have the

necessary skills or expertise.

There can be a backlash from other team members, especially if they feel that the

illness is vague or that people are not absent for genuine reasons.

Absence can have a negative impact on customers and lead to loss of business. In

the call centre there is occasionally a delay in answering calls or, in the worst

situation, calls are not answered. A branch might not be able to open or open

restricted hours, leading to reduced or lost business.

Benefits

Employees are demanding more, and are clearer about what they expect from an
employer. Providing flexibility and time off for emergencies or other activities such

as studying, makes employees feel more valued by and loyal to an employer.

Giving employees flexibility to take time off to deal with problems, rather than using

up their holidays, makes them feel more valued by and committed to the company.

Employees are more productive if they are not worrying about personal or domestic

problems.

Providing flexibility to have time off in emergencies makes absence easier to

manage and is more likely to create an atmosphere of openness and trust.

Cover for longer-term absence can be used as a development opportunity for other

members of staff.

Providing time off for emergencies allows employees to use annual leave for

holidays, rest and relaxation.

Arranging cover and more generally managing absence can make teams, managers

or the organisation think about alternative, often more effective ways, of organising

the work.

Emerging themes

With respect to sickness absence, the overall aim is to move towards a culture

through which people expect to be in work. If someone is ill they should have time

off to recover.

If people are genuinely ill, the company will give them time off and support to help

them return to work.

It is important to consider the impact of absence on those covering, especially if

someone is taking excess and unnecessary time off. If someone is genuinely ill and

needs time off for a while, it is important to ensure that sufficient cover is available.

There was evidence of elements of good practice, including:

•

Skill and role flexibility to facilitate cover. This also contributes to promotion and
progression within the organisation

•

The introduction of self-managed teams can facilitate cover between

arrangements. These also stimulate colleague loyalty and self-policing

•

The use of absence cover, especially for longer-term planned absence, to
provide development opportunities for other staff

•

The need to support managers in implementing the process. They need guidance

about what to do, rather than a detailed list of what is and what is not

acceptable, or being left to make decisions alone.

The focus on minimising certain types of absence cannot easily be divorced from

more general policies aimed at making the organisation more effective: for example,

flexibility and work-life balance, changing working patterns and conditions. Absence

is also reduced by changing the culture and making staff feel better about their

environment.

Giving employees time off when they most need it is repaid through greater

employee loyalty and commitment.

The way sickness absence is dealt with links in with the overall culture of the

organisation.

Summary of data sources

Interviews at head office with:

Corporate Personnel Consultant responsible for EO/diversity, which includes

translating legislation and other government directives into company policies and

guidelines.

Senior Operations Manager responsible for a large administrative area (back office

support to banking services provided in the retail branches).

Senior Executive of Call Centre Operations.

Employee Relations Manager (in section which deals with absence policies and

guidelines), also previously manager of Complaints Department.

Able to look at results from employee attitudes survey (no spare copy to take away).

Written documents on:

Maternity policy

Parental leave

Time off work (eg compassionate leave, domestic/family leave, paternity leave,

attendance at court, armed forces voluntary reserve unit, public duties, medical

appointments)

Homeworking procedure and guidelines

Guide to flexible working

Absence management procedure, including sickness absence reporting and
prolonged sickness benefit scheme.

Food Retailer case study

Business background

The business is one of the leading grocery retailers in the UK. Performance dipped

during the late 1990s but has subsequently improved with the implementation of a new

commercial strategy and changes in the management team.
The strategy recognises that the stores are the site of contact for customers and that
those working in the stores offer the point of contact for customers. The new vision

emphasises:

Customer service: the aim is to deliver exceptional face-to-face service to

customers via increased store staff training and incentives for all employees.

Availability: new supply chain systems have been introduced to improve the

delivery of products to the shelves for when customers want them.

Prices: between 50 and 60 discounted product deals are to be available each week.

Fresh foods: an emphasis on high product quality and value for money.

Work organisation

Two per cent of the workforce are employed at Head Office and this includes human
resources, pensions, marketing, etc.

The majority of employees work in a national network of stores and depots. Of these:

Almost 60 per cent are female

Seventy-five per cent (approximately) work part-time and 25 per cent work full-

time.

Supply comprises the distribution network and the supply chain. The distribution

network comprises regional distribution centres which employ staff dedicated to getting

products to the stores. Supply chain manages the flow of products through the

distribution systems to the stores.

In all but Head Office, business is 364 days a year and 24 hours a day. Work

organisation is driven by periods of high customer demand, which, on a yearly basis,

includes Christmas and on a weekly basis includes Friday and Saturday. Depots’

activities dovetail with these demands.

There are three major constraints on the work process within stores, these are:

1. Ensuring that the shelves are fully stocked
2. Busy periods within a day (eg end of school, 5.00pm to 6.00pm ‘home-time’) and

within a week (ie Friday and Saturday)

3. The regular changeover in the offers advertised in the store, which takes place late

on Tuesday or early Wednesday.

Thus, whilst the range of regular in-store activities is relatively limited, the activities are

interdependent and have to be sequenced. Also, whilst there are periods of higher

customer demand, these periods are relatively predictable, as is preparation for them.

The new company strategy formally recognises that the stores are ‘at the heart of’ the

business. The structure of stores is shown above. Staffing levels are determined by

formulae provided by Head Office, in which the critical element is the volume of the

store’s sales. The volume of sales determines the number of paid hours allocated to a

store and the in-store HR manager translates the allocated hours into the numbers of

people employed. Almost 40 per cent of stores are superstores, and typically employ

250 people and sell up to 22,000 products.

Resourcing in most stores relies routinely on existing employees working overtime.

Managers’ schedules regularly roster individuals to work hours additional to those for

which they are contracted. The amount of overtime required depends on business

priorities.

To deal with issues relating to people and their effective management, the Top Team of

each store includes an Human Resources (HR) Manager. In addition, and located at

certain stores within each region, there are Employee Relations Managers and Human

Resources Operations Managers. Employee Relations Managers (ERM) deal with

problems relating to employees and their terms and conditions. Nationally, there are

seven ERMs. ERMs provide direct advice services to both employees and managers.

Each ERM covers a geographical area such that, for example, the ERM interviewed

serves approximately 2,000 of the 92,000 employees.

HR Operations Managers relate to a number of stores, or superstores within a smaller

geographical area. They support in-store human resources staff and store managers on

Figure 2: Store structure

The Top Team

Store Manager

Stock, Ambient, Systems and HR Manager

Controller

Assistant Controller

Deli, Meat, Bakery, etc., Department Heads

Shop Floor Workers

Customer Service Assistants, General

Assistants, Cashiers, Porters and Packers

all matters relating to managing employees, eg training and development, recruitment

and selection, and attendance management. A full-time Human Resources Operations

Manager may relate to 12 stores, including one superstore, within one geographical

area.

Customer demands

In the last 18 months the numbers of new customers has increased. In terms of the

nature of demand, customers continue to want convenience, more exotic products, and

more specialist services. These three trends have characterised food retail over the last

decade, and persist. Contributors considered that the business is responding positively

to these specific demands.

Workforce issues

Compared with his predecessors, the new Chief Executive is felt to value employees’

contributions more positively. He is keen that all employees feel that ‘there is

something in the business for them’:

‘Our vision is to be a company where everyone feels they can do something

personally to bring in more clients and create more sales. We will then be the

kind of business where everyone gets a buzz from what they do.’

In food retail, the pace of change is reported to be ‘constantly fast’: ‘It is a hard

environment: they, employees, either cope or flounder.’

‘The business’ and ‘the city’ drive all activity: ‘Ten years ago not everything revolved

around the city but today keeping share-holders happy is the single and over-riding

concern.’

In the stores, employees’ motivation is recognised to be a problem. Turnover among

shop floor workers varies between 20 and 25 per cent. Relations between store

employees and managers are reported to vary dramatically between stores:

‘In our store I would like to think, and actually I do believe, that all of them

feel they could come to at least one of us on the top team and be confident

that they could talk to us about concerns, confidentially, and that we would

discuss these with them.’

Employees who are not able to be flexible, or are not prepared to be available for busy
periods (or times that are more difficult for the store managers to cover) are less well

regarded than those who are able to and prepared to be available.

Some managers display a lack of sympathy for employees’ concerns and interests:

‘We are not good at praising performance and publicising good things we do

internally. We are good at being negative about things that we call wrong

(whether or not we currently believe they are).’

Overall, within stores, the relationship between managers and employees is generally

felt to be negative and mistrustful. This is illustrated by the terms used by a manager

describing women returners:

‘Some women returning from having children take us for a ride. We bend

over backwards to fit in with the hours and days they want to work while

their family is very young. Then, after five years, as soon as the children go

to school, they’re off; they go back to whatever their first career was. We

are just convenient in between times.’

Managers and staff have different reward systems. Store and Departmental Managers

have access to generous base salaries, to perks such as company cars and to
considerable performance and contribution related bonuses. To date, shop floor

workers have been excluded from all bonus schemes. This has been the source of

some resentment. The Chief Executive is considering introducing bonuses for all staff.

Pressures to prioritise customer care and to ensure a high level of multi-skilling have

recently increased demands on store employees. The priority being given to customer

care is seen as the most significant recent development in the retail sector,

‘… gone are the days when the business was about getting the tins onto the

shelves.’

Shop floor workers and managers’ customer care skills are seen as business critical. A

huge company-wide initiative is currently being introduced to develop all employees in

order that they offer customers a ‘five star service’. A further new demand is that

employees understand the work process and how they contribute to it, and, most

importantly, take responsibility for their contribution.

Increasing skill substitutability is a further pressure within stores. An increasing

proportion of the shop floor employees are trained to be competent in a range of roles.

Packers and General Assistants are, for example, trained to operate tills. More skilled

roles (such as bakers) are not considered to be substitutable. Multi-skilling is considered

to benefit both the business and the individual employee. For the business, cover is
easier to arrange and for the individual, the greater variety gives them more satisfaction

in their work.

Work-life balance

Practices relating to a positive work-life balance were, in general, not well received by

managers. They also tended to view domestic responsibilities as something of an

irritation: ‘we live with it, because we have to’. They consider that in providing

employees with a number of varied shift patterns, the business has discharged its

responsibility in respect of enabling employees to meet their commitments outside

work. Shift patterns enable employees to work (for example) between regular hours, on

regular days, only certain shifts and a mix of these. Managers rated highly the practical
range of shift patterns offered and considered that they were:

‘… sufficient to accommodate almost any childcare responsibility or

domestic circumstance.’

‘… and so home can be left at home’.

The extent to which shift patterns actually meet employees’ needs is uncertain. While

managers held the view that the shift working arrangements available allowed

employees to ‘box and cox’ their domestic commitments, they acknowledged that their

development has been ‘ad hoc’ and was not based on data about employees’ needs

and preferences.

Policies relating to absence

Formal written policies relate to annual leave, maternity leave, working reduced

hours, undertaking training, sickness absence and lateness. Leave for sickness is

not paid during the first 12 weeks of an employee’s service.

Leave for religious holidays, for voluntary work, and for voluntary civic

responsibilities is not permitted. To fulfil these needs, annual leave must be taken.

Different staff groups have different leave entitlements. Head Office staff have

access to sabbaticals and career breaks; store staff do not.

In relation to sickness absence, policies specify the following responsibilities and

procedures:

Absence is recorded by the administrative assistant to the in-store HR manager, and

monitored by the HR manager. Absence is entered into a ledger on a daily basis.

Recording is driven by questions relating to payment: sick leave is paid for after six

months of service with the company.

The individual is required to give a minimum of two hours’ notice of their absence
and they are required to report this in person to the duty manager. During this

conversation, they are asked a series of questions about their sickness and whether

medical diagnosis and attention have been received. The duty manager records the

answers to the questions. If the absence is continuous for seven days, a doctor’s

certificate is required.

Upon return to work, the individual is interviewed by their line manager to establish

their fitness for work and whether their absence was genuine and to decide

whether to recommend payment for the period of leave. Managers are encouraged

to err on the side of trusting employees’ explanations. The genuineness of the

absence is assessed by checking for incompatibilities between different sources of

evidence relating to the absence and return to work (eg someone on leave with a

sprained ankle is then seen playing football). Store managers make the final decision

as to whether sick leave is paid. In practice it is often the in-store Human Resources

manager who, knowing more about the circumstances and the individual, will make

the decision, or strongly advise on their decision.

If an individual has three periods of unplanned short -term sickness absence within

six months they are ‘put on absence monitoring’. This means that the HR manager

monitors their attendance. If they are absent once more then disciplinary
proceedings are commenced and these might result in the individual being

dismissed.

Absence monitoring concerns only ‘basic sickness absence’, for example, one or

two days off sick with ’flu. It does not currently encompass other unplanned short -

term absence such as emergency leave or compassionate leave.

In-store and Operational HR Managers provide additional monitoring and intervention.

Within stores, HR managers report on sickness absence levels and related issues three

times a year to the top team. If problems are identified within stores, the in-store HR

manager will consult the local Operational HR manager about possible interventions and

these will be discussed with the individual and their line manager.

In respect of planned leave, points of note regarding policies are:

Employees are required to give three weeks’ notice of their taking maternity leave.

Experience in stores has suggested that leave can be managed effectively with this

amount of notice, so it has been written into the policy as the minimum notice

period.

Rather than the statutory arrangements, employees are encouraged to split their

maternity leave into two 12-week periods. The first is a block of 12 weeks for

the birth and the second is one week off during each month of the next twelve

months. The second is contingent on return from the first within 12 weeks. The

second period of repeated short and planned absence is considered easier to

cover than an extended period of planned leave.

On return from maternity leave, balancing the business needs, the individual’s

interests in working specific hours or days, and legal obligations to the employee,

can prove testing.

Statutory arrangements apply to parental leave and compassionate leave. Both are

managed locally and subject to line managers’ discretion. Commonly this means

that leave will be increased by a couple of days. Factors considered include the

employees’ length of service, value to the business and their attendance record.

Career breaks and sabbaticals have ‘been experimented with’ for Head Office staff.

In the sense that ‘those taking the leave didn’t come back’, experiences are

reported to have been negative and these types of leave are now regarded

unfavourably.

Patterns of absence

Within the business, senior managers are concerned about levels and patterns of

absence among shop floor workers. However, data were not available and were

reported to be lacking.
In-store absence levels and patterns are monitored by HR staff. They are convinced

that unscheduled absence cause the most problems and have as a ‘rule of thumb’ that

an average short-term sickness absence level in excess of three per cent causes

operational problems.

Cover arrangements

The in-store HR manager is responsible for arranging cover for both planned and

unplanned absence. To cover unplanned absence (such as sickness, lateness), options

include:

1. Colleagues absorb priority tasks (ie no formal cover is arranged). This option is

adopted only when business is quiet.

2. Employees are brought in from their scheduled rest periods to work overtime: ‘I look

at the schedule to see who’s off. I might know that someone who is contracted to

work twenty hours wants to work more that week so I would ring them first.’

3. Employees are moved from elsewhere in the store: ‘I might know they are bored and

looking for a change.’

4. Work is formally re-allocated between employees and managers.

Each option is explored and exhausted before proceeding to the next. Thus, the

preferred option is overtime by resting employees as it is usually easier to organise.

However, as overtime is also a routine means of achieving basic staffing levels, there

are periods such as school holidays when it is more difficult and internal moves etc. are
more likely to be required.

To cover planned absence (such as maternity leave), formal cover options are two-fold:

1. Move an employee from elsewhere in the store
2. Recruit from outside.

Again, the first option is explored and exhausted prior to the second. Planned leave

from certain business-critical positions such as till operators will always be covered. By

contrast, planned leave from other less critical positions may not always be covered, or

cover will not be arranged as a matter of urgency.

Sales performance determines the capacity to recruit new staff and thus also the

pressure placed on the first option of an internal move. Given moderate to high

turnover among shop floor workers, managers are usually fairly confident positions will

be available to new recruits should the existing employee return.

‘The worst was when I had seven women off at one time. I coped exactly by

recruiting new staff. Most existing employees came back to reduced hours or set

hours, for example not evenings. Nine times out of ten I will be able to recruit to

that position and then fit in the returner if and when she comes back. I’ve never let

anyone down; they’ve been able to come back. Maybe not to exactly the same

position

 that’s the ideal  but we’ve fitted them in.’

In-store HR managers considered the following factors to be critical to putting in place

successful cover arrangements:

An essential number of employees ‘on the books. There is an essential level of

resource which is just that

 essential. Without it, we can’t cover’

Training to maximise substitutability of people and skills

Open and informed relationships between HR managers and shop floor workers,
such that HR practitioners understand employees’ aspirations at work and their

commitments outside.

Line managers’ roles in implementing sickness absence policies is recognised to be

critical, but somewhat lacking. Implementation of policies by line managers is

inconsistent, with the effect that day-to-day practice frequently does not cohere with

the procedures and principles written into the policy:

‘It gets difficult when you go into a store and managers, for example, haven’t been

conducting return-to-work interviews, haven’t treated people consistently in their

decision making. Part of any Human Resources role is to get on top of it, monitor

levels of absence and monitor line managers’ etc. adherence to procedures. I have

to nag the store manager about some of it.’

Line managers’ inconsistencies were explained in the following terms (by HR

representatives):

Compared with meeting sales and other targets (which are also related to

individuals’ bonuses), managing sickness absence is relatively low on managers’

agendas.

People management capabilities of in-store managers are not well developed. Their

skills and confidence in addressing performance and attendance issues are limited.

This can mean that new problems go unchecked and may worsen. It can also mean

that when the problem has become so marked as to be unavoidable by line

managers, their reaction is to involve the Employee Relations Managers who feel

that their intervention at this stage is ‘too late, the problem has become so bad and

so entrenched we have little room for manoeuvre’.

Non-financial costs and benefits

Costs

While both costs and benefits were readily identified by participants, all were strongly
of the view that absences place strain on the business and are thus negative, for

example:
‘There are no spare people to cover for absence. We have to use our schedule to its

limits.’

Interestingly, no costs were attributed to the individual employees, only to the

business. By contrast, benefits were attributed to both individuals and to the business.

HR practitioners and managers identified a number of non-financial costs of absence,

including:

Managers’ anxieties associated with their management of the absence (relating for

example to their management of the individual’s performance, the knock-on effects

to the business and their individual and team bonuses)

Management time

Disruption to the business.

Benefits

By contrast, employees were seen to benefit from absence in terms of their:

Greater job satisfaction, via the increased variety associated with the internal job

moves and the multi-skilling used to cover for absent colleagues

Positive sense of being valued by the company, due to its accommodation of their
taking maternity leave and working reduced hours on their return.

The business was seen to benefit by extending the number of staff who had experience

in different parts of the store.

Emerging themes

Key themes emerging from this case study including the following:

Managers view absence as always placing a strain on the business. They also

consider that absence results in non-financial costs for managers and in benefits for

employees.

The company’s accommodation of planned leave can increase employees’ sense

that their contribution is valued. Internal moves and multi-skilling to cover for

absent colleagues can increase shop floor workers’ experience of variety, and so

their job satisfaction.

Unplanned absence is more difficult than planned absence to cover, as they ‘come

out of the blue’.

Until the employee has been with the company for 12 weeks, sickness absence is

unpaid. Thereafter, payment is at the discretion of the individual’s line manager.

Line manager involvement in managing attendance is recognised as critical but their

practices are generally felt to fall short of the procedures set out in absence

policies.

Cover arrangements include re-allocation of work among remaining employees,

overtime, internal moves and recruiting from outside.

Factors critical in successfully organising cover include having: (a) sufficient number

of employees in post, (b) sufficient training to ensure substitution and, (c) a good

understanding among line and HR managers of employees’ aspirations at work and

commitments outside work.

Summary of data sources

Policies relating to absence and its management.
Interviews with:

Employee Relations Manager

Human Resources Operations Manager

In-store Human Resources Manager.

Law Firm case study

Business background

A major law firm which has doubled in size over the past three years.

Work organisation

This case study focused on secretarial and administrative staff amongst whom absence

levels are highest. Each department in the firm is staffed by legal and secretarial

employees. Other functions provide central support: for example, the general office,

accounts, IT, HR, business development, tea ladies and catering. The firm has always

employed the latter directly and continues to do so.
Most secretaries work for two fee earners, a few for three and a few for one. The

latter are likely to have more capacity to provide cover. There is a hierarchy: partner

secretaries, senior secretaries and junior secretaries. Junior secretaries are usually in

their first or second job and are trained by the firm as legal secretaries. They often

work for junior lawyers and move up the promotion ladder alongside them. Salary

scales are not just related to seniority, the scales overlap and also relate to length of

service with the firm. Secretaries and the fee earners they work for often develop a
good working relationship and stay together.

Each department has a small float of secretaries. These are used for absence cover and

to cover peaks in the workload. Some secretaries use float members to do basic typing

so that they can get on with their admin tasks. Becoming a float secretary can also be

a route into a full secretarial post.

Some secretaries are largely typists. Others have more of a PA role. This depends on

the type of support individual fee earners want. The secretaries taking a PA role often

have considerable responsibility, for example, billing, arranging meetings, client

contact. A PA being absent has more impact than the absence of a secretary who

basically does the typing.

Much new technology has been introduced which makes many administrative tasks

easier. However, the system is not straightforward to use and staff have to be trained.

Temps will usually only be trained if they are likely to be with the firm for a while. The

email system has been updated and it is easier to arrange meetings electronically. A

contact database contains client contact information and is used for all mailings and for

business development. It is possible to do large-scale email mailings through this

database.

The main pressures occur when important deadlines loom. Those involved will often

work overnight to ensure it happens on time. This involves all staff, including
secretaries, general office and catering staff. HR are also involved as they have to

ensure that breaks are arranged, changes in shifts happen and that people are paid.

Support staff are paid double time overtime, but if someone is very tired and can’t go

on they will go home. After completion the solicitors will often go home, wash and

return. Support staff might take time off in lieu.

Customer demands

The client relationship is very important. Clients are the only source of income and

everyone is aware of this. The firm is very deadline driven; turn around has to be quick



there is no flexibility around contract completion dates.

Partners and fee earners have direct responsibility for dealing with clients. However,

those secretaries who operate as PAs and have a stronger administrative role often

have to deal directly with clients. Communication is tailored to individual clients. For

example, some prefer to leave messages on a fee earner’s voicemail rather than with a

secretary. The firm tries to cater for these individual preferences.

Although an increasing amount of communication is by email, telephone cover is very

important.

Workforce issues

There are currently nearly 500 employees. Approximately half are professional and half

support staff.
There is a strong team spirit. The nature of the work means that it can be very quiet

one minute and very busy the next. All respondents reported high levels of morale in

the firm.

There is a culture of trust and openness. No rumours are allowed: information is given

to everyone and not held at the top. Staff are also consulted on a wide range of issues.

For example, when a new building was being planned, the plans were put in an office

for all to see and comment on.

There is a strong culture of treating everyone equally. People work hard and there is a

range of benefits, including pension, health and dental cover, a loyalty bonus after two
years, gym membership, a women’s health clinic. There is also provision for a range of

services which staff pay for: for example, recently a masseur and concierge service.

The annual bonus is proportionate to salary. Last year the profit enabled all staff to

have a bonus of eight per cent of their salary. Each year staff are provided with the

opportunity to go on a trip. For example, last year those in one group were taken skiing

for four days:

‘We try to get away each year, this boosts morale and is very good for

people. The firm appreciates that people work hard, for long hours and at

weekends when necessary.’

Support staff are given opportunities to move between departments. Applicants often

ask if such opportunities exist when they are interviewed for a job. However, once they

join, they usually stay in the same department. There has been some movement, for

example from the general office into accounts. A secretary also moved to HR.

Work-life balance

The firm is very flexible. They try to encourage people to have a life outside work, and

some of the benefits outlined above link into this.

Many support staff have children and take time off when they are ill. The time is

usually made up or leave is taken. Some partners with children chose to work shorter

hours. For example, a lawyer returned from maternity leave to a four-day week; the HR

Director works a four-day week because of young children. There are a couple of

fathers who are separated; they sometimes leave at four to be with their children.

There is provision for adoption leave although this has never been taken.

People do go on sabbaticals, for example, to go travelling. This is seen as helping to

motivate and retain people, and they return refreshed.

Policies relating to absence

There are relatively few formal policies in this firm. Much is left to the partners’

discretion. However, this is changing as the firm expands and HR is beginning to

develop more formal policies to ensure staff are treated consistently.
There are a number of generally accepted practices and procedures. If someone is

going to be off they have to ring in each day before 9.30am, unless they have a

doctor’s note. Even if they speak to their line manager they still have to phone HR. If

an answerphone message is left, personnel will follow this up and speak directly to the

person, trying to gauge what the problem is and its severity. There is an open culture in

the firm and it was felt that this makes a difference. People know they can talk to

personnel confidentially. All absence is logged centrally on a database. On a person’s

return, an absence form has to be completed. A doctor’s note is required for sickness
absence after the statutory period.

The firm has Permanent Health Insurance (PHI). Anyone who has been employed by the

firm for a year will have their salary paid by this insurance after 13 weeks’ sick leave.

However, this facility is used only rarely. There were examples given of people on long-

term sick leave who are still paid in full by the firm.

The firm aims to monitor sick leave and look for any patterns. They are not trying to

make people work who really cannot, but to address any underlying difficulties and

provide any support they can, in addition to picking up on the few people who appear

to be taking advantage. For example, they had one Australian employee who assumed

from her previous experience that it is acceptable to take six days a year sick leave.

Employees usually know if someone is genuinely ill and will be supportive, but they do

begin to feel dissatisfied if those who seem to be taking advantage are not picked up

on. Any action taken by managers or HR is usually noticed and seen positively by other

employees. For example, one person was made to get a private doctor’s certificate

each time they were off and this reduced their sick leave.

There is an attendance bonus: if an employee takes three days or less sick leave a year

there is a bonus of £500; if they take from one to five days the bonus is £300. Varied

views were expressed on the effectiveness of this. It can have some impact on the
number of short-term absence people take. However, once five days have been taken it

no longer matters and it was felt that quite a few will take odd days off once they have

lost the bonus. Employees try hard to receive the bonus, which means that people will

‘drag themselves in even if they are really poorly’, especially towards the end of the 12

month period. The bonus was felt to be unfair on those who are very conscientious but

catch ‘flu or something similar which means they have to be off, often for a week.

There was a general feeling that the sickness bonus has little impact on those who take

unnecessary time off: ‘Those mucking about will do so anyway.’

Sabbaticals are available to all. There has to be an element of planning in advance, and

absence has to be related to workload and cover. According to HR no one has ever

been refused. Another respondent, however, said their manager would not let them

have one. Sabbaticals are felt to be important as the firm wants to get the best out of

people and not lose them.

Time off (for example, for medical appointments), is at a partner’s discretion and is

paid.

In addition to statutory maternity rights, the firm offers additional maternity rights:

‘Our maternity bonus scheme is designed to supplement the statutory

benefit and to encourage female staff to return to work after the birth of

their children.’

To qualify for the bonus, staff must have been continuously employed by the firm for

two years and return to work after their maternity leave. A bonus of 25 per cent of

annual salary at the beginning of maternity leave (subject to deductions for tax and

national insurance) is payable in two parts: ten per cent at the beginning of the leave

and 15 per cent on return. The bonus has to be repaid if a person leaves the firm within

nine months of returning. Payment of the bonus is conditional on a person agreeing to

accept any suitable alternative position on returning to work. There is also some

additional flexibility in the system. The maternity policy document ends by stating:

‘The above details of the statutory and occupational schemes are a guide

only and any queries regarding maternity entitlements should be addressed

to the personnel department.’

Patterns of absence

Fourteen per cent of employees had more than three days’ sick leave between May

1999 and January 2000:

Ninety-five per cent of these were women

Eighty-nine per cent were support staff.

Sickness absence appears to have increased recently. However, the firm has expanded

and it seems that although the number of people taking time off has increased the

proportion has not.

There was a feeling that sickness absence had been particularly high during January

2001. However, on probing it was reported that it is often high in the New Year. The

argument is that people work hard and the added stress of Christmas lowers resistance

to germs. Furthermore, germs tend to spread quickly through the office. In January

2001, a head secretary had six people off on one day. However, during January 2000

These figures are available as they relate to the sickness bonus.

there were five to eight women who were off for at least a week with ‘flu. When

annual leave is included, it is unusual to have all support staff in the office at any one

time.

Whilst the largest amount of absence is related to sickness, the firm generally accepts

that if people are genuinely ill they will need to take time off. However, the firm aims

to minimise the amount of sick leave taken. There was a particular problem with staff

taking Fridays and Mondays off, and people taking a lot of odd days off. For example,

one secretary was frequently absent on an ad hoc basis. The person she worked for

didn’t mind as she was such a good secretary and he did not want to lose her.

However, her absence was a problem for HR due to its impact on others in the team.

Four people were on maternity leave, with another four due to go soon. It is thought

that only one person had taken parental leave.

People also take ad hoc emergency leave, and there is occasionally someone on

sabbatical, usually travelling.

If anyone is called for jury service, the firm usually argues for this to be deferred.

However, on occasions this does not work. Recently there were two cases where staff

were called to carry out their jury services. In both these cases, others in the team

covered their work.

Cover arrangements

When the firm was smaller there was no formal absence policy and cover was often ad
hoc. One secretary reported how it used to be the case that if someone was not in,

their fee earners would give anyone the work, unless the recipient was quite assertive

about it. Now the work is allocated to people who have the capacity to do it.
Now the firm is bigger there is more scope for organising cover. However, arranging

this can still be a complex balancing act. Workloads and the availability of any spare

capacity are looked at first. For example, some fee earners might be away and their

secretary be available to help. If things are not very busy, cover might be on an ad hoc

basis; if something comes in, another secretary will pick it up. There is generally a good

team spirit and people will help out where and when they can. When someone needs

help they will email round. When someone has little to do they will email the group

offering their time. If someone says they cannot cover, others accept this.

The preference is for cover to be provided by others in the same group. This is because

they know the work, the systems and the way the firm works. Each department is

building up a small float team. This saves the firm money in the longer-term and

provides more efficient cover. The firm is also looking at the possibility of multi-tasking

between secretaries, the general office and reception to increase flexibility for covering

absence and peaks in workload.

Temps will be brought in if there is no cover available internally: for example, because
things are very busy at that time or there are a large number of staff absent. In the

summer, temps are more likely to be needed. This is quite expensive, but cost is not

really the issue



it is value for money which is important.

For maternity and other long-term leave, HR will consult with the team a person works

in to see what sort of cover is needed. It might be possible to cover in the team, or a

float might be available and, if so, this is encouraged. However, they do not want to

put additional pressure on existing staff. If there is no internal capacity, a temp will be

brought in. A couple of agencies are usually used and HR try to get people who have

been with the firm before and know and understand the work pressures and systems

used.

Annual leave is known in advance. They try to keep cover within the group, including

the use of float staff, but occasionally temps have to be used. Lawyers plan their work

around leave, or arrange cover amongst themselves.

The head secretary in a team plays a crucial role. She monitors and manages the

overall workload and capacity levels within her group, organises cover and trains any

temps who are brought in. The head secretary knows which fee earners are away and

who is less busy.

The preferences of individual fee earners also have to be taken into account in

arranging cover. Some are happy with group cover; others want full cover and

preferably from someone who knows the job and how they personally work.

There is a grey period, between someone being off short-term and unplanned and this

becoming a longer, possibly fixed period. Short-term absence is not normally too

difficult to cope with, unless there are a lot of staff absent at the same time and/or the

team is particularly busy. The grey period is perhaps most difficult to deal with, but

again it depends on how busy things are. Once it is known that someone will be off for

a period, longer-term cover can be arranged. However, if an inexperienced temp is

used, this can cause disruption, in that they need training and are unable to provide a

full service to the fee earners they work for. The extent of disruption does depend on

the role taken by the secretary who is absent. If this secretary mostly does typing jobs

and the fee earner(s) are more self-contained, disruption is less than when a PA is

absent.

Some examples

Someone had just gone on maternity leave for her second child. She had been in the

job for three years. One of the float is providing cover throughout the period for the fee

earners she works for. Because this is a long-term absence they can’t cope with the

cover chopping and changing.
One secretary frequently had to take periods of sick leave. She was obviously ill but

her doctor could not diagnose the problem. She was eventually referred to a consultant

and told to rest. At the time when this first started the department was very busy,

temporary arrangements were made with cover being provided by whoever had time.

Once it was known she would be off work for a while, a float secretary was allocated
to provide long-term cover.

One secretary had worked for the firm for two years. She injured her shoulder and she

could hardly use her arm. She had to take her first period of sickness since joining the

firm and lost the sickness bonus that year. The problem got worse and an operation

was necessary. She was likely to be off for between three and five months. This

secretary works closely with a partner, taking a PA role. She organised all her systems;

wrote cover notes on non-routine things, for example, the way her partner liked things

done, where things were kept. A float covered to start with but she went off sick from

work. This was followed by a difficult time with a number of temps providing short -

term cover. Long-term cover was arranged for the last two months. While she was off

sick, she was sent flowers and colleagues kept in touch. No pressure was put on her to

return quickly and she was paid throughout. Being treated like this made her want to

come back as soon as she could. Her doctor offered her longer off, but she refused: ‘if

you are off work too long you lose confidence’. When she first returned, her peer group

provided a lot of support, for example, lifting things for her. She was allowed to go
home early if the work was finished. The temps providing cover had been quite limited

in what they could do and her partner had to put in a lot of extra work herself during

this period of absence.

Costs and benefits

The firm identified the following costs and benefits of absence.

Costs

If a secretary is off and the department is very busy, it is very difficult to provide

cover, lawyers can get irritated and other secretaries upset because they have more

work than they can handle. The work is very deadline driven, if there are temps

who do not know the systems or who aren’t very good, fee earners can get very
stressed.

The firm is prepared to pay for temps as long as the work gets done, the main cost

of absence is the pressure it puts on other staff. Although there are temps who

work with the firm regularly, they are not always available



new temps have to be

trained and supported by other staff. For example, one head secretary has 44

secretaries in her department, she has to organise cover if anyone is off, including

training temps; she also works for two fee earners.

The ‘tacit’ knowledge held by many secretaries and the reliance of some solicitors

on their secretary means that if one is off, especially in the longer-term, this

knowledge is not easily replaced.

Having a float is cheaper than employing temps, both financially and in terms of

these people knowing how the firm operates, its systems and working practices.
They can also take pressure off other secretaries when they are very busy.

Benefits

The initial view when people were asked directly was that there are no benefits

associated with absence. However, they were usually thinking of sickness and ad hoc

absence. Some benefits did emerge during the discussions.
There can be a benefit to planned absence such as sabbaticals. This is one way of

retaining employees, especially if they want a break, or to experience life more fully.

When someone returns they are often more motivated and feel loyal to the firm.

‘Once in a job for quite a few years, you can become complacent, you go on

holiday so you know there is more out there, taking time off to go travelling means

that you come back refreshed and with more enthusiasm for what you do.’

Those returning from maternity, paternity and parental leave feel valued by the firm.

Emerging themes

There is a need for more formal policies as a firm grows, but there is also a need to

maintain flexibility.

HR find it difficult to remain involved and manage the management of absence,

when responsibilities are heavily devolved to partners and line managers.

There is a value to working with absence (for example, looking at why people are

absent) and to providing support where necessary; being flexible for people who are

really ill or have problems or who simply want a break.

The impact of absence on other team members has to be taken into consideration,

especially if someone seems to be having a lot of odd days off for no clear reason.

Organising cover incurs a cost whether it is short - or long-term, (for example, in

paying additional people) and disruption to the work because a new person does not

have the same knowledge as the person they are replacing. Short-term cover can be

more hassle. For long-term or fixed-period absence it can be easier to make cover

arrangements.

In many respects planned absence is more acceptable. They are known about in

advance, adequate cover can be more easily planned and there may be a positive

benefit to the person from being off. However, it is often not easy to arrange cover

by someone who knows the job and there is a long learning period. Unplanned
absence is more problematic, but they happen and have to be worked around.

With regard to the cumulative impact of absence, there is no clear point at which

absence becomes a problem even if planned. There are many factors which have an

impact. If the firm or department is very busy at the time, very short-term absence

can be a major problem. If cover is provided by an inexperienced person this can be

a particular problem in the short-term as they need a lot of support. However, even

over a matter of months someone might not fully get on top of the job.

Summary of data sources

Interviews with:

HR manager responsible for support staff

HR manager’s assistant

Head secretary

Senior secretary.

Copy of maternity policy.

Manufacturing Company case study

Business background

The company manufactures materials for the building industry. The majority of its sales

are direct to other businesses in the UK, although a proportion of its output is sold to a

major DIY chain for sale to domestic customers. Very little of its output is exported.
Until the mid-1990s the company was part of a large UK holding company with a

reputation for good R&D and a benevolent and paternalistic culture. Recently a share of

the business was bought by a company based in continental Europe, although this has

not yet had a major impact on the running of the business.

Work organisation

The company has several UK plants, each manufacturing core products and some

specialist products. Each is managed by a plant leader. All but one of the plants

operates eight-hour shifts with a rolling pattern (ensuring that nobody works only

nights). One plant operates a 12-hour rolling shift. While there is some seasonal

demand for some of the company’s products (partly due to seasonal demand in the DIY

market), the company operates full production all year round.

The company’s Head Office is based at one of these plants. The HR manager is based

at Head Office, with two part-time assistants. The company employs no other

dedicated HR staff, with day-to-day personnel matters managed by plant leaders.

Customer demands

As most of the company’s sales are business-to-business it finds itself subject to

supply chain pressures. This means keeping customers supplied with products at a

profitable level while keeping down the prices of its suppliers. In general, there is over-

capacity in the UK for the company’s core products, placing further pressure on

margins. As might be expected, the company is also under constant downward price

pressure from its customers.

In addition, customers are demanding shorter lead times between orders being placed

and deliveries being made. This requires greater flexibility in work organisation, the

ability to change product lines more quickly and organising and resourcing shorter

product runs. Another consequence of this pressure is a requirement for lorries to carry

mixed product loads rather than loads of single products. This creates problems in

despatch and logistics planning.

Workforce issues

The company has over 500 UK employees. All but a small percentage are males

working in manual skilled and semi-skilled jobs. In plants which were previously part of

the original holding company the age and service profile is towards the high end, unions

are recognised, there is no overtime and the company pays in the top quartile

compared to the local labour market. In a more recently acquired plant, the age and

service profile is at the lower end, no union is recognised, overtime payments are made

and pay sits at or around the median in its labour market.

The company has pursued a policy to encourage multi-skilling among its production

workers. This has required considerable training investment. Most shop floor employees

now have a set of accredited core skills in production (mostly engineering) and in

maintenance (either mechanical or electrical). This has helped to deliver the flexibility

needed to meet customer demands.

The customer awareness of all employees has increased in recent years. Among

warehouse and despatch workers, for example, there is an awareness that they are the

last people to handle the products before they are delivered to the customers, and

there is a strong desire to maximise quality. In general (and especially in the three

unionised sites) there are high levels of commitment. This is attributed by the HR
manager to the older age profile and to legacy of the previous paternalistic culture. In

these sites there are negligible recruitment and retention problems.

The business made a number of redundancies in the late 1990s in response to lost

contracts. However, the work was quickly replaced and the company has since been

using temporary labour in its three unionised sites. These workers are used as a

‘resource bank’ to help cover peaks in demand as well as absence. As they do not fall

into the directly employed pay bill as a fixed cost, the company has been keen to

maintain the use of this resource flexibility.

Work-life balance

The company has a number of formal policies in this area, covering annual leave,
compassionate leave, time off for civic duties etc. It has offered five days’ paid

paternity leave for several years and take-up has been high.
There are no other formal policies for time off, though the company expects plant

leaders to be compassionate and to exercise their discretion within the needs of the

business. The HR manager feels that the paternalistic culture which remains in the

three unionised sites makes this approach sufficient. In the newer, non-unionised plant,

the culture does not yet support such informal flexibility.

Overall, there is no sense that the existence of these policies and practices has had

either a positive or negative effect on recruitment or retention. Indeed, the HR manager

believes that paid paternity leave has been a feature for sufficient time for it to be a

widely accepted benefit which has become embedded as an entitlement.

Policies related to absence

The company has formal written absence management policies. Their emphasis is on:

The employee’s role in notifying absence

Absence monitoring

Referrals to occupational health

Disciplinary procedures relating to absence and lateness.

Specific rules governing shift workers stipulate that notice of absence must be given

within 15 minutes of the start of the shift. This allows decisions to be made about the

organisation of cover or the need to reorganise the work.

Each of the policies place emphasis on the role of the shift leader in recording and

reporting absence, together with organising and supervising cover.

Patterns of absence

The company uses manual methods of recording absence



it has no IT-based

personnel record system which collates, tracks or reports absence data. Indeed the

main impetus behind absence recording is that absence is one of the measures used to

calculate plant level bonuses.

In general, the overall level of absence is low (currently two per cent). The biggest

problem is isolated cases of long-term sickness (stress, back injury, serious illness etc).

However, the company cannot differentiate between sickness absence and other forms

of absence



other than annual leave. The take-up of paternity leave, for example, is

not routinely monitored. This is not seen as an urgent issue as paternity leave is always

planned in advance and cover can be organised.

Cover arrangements

The unionised site is the only one which uses overtime. This is used to cover peaks in

workload as well as to cover for both planned and unplanned absence. However, the

use of overtime here is currently under review by the new plant leader, who has
discovered a number of abuses of overtime.
In the three other plants, colleagues and temporary employees are used to cover

absence. For short-term, unplanned absence it is often possible for a shift or a product

line to continue to operate. If not, temporary workers are used. For longer-term

absence, and for some which are planned (eg annual leave, paternity leave etc), a

temporary worker will often be used.

In the absence of overtime, these plants call for volunteers to work on extra shifts if

absence is high. Time off in lieu (TOIL) is used as an incentive in these instances.

An example

Manning levels on most shifts are determined by a number of factors:

Productivity targets

Skill needs



eg mix of operator/maintainer skills required

Health and safety rules.

Typically, 25 employees are required per product line in any given shift. Unplanned

absence in particular can cause the manning level to fall below the minimum productive

or safe level. If no short-term cover can be organised, the workers on that shift may

have to move to another product line which requires fewer employees or a less

intensive skill mix. This can also mean a degree of refitting of machinery, which loses

time.

Having to lose production in this way can be particularly expensive and disruptive if the

product is being made to order (ie to a tight deadline, and with warehouse, despatch

and driving employees on standby to deliver it to customers. The problem is slightly

less serious, though still costly, if the product is being made for stock (ie for no specific

order, but to maintain held stock of the product).

These problems most frequently arise with unplanned absence occurring at short -

notice. However, using TOIL to encourage internal cover, or the use of temporary

workers, frequently ensures that such costly consequences are avoided.

Non-financial costs and benefits

The HR manager identified the following non-financial costs and benefits of managing

absence in the ways described above.

Costs

Possible adverse impact on product quality: if a shift went ahead short-manned, or

without the full complement of skills, it increased the likelihood of product quality

being compromised.

Benefits

Multi-skilling in action: redeployment of workers between shifts and product lines

occasionally gave opportunities for workers to practice different skills. For example,

a worker may mostly operate equipment but be only rarely called upon to maintain

it. A change of role may allow him to practice his maintenance skills more than

normally.

Wider product awareness: in addition, redeployment as a consequence of absence

is seen as a useful way of giving workers experience of different product lines,
increasing both their skills and widening their product awareness.

Financial costs

The company was unable to provide details of any direct or indirect costs incurred as a

result of absence. However, it identified the following cost headings:

Increased overtime (one plant)

Cost of temporary workers (three plants)

Reduced productivity

Downtime of capital equipment

Excess stock holdings (if production to order is moved to production for stock)

Lost business through missed deadlines, inability to fulfil orders, poor product
quality.

Emerging themes

Some of the key themes emerging from this case study include the following:

Unplanned absence causes the most difficult problems. Short -notice absence can

have a seriously disruptive and costly impact on production.

Planned absence, while requiring organisation, is far easier to cover where

temporary workers or TOIL can be used. The cause of the absence is less relevant,

though the duration can be important.

Giving autonomy and discretion to local plant leaders appears to have a positive

impact on the ease with which cover is organised and the flexibility with which

manpower is used.

Summary of data sources

Interviews with company HR Manager.

Absence policies.

Merchant Bank case study

Business background

The

bank and its group are a successful merchant banking business. Its operations are

global, servicing a worldwide network of customers.

As business is mainly with other financial businesses, customers are very

sophisticated. Increasingly, customers also have access to the same information as

traders and analysts. While formerly information, research and analysis were business-

critical, now the key differentiator is relationships with clients.

Work organisation

In Equities, Fixed Incomes and other key departments, work is organised around ‘a

desk’ which is a line of desks that houses:

A Desk Manager who will manage teams of between five and 20 employees. Their

success as producers has resulted in their promotion to manage the desk. It is they

who are responsible for allocating accounts

A Manager’s Assistant who supports operations on behalf of the manager and the

desk, and who may sometimes relate directly to clients

A Desk Secretary who handles desk reception and administration

Sales, research and trading staff (producers) who are organised according to: (1)

the financial sector and products and/or (2) geography of their work. They have

distinctive skills (see Table 1).

Business is global and thus 24 hour. There are distinctive patterns of daily activity

which reflect a combination of: (1) activity within other major international markets and

(2) the size of deals being done. For example, those working in the Asian markets will
start work in the office at 6.00am. Most others will be in the office for 7.00am for a

7.20am team meeting every day, to catch up on the results of trading elsewhere during

the night. Thereafter, activity will increase again as, for example, the US market opens.

Trading activity trails off during late afternoon, ie from 4.00pm onwards. Traders tend

to leave the office first, at around 5.00 to 6.00pm; sales staff leave slightly later and

managers last.

Leaving the office does not signify the end of producers’ work. Traders, sales staff,

managers and researchers may be involved with clients during the evenings.

Customer demands

As well as being business-critical, relationships with clients have also become more
demanding recently.

As they have access to the same information, clients expect more from the bank’s

analysts. Their decision-making is highly pressurised

Clients expect fast results and are prepared to move their business quickly:

‘Customer loyalty is a luxury we don’t have.’

Clients are more demanding of the relationship with the bank. To see through

specific deals and to maintain credibility against competitors, they frequently require

a physical presence. This means that overseas travel is increasingly common for

producers.

Table 1: Distinctive skills

Function

Distinctive skill

Sales

Traditional selling skills

Telephone skills
Managing relationships with clients

Good understanding of markets, and able to communicate

this

Research

Reliant on analytical and cerebral skills

Confidence working with complex and detailed data under

pressure
Able to communicate complex arguments relating to these
data to sales and trading staff

Traders

Negotiating transactions on behalf of clients

Tolerating and managing high risks
Managing positioning within highly pressurised and
fluctuating environments

Workforce issues

The culture is demanding: outputs are valued over and above all else but inputs also

matter. As well as their results for the business, producers’ internal rating is very

important. They have to be seen to be dedicated, and to be working long and hard.

Presenteeism predominates ‘not to the point of leaving your jacket on your chair, as in

the States, but not far off’.
Financial rewards are higher than in any other industry. Basic salaries are generous.

Performance-related bonuses are paid on top of basic salaries. These are related to the

performance of individuals, desks, and departments. Bonuses depend heavily on an

individual’s performance, position within the desk and the quality of their relationships

with clients. Work on and around the trading floors is demanding, absorbing and

rewarding.

Future jobs and rewards are heavily influenced by individuals’ positions on various

external ‘league tables’. Thus, in addition to competition for internal rewards and

respect, there is fierce competition within each group of producers for positioning on

these external tables.

The producers are an ‘intelligent workforce’. They are aware of their rights, clear in

their expectations of work and convinced of their personal priorities and their value to

the business, which HR representatives described as follows.

Priorities and value: ‘They are clear and confident. They know why they are
working with us and what they expect out of it. They know that the financial

success of the bank depends on them, their sense of their own power is palpable.’

Rights: ‘Chances are they will know their rights. If not, and we ask them to comply

with X, they will find out their rights immediately. This means we have to be

‘whiter than white’. There is no getting away with anything.’

Expectations: ‘They expect us to deliver positive work opportunities for them (ie for

their portfolio and profile), and to provide for their working here to be comfortable.

Their expectations are demanding of us. They may also be unrealistic (in that, for

example, they might expect always to be stimulated and to be progressing).’

All of these conditions lead to producers ‘feeling entitled to act as though they are

beyond convention, procedure and rules. They are naughty, badly behaved in respect of

procedures’. There is a sense in which traders and sales staff consider themselves

above the law.

Turnover among traders, sales staff and researchers is not high. Some turnover is

expected as people progress their careers internally and externally. Last year, across

the departments, the average turnover was 20 per cent. Turnover is lowest (at ten per

cent) in the Equities Department.

In respect of staff groups, turnover is highest among middle managers; in effect, they
‘move out to move up’. A proportion return ‘provided they have been good leavers’.

Their return is seen to benefit the business; they bring knowledge and experience from

competitors.

Managers’ frustrations frequently derive from their ambivalence about, and lack of

preparation in managing people. Most are promoted internally because they are

successful producers. Most also continue to produce and prefer this aspect of their

role. Some have little or no interest in, or skill for managing their teams. One particular

consequence of this is that problems with poor or difficult performance are not

addressed and under-performers consistently receive bonuses similar to their peers.

These problems become more entrenched until the manager brings them, as ‘the final

straw’, to HR. For HR this is often too late to improve relationships and address

performance issues.

There are employees who are frustrated. Their frustrations derive from their having

unrealistic expectations of work (for example, that work is constantly stimulating)

and/or from their feeling that their performance is being under-rated or under-rewarded
compared with their colleagues.

Work-life balance

To a significant proportion of the workforce, the notion of work-life balance is

antithetical. For some, the rewards for the long hours and the pressure are so

considerable as to outweigh the costs of these to their lives outside work. For others,

when compared with work and its rewards, they simply do not value life outside.
The working environment is recognised as being stressful and pressurised. Views about

whether this is ‘good, bad or indifferent’, and ‘who has what responsibility within it’,

however, are points about which opinions are divided. Given the global nature of the

business, most believe that long hours are a necessary part of the work process (ie that
work cannot be organised differently). This results in considerable pressure on

individuals. Newcomers, for example, are pressurised to sign an opt-out of the Working

Time Directive.

This said, the consequences of long and pressurised hours have recently caused some

concern at a very senior level within the organisation. The concern has resulted from

the vast amounts paid in compensation to the ‘handful of stress cases’ for lost

earnings, etc. Human Resources and Occupational Health have been enlisted to plan a

programme to better support and so prevent long-term absence and thus reduce the

potential for compensation payments.

One department (a Trading Floor) has recently seen the emergence of job-shares as a

positive model for managing caring responsibilities alongside this highly demanding and

rewarding work environment. Compared with other models of working reduced hours,

this arrangement has ‘built in cover’ which made it acceptable to the floor manager.

The costs and benefits of this model are discussed in a later section. Additional points

are worth emphasising here.

The job-share model arose out of a female employee wanting to work reduced hours

to enable her to spend more time with a young child. Experience of this and three

subsequent job-shares has, on balance, been successful for the manager of the
floor, and for the job-shares.

The model comprises one job-sharer working the first half of the week and the other

working the second. They are expected to ensure effective handover one to the

other and to ensure that the manager only needs to communicate with the

individual working at the time.

Both men and women work in job-share pairs. All of the job-shares have centred

around childcare and other caring responsibilities. Job-shares for other reasons

(such as to pursue an interest outside work) would not be sanctioned.

Critical success factors have included: (a) good communication between the job-

sharers and their manager, (b) the job-sharers spending unpaid time at home the day

before they start their ‘half of the week’ catching up and preparing to come in and

hit the ground running, and (c) the company having ‘the final say’ on job-share

partners.

Unresolved issues relate to the following questions: (a) How should job-sharers’

performance be rewarded when performance depends on both of them but rewards

in the rest of the company are individually-based? (b) What happens when neither

job-sharer is available to cover for the other partner? Covering job-sharers has

caused some resentment among team members; they regularly forget that each is

working part-time and earning accordingly, rather than being rewarded for work that

full-timers are doing in their absence.

Policies related to absence

Following a recent merger, absence policies have changed. Those active within the

newly acquired business have been adopted throughout the group (Table 2).

In practice, policies are used as ‘more of a guide than a bible’, this is illustrated by

those relating to sickness absence. The specified steps for notifying, recording and

monitoring unplanned sickness absence is as follows:

1. The individual calls by 10.00am on the first day of their sickness absence to notify

that they are sick. They make an effort to speak with the Absence Controller.

Table 2: Policy examples

Comparison with the
statutory minimum

Paid or not

Contingencies

More (SSP plus discretionary

payment)

Paid

Discretion of manager plus dependent

on length of service and duration of
sickness

23 days per annum

Paid

None

To be taken from annual
leave

N/A

Outside working hours

Discretion of manager may allow leave
within working day

5 days per year and this

includes compassionate
leave

Unpaid

More days may be negotiated with line

managers as unpaid annual leave

29 weeks with discretion for
unpaid leave to total 40

weeks

Paid + discretionary

Length of service (must have 1 year
continuous service)

Colleagues are obliged to take the call and pass the information to the Controller

should this not be possible.

2. The Absence Controller notifies the Desk Manager that the individual is sick.
3. The Desk Manager decides whether or not to organise cover.
4. The Absence Controller enters data relating to the absence onto a database, which is

linked to the payroll database.

5. After two weeks continuous absence, the Desk Manager informs the HR generalist

with whom they are ‘teamed’ and together they plan how to manage the absence

from that point on.

6. The Desk Manager may involve Occupational Health.

Practice tends to fall short of these policies in the following respects:

Recording of absence on the database by the Absence Controller is inconsistent

and, when recorded, it is variable in its accuracy

Recording by Absence Controllers is not well ‘policed’ by the Desk Manager, or by

Absence is not monitored by Desk Managers: ‘most are a couple of days at the

most, so we cope and expect to see them back very shortly’

Desk Managers therefore tend not to report patterns of absence that may be a

cause for concern (eg frequent one, two or three days absence, and extended

absence)

In addition, HR generalists tend not to police data and line managers well

Finally, individuals’ fitness for the job is not well monitored, such that individuals

may be present in work but sick, or disengaged, or struggling.

Pattern of absence

Recruitment practices indicate the bank’s caution about problems relating to sickness.

Patterns of leave in previous jobs are explored in a pre-employment health interview

with Occupational Health and, for example, patterns of ad hoc days notified to HR.

Sickness absence is largely self-regulating. This is attributed to the extraordinarily high

rewards and the macho and long hours cultures:

‘Most understand that being off sick means compromising your bonus, and not

promoting your own performance. Most accept that if you’re not contributing for

whatever reason, you can’t expect to reap the same level of reward. Yes, the hours

are long and the work demanding, but we are rewarded for it. If you don’t like the

demands and the hours, then find nine to five work elsewhere.’

There is a small but increasing number of what HR practitioners refer to as ‘stress

cases’. These are employees who are on long-term sick leave with work-stress-related

difficulties. The number of such cases is reported to have increas ed in the last few

years. Five years ago there were maybe two or three cases across two large
departments. In the last year there were five or six cases.

In this context, HR and Department managers interpret most sickness absence as

signifying a problem with the individual’s motivation. Performance issues are perceived

to accompany motivational issues. Occupational health practitioners consider that

employees might also feel disenchanted with their manager and/or bored with their

work.

For the minority who regularly take short periods of sick leave (and there are issues

about their performance, commitment, etc) these issues are confronted and ‘decisions

made’. They may, for example, be encouraged to explore options elsewhere. For

reliable and valued staff, ‘more slack will be cut’ around odd days off here and there.

Levels of planned leave are also low. This is manifested, for example, in many not
taking their full annual leave entitlement, in women returning early from maternity

leave, and few requests for paternity leave. Again this is attributed to employees’ fear

of losing out on rewards. A further pressure that sometimes militates against women

taking their full maternity leave derives from the attitudes of their male colleagues.

They are reported to regard maternity leave as ‘proof’ that women have the softer

option at work.

Male employees are showing some interest in other forms of planned leave, in

particular, job-related training (eg MBA), and working shorter fortnights. Training has to

be relevant to the immediate post. Study time and funding are largely at the discretion

of the line manager and are largely determined by their perception of the individual’s

value to the business.

As discussed, in terms of flexible working arrangements, job-share is emerging as a

working arrangement favoured by men and women with caring responsibilities. It is

also becoming more acceptable to managers.

Line managers are pivotal in managing planned and unplanned leave. Operational

Managers are clear that there are circumstances in which absence (planned or

unplanned) are, by definition, a problem; this is when knowledge and skills cannot be

substituted. If few producers share the same knowledge, then any absence will be a
problem. For example, if one of the two trading and sales staff dealing with new and

developing markets is off, it is a problem for colleagues and the Desk Manager to

cover. By contrast, if one of the 12 trading and sales staff on a well established desk

(eg Japan) is off, this is less of a problem because there are plenty of others who can

substitute their knowledge and skills:

‘On the new and developing desks we manage the best we can within the

teams. There isn’t the substitutability in this type of work; there may be no

one with the relevant knowledge or skills. Also, the client may not want the

relationship change. We do the best we can and we make do. This is not

necessarily satisfactory and sometimes it can become a pain for the

individual covering.’

Cover arrangements

All producers’ absence is covered by the same arrangement; they are covered by a

back-up account holder who is nominated when the account is allocated. The group is

sufficiently well resourced to permit this double-teaming on a permanent basis; ‘we are

fat enough’. Back-up account holders cover both planned and unplanned absence. In

principle, all accounts should have a nominated back-up account holder. In practice, the

larger and the higher profile accounts definitely will.

Reflecting their different roles within the business, absence among support staff are

covered differently. The duration of the absence determines the cover arrangement

used. Temporary cover by external agency staff is arranged if the absence persists for

over a week. Given the time managers have to spend briefing temps, formal

arrangements are not made to cover absence of less than a week. In these instances,

priority tasks are either absorbed by colleagues or left undone.

Non-financial costs and benefits

Interviewees readily identified both costs and benefits to absence.

Costs

Opportunity costs of all absence are the most difficult costs; participants were

unanimous in this view.

Entrenched and long-standing problems developing if individuals’ distress goes

unnoticed. This can incur significant financial and non-financial costs for the

business and for the individual concerned. Unnoticed problems related to absence

can cumulate to serious, complex and entrenched problems with well-being and/or

performance, which is more costly of HR and Occupational Health time to resolve.

HR interviewees described how ‘it’s often too late by the time we work out that
there is a problem. We haven’t been told and we don’t ask and so it (the problem)

goes on’. For HR, ‘too late’ meant either that the individual is pursuing legal action

against their employer or that their problems are compounded and entrenched, and

thus more difficult to address.

Different groups experience different costs associated with their own absence. The

cost to producers is an opportunity cost. Colleagues will take the accounts-related

work coming in and they will lose out on those opportunities and their associated

rewards. The cost to support staff (such as HR practitioners) is an increasing workload.

Work continues to come in during their absence and is not picked up by colleagues.

Thus, whilst support staff are off sick from work, their workloads will have increased.

Benefits

Extra efforts while providing account back-up will be rewarded with an increased
bonus. Irrespective of whether the absence was planned or not, the extra efforts

that colleagues put in to ‘buddy’ for an absent colleague will be rewarded by an

increased bonus at the year end.

The opportunity to show what you can do. Colleagues’ absence can be used as

development opportunities and so improve the profile and positioning of buddies.

Benefits of job-share arrangements between traders were identified as:

•

Retention of good quality people, especially women

•

Investment for the future in terms of the individuals’ likely return to working full-

time

•

Satisfied customers

•

Satisfied traders.

Emerging themes

Key themes emerging from this case study include the following:

With the level of rewards achievable within this business, sickness absence is

largely self-regulating.

Most sickness absence is interpreted as reflecting motivational and possibly

performance problems.

This said, the recent increase in the number of long-term stress-related absence,

and the threat of associated compensation claims, is causing significant concern

among company directors.

There is a clear circumstance in which any absence is considered a problem: when

there is no one else, or few others, with a sufficient knowledge and skill base to

cover. Thus while relationships with clients are generally regarded as critical to the

business, there are circumstances relating to absence in which knowledge and skill

substitution are at a premium.

In spite of the financial and other benefits associated with buddying other

producers’ absence, colleagues and managers are not keen on covering for one

another.

In practice, recording, monitoring and managing absence is patchy and reveals

oversights by all of the Absence Controllers, Desk Managers and HR. A good

working relationship between HR and line managers is essential to their

effectiveness.

Job sharing is emerging as a practicable and positive model for maintaining

presence and performance at work and meeting domestic commitments. Costs to

the salary bill are rebalanced in year-end bonuses. Successful traders have been

retained, and customers are satisfied with the arrangements. Effective

communication is essential and largely the responsibility of the job-sharers;

managers ‘only want to have to deal with one of them’.

Summary of data sources

Interviews with:

Diversity Manager

HR generalists

Managing Director of the Trading Floor

Vice President of Equity Business Management

Senior Occupational Health Nurse.

Other:

Absence policies.

NHS Trust case study

Business background

The Trust provides community, rehabilitation and mental health services to a population

of 300,000 in a mixed urban/rural area.
The Trust has grown in recent years and this growth is continuing. The last year, for

example, saw a 2.65 per cent increase in the income received to approximately £70

million. This said, pressures on funding are considerable and include the costs of this

year’s pay awards, costs of the EU Working Time Directive, increased employers’

pension contributions and the need to implement the government’s modernisation

agenda.

Central policy developments currently exercising the Trust are the New NHS Plan, the

National Service Frameworks and the Caldicott report on protecting the confidentiality

of patient information.

New senior managers have been appointed. Their leadership styles are reported to be

more progressive than those of their predecessors and to have improved the culture of

the organisation.

Work organisation

The types of service provided by the Trust varies considerably and includes all of in-

patient, out-patient and community-based services.
Services are also geographically spread. The minority of services are provided from a

general hospital base: most are provided from community settings. The personnel and

administrative departments are based at the general hospital site. This physical

fragmentation makes it difficult to achieve the level of communication necessary to

implement the large number of changes to the organisation, delivery and management

of services required by the modernisation agenda. Monitoring the quality of clinical

practice is, for example, difficult for managers: seeking the support of managers for

their clinical decision making is difficult for practitioners, and communicating changes

in policy and practice to operational managers is difficult for personnel practitioners.

Additional constraints on the work process are imposed by:

Health economics: an efficiency of two per cent was agreed for the last financial

year

New policy priorities, including the National Plan and the National Service
Frameworks

Increased involvement of service consumers and their carers in care delivery and

decision-making.

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Customer demands

Both the number and type of customers’ demands have increased recently. The

numbers of patients presenting to all services continue to increase, to the extent that:

‘Rather than thinking about whether volume increases, we now need to think

in terms of how much volume increases and for which service is it increasing

the most.’

Patients ‘expectations have also risen. Patients are more vocal and critical about the

quality and acceptability of their care. They are also more interested in and assertive

about being involved in decisions concerning their care.

In this respect, groups of patients vary in their needs for support:

‘Some users of mental health services are, for example, able to self-advocate

perfectly well. Others will need support and input to do so. Putting systems

in place to ensure this is no easy matter. As well as their key workers for

example, this might also include an advocate, a fellow user, their carers, etc.

Even logistically, enabling these inputs to a case conference, for example, is

something of a headache. Then we must ensure that each of their

contributions are heard and valued.’

Workforce issues

The majority of Trust staff are women. Most employees are between 30 and 40 years

of age. Very few are under 25 years of age. The majority (70 to 80 per cent) work

shifts.

Staff attitude surveys indicate that, on the whole, employees trust the Trust to ‘be a

fair employer’ and to ‘work hard to ensure a healthy balance between their work lives

and their home lives’.

The following recent efforts to increase support to clinical practitioners have been well

received:

Line managers have been trained in people management skills and encouraged to

adopt a supportive and co-operative approach (‘rather than a macho, control-

dominated style’)

The entitlement to supervision has been extended to all practitioners who have
face-to-face contact with service users (ie irrespective of their grade).

Main sources of pressure for practitioners are consistently described as:

Under-staffing of services

Increases in the number of patients needing care and their increasingly diverse

needs

Their own and colleagues’ low morale, stress and burnout

The pace and scale of changes in health care delivery, organisation and

management.

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Practitioners’ commitment to achieving positive outcomes for patients’ care is high.

However, agreement about standards for, and skills in providing customer service vary.

Thus staff reactions to the Trust’s introduction of a Customer Service Achievement

Award have been mixed.

Levels of skill substitutability vary considerably (in particular, with role and grade).

Work-life balance issues

The Trust has committed to providing a positive balance between employees’ work and

lives outside. The personnel strategy pledges to:

‘Treat each member of staff as a person with a complex set of needs all of

which are important in work and in life.’

In the form of ‘Family-Friendly’ initiatives, work-life balance policies were first

introduced eight years ago. Enhancing retention was their main driver, and data

collected to inform Long Service Awards suggest that they have been successful.

New work-life balance policies were agreed with the Joint Staff Committee, and are

now being advertised at road shows at Trust sites. The major change is a shift in

emphasis away from staff with young children towards leave which any member of

staff can take. This leave might be to care for someone else, for a domestic emergency

or for a career break.

It is hoped that these revisions will assist in addressing long hours cultures, levels of

work-related stress and in further enhancing retention.

To encourage consistent implementation of these policies throughout the Trust, line

managers are receiving mandatory training.

Policies relating to absence

Formal written policies relate to:

Sickness absence

Maternity leave

Paternity leave

Parental leave

Emergency leave

Carers leave.

Most provision exceeds the statutory minimum entitlement: ‘We extend provision

where we can’. For example:

If both partners work for the Trust, maternity leave may be shared; that is, some of

the leave can be allocated from the mother to her partner.

Paid paternity leave has been available for some years now. Additional unpaid leave

may also be taken at the discretion of the individual’s line manager.

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Pattern of absence

In a successful response to targets imposed by the Department of Health, sickness

absence levels have been halved since 1998. In 1998, the Trust-wide average level

was just over three per cent. While this was below the NHS national average and

below averages reported by other Trusts in the area, a maximum of six per cent had

been recorded and associated costs were felt to be unnecessarily high. Now however,

the average level is relatively stable at just over two per cent.
Variations in average levels were explained in terms of seasonal fluctuations. Dramatic

increases were experienced in the winters of 1998 and 2000, attributable to the ‘flu

epidemics in these two years.

Also, average levels of sickness absence vary widely between different departments.

Records for September 2000 for example, indicate that while only one per cent of the

Business Analysis Team’s contracted hours were lost to unplanned sickness absence,

almost ten per cent of the Board of Directors’ and almost 20 per cent of Customer

Services’ hours were lost to sickness absence. Levels also vary between Directorates.

The Primary Care and Child Health Directorate experiences the largest share (50 per

cent) of sickness absence across the Trust and the Mental Health Directorate (42 per

cent) only slightly less. Thus most sickness absence is concentrated within these

Directorates.

In terms of changes in patterns of planned leave, the most notable change is a recent
increase in the numbers changing from working full-time to working part-time.

Compared with two or three years previous for example, a number of teams of health

visitors now have no full-time staff. With the introduction of the new policy promoting

work-life balance, more interest in part-time working is anticipated.

Levels of other forms of planned leave, such as for training, are fairly low and stable.

Cover arrangements

Arranging cover for unplanned absence (such as sickness) exercises service managers

far more than does cover for planned absence (such as maternity leave).
All services have a number of cover options and deploy these different options at

different times and under different circumstances. As a rule, as the cumulative impacts
of the absence/s mount, different cover options are deployed. In-patient services have

different cover options than do community services: in in-patient services (such as

some rehabilitation services), the same cover arrangements are made during the

weekend as during the week. These are as follows:

Immediate response: immediate colleagues absorb priority tasks

Second stage response: bank, agency and/or other sources are pursued. Other

sources include cover by the individual’s line manager and moving a peer from

another part of the service. Fixed-term secondments from other services have been

successful.

The second stage response is initiated when the operational service manager considers

that colleagues cannot sustain their cover for absent colleagues.

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In community-based services (such as health visiting), cover arrangements for the

weekend are different from those arranged during the week. During the week there is a

four-stage response.

Immediate response: a nominated ‘buddy’ co-worker absorbs priority tasks.

Caseloads are held by teams not individuals, so while each user of the service has a

nominated contact within the team, their care is the responsibility of the team.

When the contact practitioner is nominated, so too is a buddy. Thus when the

contact is sick, the buddy provides cover.

Second stage response: a neighbouring team also provides cover. When levels of

cover are not sustainable within the team, the resources of a neighbouring team will
be drawn upon. This means that practitioners of both teams will be called upon to

address the caseload priorities of both teams.

Third stage response: a co-operative group of four or five teams within an area will

collectively pool their resources to cover. This means that practitioners’ resources

from all teams within the co-operative will be used to address caseload priorities

across all the teams.

Fourth stage response: the district wide ‘sweep’ team. This is a team of highly

trained staff whose numbers can be increased or decreased to match prevailing

demands. Numbers have been highest during the ‘flu epidemics noted above and

during school holidays. As they are highly trained, staff can absorb both specialist

and routine tasks. Staff self-roster to this team.

During a weekend, work is allocated at the level of the co-operative. This includes

organising cover for absent colleagues from all the teams. As described above, the co-

operative is a ‘virtual’ unit working within a discrete geographical area and comprises

several teams’ practitioners and their priority tasks.

Regarding the point at which absence becomes a problem, if the third stage response is

being used to cover weekday absence, service managers consider that service delivery

is being seriously compromised:

‘This I might call a crisis in the sense that I wouldn’t want to see it



co-operative level working

- continue for any real length of time.’

The four-stage response has been developed within certain services over the last two

or three years. It was motivated by the changes in the pattern of absence noted above,

namely:

Increased interest among certain groups of hard to recruit practitioners (for
example, health visitors) wanting to work reduced hours, ie increasing their planned

leave

Increased sickness levels among certain staff groups in certain services, and at

particular times of the year.

While the staged response arrangements are still relatively new and bedding down,

keys to their success have been:

Initial implementation within a ‘friendly’ area to serve as a demonstration to teams

in which ambivalence is anticipated to be higher

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Responsibility for client care being shared within a team (rather than by individuals)

Effective communications among team members, and between team managers and

senior managers (for example, in deciding when to switch between responses)

Common and shared electronic systems to record individuals’ workloads, team

priorities and leave entitlements.

Further work remains to be done on increasing the extent to which decision-making is

based on up-to-date and accurately recorded data from frontline practitioners.

In terms of managing unplanned sickness absence more broadly, other changes have

been important in reducing average levels across the Trust. For example, any sickness

absence is met with a back-to-work interview with the line manager. The interviews
have three purposes, to check: that the individual is sufficiently fit to be at work;

whether more support is necessary to manage the return to work; and whether the

sickness was genuine.

In addition, a specific baseline ‘promise’ was introduced: if there is no evidence to the

contrary, line managers must treat sickness absence as genuine. ‘Evidence to the

contrary’ would, for example, include the individual on sick leave being seen out

clothes shopping. If there is evidence to the contrary then the procedure is for the line

manager to make a written report, and personnel to take over investigation of the

absence.
Critical success factors in developing policy and practice to successfully reduce levels

of unplanned sickness absence have been:

Analysing the costs of absence and sharing the results with the Board. This meant

that sickness levels ‘became an organisational issue, not just the responsibility of

personnel, or line managers’

That the proposed changes to management practice were ‘consistent with more

macro changes’ in style of top leadership of the organisation, and leaders’

understanding of the importance of employees’ active and positive engagement in

delivering performance targets

Mandatory training in sickness absence management for all operational managers.

Non-financial costs and benefits of absence

Participants identified both costs and benefits to absence. Different costs and benefits

were associated with different types of absence (un/planned) and for different

stakeholders.

Costs
In respect of unplanned absence, participants were clear about the potential costs for

both clients, and for colleagues and managers.

Clients may experience problems with the quality of their care: they may find it

more difficult to trust and communicate with a practitioner they know less well and
similarly, the practitioner may misinterpret signs and triggers to changes in their

condition

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Colleagues may experience increased stress and pressure as a result of

unanticipated increases in their workload, and relative unfamiliarity with clients

Colleagues and managers must spend time negotiating and reallocating work

priorities.

Participants were similarly clear about the non-financial costs of increasing proportions

of the workforce taking more planned leave (for example, working reduced hours, or

job-shares), including:

Increases in the number of people to be managed

Increase in demands on infrastructure, eg office space, telephones, PCs

Increases in demands for supervision and training time for managers

Working out handover and other communication systems, and the costs of mistakes

as these systems are bedded down and improved.

Benefits

Only one possible benefit of unplanned absence was cited. Taking over colleagues’

responsibilities might provide development opportunities and the opportunity to

increase their profile within the team. For some practitioners, this was felt to offset the

costs of unplanned absence to some extent.
By contrast, participants attributed many more benefits to planned absence such as

working reduced hours.

Working reduced hours can ‘buffer’ practitioners against the effects of the constant

stresses and strains of clinical work.

Practitioners who are content with the balance between their work and their lives

are generally more committed and engaged when they are at work. Thus services

are staffed by more satisfied staff:

‘If we treat the relationship between the employee and the employer as a

transaction, and do our bit, then the organisation benefits from the

individual. And at the individual level, for example, they are more willing to

take forward work based projects so that we all benefit.’

Practitioners are glad to be committed to the organisation and thus more likely (a) to

stay and (b) promote the Trust as a good employer.

‘Our staff are our ambassadors. They will rate us as employers if we are

flexible and positive about their lives outside work, and if these are the

views they express then we will be seen as good employers.’

Cover may provide career development opportunities. Fixed-term secondments, for

example, have been used to ‘cover’ for longer-term absence and may provide

welcome career development opportunities.

Service configurations can also be more flexible, as recent policies require. A high

proportion of practitioners working non-standard hours permit more flexibility in the

configurations of services offered, thus responding to current policy pressures to

provide services ‘out of hours’ and ‘when patients need them’.

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Emerging themes

Key themes emerging from this case study include the following:

Unplanned absences cause more problems than do planned absence, especially:

•

In services in which high proportions of practitioners have opted to work

reduced hours

•

And/or services are staffed by ‘hard to recruit’ practitioners (for example, groups
among which there are national shortages)

•

And/or at times when service sustainability is already threatened for example, by

the winter ‘flu epidemic, and during school holidays.

Cover arrangements deployed in different services are both similar and different.

•

All services have access to more than one cover arrangement. In-patient

services, for example, immediately arrange internal cover and only if the
absence persists, will bank or agency replacements, or the possibility of an

internal move or a secondment be considered.

•

In all services, these arrangements are staggered to respond to the severity with

which the absence/s are impacting on staff, clients and on service delivery.

•

In all services, the immediate response is to cover internally by a colleague
absorbing priority tasks.

•

Cover arrangements are most complex in community-based teams in which

working reduced hours is high and certain staff groups continue to be hard to

recruit. Considerable flexibility has been built into arranging weekday and

weekend cover, including a ‘sweep team’ of highly trained practitioners whose

numbers can expand and contract according to district-wide demands.

Average levels of unplanned sickness absence have successfully been reduced and

maintained at approximately two per cent for the Trust. Levels vary considerably

however, between Directorates and between services within them.

New sickness absence policies and procedures include:

•

Return-to-work interviews following all and any sick leave

•

Managers being required to treat the absence as genuine in the absence of

concrete evidence to the contrary.

Line managers are recognised as pivotal to the successful and consistent

implementation of positive absence management practices. They have recently

received mandatory training in managing sickness absence and in counselling staff

about new initiatives to encourage a healthy balance between their work and the
rest of their lives.

The proportion of the workforce working part-time and reduced hours has increased

in the last two to three years, especially among professional groups. This has

resulted in dramatic and innovative changes to working and cover arrangements.

This trend is anticipated to continue, especially among hard to recruit groups.

Participants were clear about benefits to the individual practitioner and the service,

and clients have not expressed dissatisfaction. But service managers were

struggling to manage the accumulated non-financial costs. They are anticipating

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that there may be a critical mass of planned leave within certain posts, and/or

certain teams, and/or at certain times of the year which cannot be sustained.

Summary of data sources

Interviews with:

HR Director

A service manager.

Documents:

Business Plan Summary

Newsletter for Trust employees

Policies relating to sickness absence and its management.

Documentation relating to application for Beacon Award for Best Practice.

School case study

Business background

The school is an 11 to 16 years comprehensive with just over 700 pupils on roll. It is

set in a semi-rural environment and, as such, has little major competition from other

secondary schools in the close locality. The proportion of students gaining five or more
GCSE at grades A to C has ranged from 50 per cent to 61 per cent during the last five

years.

The head teacher and senior colleagues have been instrumental in involving the school

in a local well-being project aimed at promoting staff health and minimising workplace

stress. This has involved a staff survey. The school has also achieved the Investors in

People (IiP) standard and been successfully reassessed.

Work organisation

The school is run by a leadership team comprising the head teacher, one deputy and

three assistant heads. One of the assistant heads is responsible for staffing matters.

Teaching staff are organised into conventional subject departments, with heads of
department having an explicit line management role.
Support staff work in a diverse range of roles (learning support assistants, technicians

etc.) and report to heads of department or to members of the leadership team.

All catering staff at the school are employed by an external contractor.

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Customer demands

External demands have become more ‘market-driven’ in recent years. The publication of

examination league tables and the rising expectations among parents (both current and

prospective) have further focused attention on pupil attainment.

Workforce issues

The school has over 50 staff: 75 per cent are teachers. Almost 55 per cent of teaching

staff are women. The majority of support staff are women. The school employs only

two newly qualified teachers (NQTs), both of whom work part-time. The head teacher

reported that he found a rift between teaching and support staff on his arrival at the

school which, he argues, has improved moderately. The staff survey which was

conducted as part of the wider well-being initiative showed a highly committed
workforce, with pockets of low morale.

The school has a relatively stable and experienced workforce, and has not been

seriously affected by staff shortages.

Work-life balance

The school follows the policies of the LEA in matters of leave, flexible working etc.

These policies tend not to go much beyond the statutory minimum. With specific

regard to work-life issues, the head reports, however, that he has more frequently been

exercising his discretion with staff during the last couple of years. He quoted two

examples for the purpose of illustration:

A member of staff reported that her husband was going on an extended business
trip abroad. She asked whether she might be allowed two days absence during

term-time to accompany him. While he would have been within his rights to refuse,

and knowing that internal cover would need to be organised, the head agreed to

two days’ paid absence. He judged that his colleague would feel valued by this

gesture and would return from her trip reinvigorated after a pressurised term.

Another member of staff asked if he could travel to India on an international

exchange visit. The trip straddled both term time and holiday time and would mean

a week of unpaid leave. The head judged that the disruption caused would be

merited given the professional development opportunity it represented. Since his

return, the member of staff has maintained links with his contacts in India and has

been able to enhance aspects of the curriculum (eg teaching material, a series of

school assemblies).

The head takes the view that selective use of discretion, as in these examples, can

significantly improve morale among those who benefit. He reported that he was

especially aware of the need for consistency in these matters. His view was that the

performance or market value of an individual was less of an influence on his decision to

exercise discretion than the previous attendance record of the individual.

Policies related to absence

The school adheres to the policies laid down by the Local Education Authority (LEA).

These set out the staff notification procedures for sickness absence, professional

109

development and school visits. It specifies that work should be set for all classes being

missed.
In addition, the policies make explicit provision for:

Paid time off for public duties (eg as JPs, school governors etc)

Membership of reserve forces

Trade union duties

Bereavement

Compassionate leave

Maternity and paternity leave, and

Travelling difficulties in bad weather.

Patterns of absence

Absence generally fall into the following categories:

Sickness (self)



they believe that a higher proportion of sick leave than in previous

years is due to stress-related illness

Sickness (dependent)



it is considered entirely acceptable to take time off to care

for an ill child or other relative. Staff report their absence in this way and it is seen

as legitimate. Both male and female staff use this category of absence

Professional development



teaching staff occasionally attend off-site training

events, usually lasting no more than a day

Maternity leave

Time off for trade union duties/training

Medical/hospital appointments (when these cannot be taken out of school hours).

There is no absence due to annual leave.

Data covering the last six months’ absence patterns was provided. It showed:

A total of 99 days absence

All were attributable to sickness. (Absences for other reasons are not recorded.)

One period of absence of 41 days for one member of staff skewed these data

considerably.

Cover arrangements

The Assistant Head Teacher with responsibility for staffing issues takes direct

responsibility for organising cover. She reported that this activity took up 80 per cent

of her non-contact time. This represents about 25 per cent of her total working time.
The core procedures for organising teaching cover have evolved over time.

For absence up to and including three days, internal cover is always organised.

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For absence over three days a supply teacher is brought in, always from a list of

supply teachers with whom the school has previously worked. The Assistant Head

(staffing) has a range of different options here. Some supply teachers have subject

specialisms, and can be used accordingly. Some can come into school at very short

notice, others need several days advanced warning. Some supply teachers can

deliver material in lessons they cover, others do no more than supervise the class as

they do work set by the absent teacher.

External supply teachers are always used to cover absence due to off-site training.

All supply teachers go through the school induction procedures



it is important

that they are exposed to the culture and ethos of the school.

Internal cover is organised by ensuring that all teaching staff have a 30-minute slot

in their weekly timetable when they are available for internal cover. In addition,

three members of staff have spare capacity as they do not have full teaching

timetables. They are expected to contribute additionally to this ‘bank’ of internal

cover.

The Assistant Head who organises cover is busy with these issues every day. She feels

it is important that it is done by a senior member of staff



considerable ‘arm-twisting’

and negotiation is required, and only someone with status has the authority to make it

work. She also feels that a good overview of the school, and a knowledge of the styles

and preferences of both staff and pupils is also important. She regrets not having time

to:

1. Check on the quality of the supply teachers by observing and monitoring them

periodically

2. Conduct return-to-work interviews with all staff who have been absent through

sickness.

Her strong view was that unplanned absence was significantly more difficult to manage

than planned absence. Line managers (heads of department) agreed with this view.

From their perspective, the main cause for concern was to ensure that their staff got

opportunities for professional development, and that pupils were not disadvantaged by

long periods of absence.

The view from teaching staff themselves was that they all had to rely on each other to

cover for absence. As a result, they realised that being willing to cover for a colleague

increased their chances of having any of their own absence covered. One teacher noted

that she had wanted to attend the funeral of a close friend, but decided not to go
because of the disruption it would cause to her colleagues. However, she received

three independent offers to cover her lessons for her from already hard-pressed

colleagues, and was able to attend the funeral.

Teachers had the following wider observations on the issue of cover.

Most said they felt very guilty about being absent for whatever reason. They knew

that any absence on their part would lead to inconvenience and extra workload for

a colleague.

Planned absence was much easier to deal with. If you knew you were going to be

absent, it was possible to set work for your classes which would minimise the

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disruption (eg need to explain subject matter, use of resources materials, changes

to class layout etc.) for the colleague. If a supply teacher was covering absence,

however, they were less inclined to be so sympathetic



their view was that the

supply teacher was being paid, and why should they make life easy for them?

Cover for long-term absence (eg long-term sickness, maternity leave) required cover

from supply teachers or staff recruited on a temporary contract (usually maternity

cover). This required liaison between the absent teacher (or head of department)

and the supply teacher or colleague. Schemes of work and planning



especially

for pupils studying GCSEs needed to be followed in order to minimise disruption.

This is a key qualitative consideration when organising cover.

While some years ago the obligation to cover had led to some resentment among

staff that they were having to support colleagues with poor health or with childcare

needs, the staff reported that this resentment no longer existed. The head teacher

noted that the process had reinforced a strong sense of mutuality in the school and

had positively affected the culture.

Routines for organising cover in the school are, therefore, reasonably well established.

While planned absence is more readily dealt with, the process for organising cover is

quite time consuming and complex.

Non-financial costs and benefits

Staff at all levels had clear views on some of the costs and benefits of managing

absence. Here are examples of those they identified.

Costs

Staff were able to identify a number of areas where absence led to non-financial costs.

Absence disrupts continuity for pupils: several teachers expressed concern that it

took them some time to settle their classes into what they call ‘my way of doing
things’. Thus, classroom behaviour, seating positions, aspects of classroom

organisation etc. are key aspects of class management. Once this is disrupted by

even relatively short periods of cover by another teacher (however competent), it

can take time to re-establish. This can result in some pupils ‘treading water’ and

losing valuable time on some topics, which they struggle to make up. In exceptional

circumstances (eg if short-term cover cannot be organised) the school has split

classes and made them join existing classes for certain lessons. This is felt to be far

from ideal and can be very disruptive for some pupils.

Absence impacts negatively on pupil attainment: a view shared across the school

was that the performance of some pupils (or even whole classes) can be adversely

affected by extended periods of cover by a stand-in. Several examples were quoted

of classes whose teachers were on maternity leave, performing less well in SATS or

GCSEs (despite competent cover).

Quality of cover is variable: it was generally felt that newly qualified teachers

(NQTs) were more susceptible to short-term sickness absence owing to the fact

that they had no built-up immunity to a range of infectious illnesses. Also, if an

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NQT covered the class of an absent colleague, they were generally less reliable as

they had greater problems managing heavy workloads (providing cover eats into

pre-scheduled non-contact time).

Benefits

A number of benefits to absence were also identified:

Despite the disruption, staff benefited from opportunities for professional

development. They argue that off-site training gives them an opportunity to update

their skills, take on new ideas and recharge their batteries. Such opportunities are

also motivational, and demonstrate that they are valued by the school.

It was felt that providing cover for colleagues could also be developmental. As staff
tend to teach only in their own subject areas, it is considered helpful to see pupils in

another subject area and to see what work they are doing, how they behave, and

how classrooms are organised. Periods of cover represent the only opportunity for

teaching staff to broaden their view of what else goes on in classrooms other than

their own.

For line managers (heads of department), providing cover can supplement their

normal supervisory and observational roles when monitoring work in their

department.

Financial costs

The school was able to supply the following data:

The Assistant Head’s salary was circa. £34k per annum. Adding 18 per cent for NI

and pension contributions brings this to £40,120. As she spends about one-quarter

of her time managing absence, the cost associated with this activity is in the region

of £10,000 per annum.

The cost per day of bringing in a supply teacher (including on-costs) is £142 in

payment to the supply teacher. It does not include the employment costs of any

preceding internal cover. The school has an annual budget of £20,000 for supply

teachers which is always spent. This equates to roughly 140 days of supply each

year.

Staff identified a number of financial costs associated with covering absence. These

included:

Supply cover

Time of Assistant Head

Other management time

Extra time taken to set work in advance

Extra photocopying, and

Extra phone calls.

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An example

Two groups of pupils in Year 9 were studying the First World War in History. A day trip

to the war graves in Belgium had been organised. The Assistant Head had the task of

organising cover for the teachers accompanying the children.

This meant timetabling several classes with a whole day of cover. In practice, this

meant using both internal cover and external supply teachers. Absent teachers were

expected to set work for their classes and leave instructions or liase with those

providing cover. These arrangements had to be in place (together with a temporary

timetable) a week in advance of the trip itself.

Emerging themes

Key themes emerging from this case study include the following:

Unplanned absence causes most problems



classes must have adult supervision

and cover must be found, even at short notice.

Planned absence, while requiring organisation, is far easier to cover where an

existing routine or procedure can be used. The cause of the absence is less

relevant, though the duration can be important.

Pupil outcomes and attainment can be the ultimate casualty in cases of absence

(especially long-term absence).

A climate of trust and mutual support makes a significant difference to staff

willingness to cover for colleagues.

Guilt plays a significant part in the process of cover. Staff feel bad about the knock-

on consequences of their absence on their colleagues. This makes absence, up to a

point, self-regulating.

Summary of data sources

Interviews with:

Head teacher

Assistant Head (staffing)

Group discussions with:

Four heads of department

Five members of staff (one administrative member of staff)

Other:

Absence records

Costing data

Absence policies.

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Small Business case study

Business background

This is a very small dotcom company. It was set up in 1995 and was one of the earlier

companies in this area. They provide an Internet service to organisations in one

particular market sector. Internet based solutions are tailored to the need of the client;

this might involve designing a webpage or providing a web based service, which the
client simply uses and does not have to maintain in any way. They serve a niche

market and offer a distinctive service, based around building partnerships with clients.

Last year there were plans for rapid expansion. However, given the ways in which

Internet business is changing, and the recent fate of a number of dotcoms, these have

been tempered. Any expansion will be slow and controlled. There is only a certain level

of potential demand in the market and they are aiming to be realistic about the market

share they will be able to gain and maintain. Success is down to how hard they work,

how hard they focus, and aggressiveness in the marketplace.

Work organisation

Four directors run several small IT companies. One of these runs this company on a
day-to-day basis.
There are two teams: sales and programmers, with a small amount of administrative

support. There is considerable flexibility within each team and only a few specialist

roles. There is limited flexibility between the two teams. While programmers cannot

usually sell, it is even less likely that sales people have any programming skills. Some

flexibility does occur at the margins. For example, a programmer will help to close a

sale: sales people cannot get into technical issues, but can discuss the service provided

on a more general basis.

In both teams they try to have some overlap so if someone is off, others can pick up

their work. The programmers use the same software, but are working on different

projects. Covering a particular project might take someone half a day to understand it,

but they should be able to take it from there.

Customer demands

The firm operates in a rapidly changing market place. There is no time to sit back: three

months in this industry is felt to be the equivalent to a year in others.

The relationship with customers has changed. The company now tries to work on a

partnership basis with their clients. They advise on how to use the Internet as a tool for

the services provided by their clients, with clients bringing specific expertise of their

own markets. They are now more honest with clients about what is and what is not

possible. They are also aiming for a dialogue, so that needs and issues are understood

by both parties.

Workforce issues

The company has less than 50 employees, split into two teams: sales and

programmers. The majority are male and young. The directors are all working directors

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and will ‘muck in’ as needed. For example, directors had recently participated in

stuffing envelopes for mail shots, decorating their new offices and covering when

employees were absent.
The ethos of the company is very friendly and informal. They aim to foster respect,

encompassing the range of personalities in the company. Everyone is trusted and

treated with maturity.

People are expected to come in on time and do their job, but are left to their own

devices in doing the job. Performance is down to individuals. Help is offered if someone

is seen to be struggling, but people are also expected to ask for help if they need it.

Teamworking is very important.

Labour turnover is not very high, people who fit in tend to stay. The few, who do not

fit in, leave relatively quickly.

Work-life balance

Working hours are 9.00am to 5.30pm. A few people work longer hours, in particular

the Director and some programmers. The latter also tend to work a slightly different

pattern. They often work better at night, so they stay later in the evening and come in

slightly later in the morning. However, it was also reported that good sales people do

not work to the clock. They use working hours to make contact with clients, and time

outside this to do administration and background work.
The company is flexible in providing special and emergency leave. A young workforce
means that relatively few have children. However, those who do are allowed to take

time off, leave early or come in late, for example, to deal with emergencies and to go

to school events. This was felt to be part of a good working relationship. The company

recognises the commitment of employees and repays this through allowing reasonable

flexibility.

Time off to attend appointments with the doctor or dentist is given when necessary.

However, employees are encouraged to make appointments first thing in the morning

or late afternoon.

Policies relating to absence

Absence policy was largely a matter of custom and practice. Time off for domestic and
other emergencies was usually paid, although sometimes annual leave was taken. If an

employee arrived late or had to leave early for some reason, the hours were made up at

some other time. Directors have considerable discretion and many practices are based

on their personal experiences and attitudes. All the directors have children, and the

family responsibilities of employees are taken seriously. For example, a PA had

problems relating to her children and was allowed paid time off to deal with these.
There is no specific policy on paternity or parental leave. The only example of paternity

leave was that taken by a director. In this example the director organised his work to

ensure that the majority of essential work was completed before he went on leave and

the emergency tasks could be referred to another director to deal with. There were no

examples of parental leave being taken. In any case, the respondent felt that most

employees would not be able to afford to take unpaid leave.

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Of indirect importance is their approach to recruitment. Particular attention is paid

during the recruitment interview to the suitability of a person to the job, their ‘fit’ with

the company, and their attitude to work. There is also a clear induction process during

which health and safety, company rules and policies are explained. For example, on

sexual harassment employees are encouraged to talk to a director if they feel they are

being harassed. Essentially they try to address an issue before it can become a

problem.

‘Basically we want to keep people, it comes down to communication. You

have to be approachable and employees have to want to come to work.’

They aim for an open culture so that employees feel able to discuss problems with
management. Managers explain work related matters to staff: for example, if someone

is dismissed, the reasons for this are explained to all staff. A business option was not

followed through and a staff meeting was called to explain the reasons why.

As part of a more general approach, the company tries to motivate staff so that they

want to come to work. For example, there are sales incentives, and they aim to create

a good working environment. The company recently moved into a building on its own.

They are trying to create a distinct image as a dotcom business. A team spirit is

encouraged, so that people feel supportive of each other and work together.

Patterns of absence

During January 2001 there were only two days on which there was a full quota of
staff in the office. People were off with ‘flu, stomach bugs, back/leg pains. Around 20

working days were lost. It tends to be a few people who have a lot of time off. There

are a few individuals who will be absent at least one Monday a month. In recent years,

two or three employees have had extended periods of sick leave. One of these

employees had to take long-term sick leave due to an accident.
A senior manager expressed concern over identifying what is genuine absence and who

is taking advantage. Even if it is known that someone is taking advantage it is not easy

for an employee to do anything about it. On the other hand the company do not want

people who are really ill and struggling to keep going in the office; someone will be sent

home if this is obviously the case.

They are a young company in terms of company age and age of employees, and few

women are employed. Take-up of maternity leave has therefore been low. Indeed there

has only been one instance of an employee taking maternity leave in recent years and

this person returned part-time. Parental leave is rare. It was felt that most people could

not afford to take unpaid leave. One of the directors has recently taken two weeks

paternity leave.

Cover arrangements

The majority of absence is covered within the team. If a sales person is absent other

sales staff cover the work, and the same for programmers. They try to ensure that

there is sufficient flexibility in the skill mix, including less common programming skills,

so that if one person is off, someone else can pick up their work. The shorter the

absence the less difficulty there is in covering. However, any absence places a burden

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on other employees and is a problem. They have dealt with high levels of sick leave

amongst a few employees, and basically just made do. This can, however, mean that

business is lost and deadlines not met. No examples were given of temporary cover

being brought in.
One sales person was persistently absent, although at work occasionally. This person’s

work was split between the rest of the team, some covered her calls and others picked

up her visits. The Director himself took over a number of appointments. Where

persistent absence is a problem it is rarely due to sickness on its own, and a person

often has more deep seated problems. The individual and company either part by

mutual agreement, or an individual is let go. Managers try hard to resolve the situation.

Everyone tends to work longer hours to cover annual leave. This cover is less likely to

lead to resentment as everyone takes annual leave. They would like to take on five to

seven new people



to bolster certain departments and create a stronger platform for

taking the company forward. In practice this is not possible, so they have to ‘make do’.

Maternity and paternity leave are just accepted as something which happen: ‘Just have

to accept this. It is part and parcel of business law.’ However, as reported above, there

was very little taken in this company, so it was not a major issue for them. Maternity

leave can be covered by bringing someone in. Short -term paternity leave would be

covered by colleagues and/or the individual arranging their workload appropriately.

The Director who took paternity leave organised his work so that it was done or could

wait for his return. If a major problem appeared in his area of responsibility, this would

be picked up by another Director.

Both planned and unplanned absences create problems in coverage. There is no spare

capacity amongst the workforce and they operate in a tough, competitive marketplace.

Planned absence can be more easily coped with. For example, through forward

planning of activities and workloads. Annual leave is another form of planned absence

and again can be planned for to some extent. However, generally it just puts more

pressure on other employees.

Maternity leave is perhaps the easiest to cope with, as it is largely known and for a

longer period. However, their only experience of this was in an admin role, for which a

temporary replacement could relatively easily be found. Maternity leave in another role

would be more problematic. The options would be to try and cover with existing staff

or to bring someone in. Cover with existing staff places a burden on people who are

already busy. Finding people with the necessary skills who would be willing to take a

temporary contract would take time and not be easy. The types of people they recruit

are in considerable demand. It would also be an additional cost to the company.

Unplanned sick leave creates major problems for the company, as other employees

always have to cover. There was no clear view about the cumulative impact of

absence. The company had tolerated people with considerable levels of absence, for

example, one person had 48 days sick leave in one year, and 54 during the first third of
the following year. Basically, any absence creates problems when there is no spare

capacity and business is highly competitive. The odd day of sick leave is not considered

a problem. However, having at least one employee off most days means that they are

always having to make do and provide cover.

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Two examples

One employee was involved in a fatal car accident in which he was the driver. He was

allowed time off to recover and the company offered to pay for counselling to help him

get over the trauma. He had a very high level of sick leave in the first year after the

accident but the company tried to be flexible and tolerant about this. However, as time

went on the situation did not improve. His absence level increased and his reasons for

being off did not always ring true. He was also caught out, for example, being seen out

when supposedly ill enough to be in bed. The absence levels were not the only

problem. He was also regularly late for work, and this persisted despite a verbal and

two written warnings over a nine-month period. Managers tried to talk to him about all

these issues. Eventually he was dismissed for being persistently late.

A member of the sales team was consistently absent for a week at a time. Rather than

ring in at the specified time this person nearly always waited until later in the morning

when the director was often out and could not be spoken to directly. Rather than

produce a doctor’s note, a few days sick leave would be taken and the rest of the

week as leave. The work was covered as described above: various colleagues took

over telephone calls and visits. The director picked up a number of appointments which

had already been arranged. Eventually this person left the company through mutual

agreement.

Costs and benefits

Costs

In general it was felt that absence is purely a cost to the company. The costs of

absence were identified to arise in the following ways:

Absence has an impact on motivation, morale and team spirit. Employees who

consistently have to cover for the same individuals, in addition to a normally heavy

workload, begin to feel taken advantage of. This can lead to poor morale

Most SMEs work on a ‘just in time’ basis and they always work beyond their

capacity, so any absence is a cost, particularly in terms of missed deadlines and

lost business

Senior managers are often involved in providing cover, this can reduce the time and
energy available for addressing strategic issues.

Benefits

It was generally felt that there were no real benefits and that absence is always

detrimental to the structure of the company. However, two possible benefits did

emerge:

If people who are genuinely ill take time off work, there is less risk of germs being

spread to others.

Allowing people to take time off, for example, to deal with family problems, attend

school events and for personal appointments, is part of fostering good relations

with employees and can increase commitment to the company.

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It was to be noted that a sabbatical might be of benefit if someone needs a rest;

they will come back refreshed and with new ideas. However, this is not a practical

consideration for the firm. If others cover, this increases the stress on them; if

someone else is employed, this increases the cost to the company; if no one is

needed, the job doesn’t need doing.

Emerging themes

There is difficulty in ad hoc cover in a small business



absence always puts more

stress on others, including diverting directors from more strategic issues

If one person is absent, this represents a significant proportion of the workforce

In a highly competitive and pressured market a backlog of work cannot be allowed

to build up

Absence is addressed from a number of angles. While specific episodes of absence

will be dealt with on an individual basis, the overall approach to minimising absence
cannot be divorced from the general culture and employee relations within a

company

If people genuinely have problems and are valued employees, significant efforts will

be made to help them

Planned absence is easier to cover than unplanned absence.

Summary of data sources

Interview with director responsible for day-to-day running of the company.

Small Engineering Company case study

Business background

This is a sub-contracting engineering company which was set up by the two partners.

The business was set up with funding and guaranteed business from a customer’s
redundancy money and a loan taken out by one partner.
They make plastics components, operating in a niche market and the work is very

specialised. They are very dependent on the phone ringing and orders coming in but

also have a few regular customers.

Work organisation

This is very much a family business. The respondent’s wife works in the office, his

father and son worked on the shopfloor until his father retired and his son was killed in

a car accident.

The two partners take different responsibilities. One works on the shop floor, the other

deals with orders, estimates and the paperwork but helps out on the shopfloor when
needed.

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The majority of employees work on the factory floor. The work involves lathe and CNC

machinery. They aim to have all employees working on all the different machinery. At

the moment only about half are felt to have all the necessary skills. In such a small firm

they have to be flexible to ensure the work is covered effectively.

Two women work in the office, mostly on accounts



one full-time and one part-time.

Customer demands

They rely on companies contracting them to make components. The main change in

recent years has been from client companies holding less stock themselves, most

operate a JIT or Kanban system, and putting pressure on the supplier to hold stock.

They are carrying quite a bit of stock, but only for a few large and very reliable

customers.

The majority of their work is for other companies. Occasionally someone will ask if they

can make something for them individually and how much will it cost. The company
can’t make an effective profit on this type of work so he will usually pass it on to an

employee who can do it over the weekend. This is seen as part of having a good

relationship with employees.

Workforce issues

The business employs fewer than 50 people and the majority are very highly skilled

engineering machinists. A distinction was made between someone who is a good

engineer and someone who is ‘good enough to work here’. People can be taught to use

the machines but they have to have a gift to operate effectively. It is a matter of being

particularly sensitive to the machines and the material which is being worked with.

Heat is the enemy of plastic and any force will create heat. If a machine starts heating
up very slightly this can cause problems. The top machine operators all have this

sensitivity.
All engineers are encouraged to be flexible. They are expected to be able to use all the

machinery. There are a couple of young employees who have been sent to college as

well as being trained on the job. They were initially taught to use the lathes and

progressed to the CNC machines. Older employees have also had to be taught to use

the CNC machines.

The company has gradually expanded. There is no other company which makes similar

products in the area and many employees have been brought in as trainees. They are

put through a proper apprenticeship training including day release to attend college. He

sees it as part of being a socially responsible employer. There are no similar local

employers, and young people are given a broad base training so that they can find

employment elsewhere, if necessary.

Reasonable overtime is paid. The owners believe in paying a decent wage, rather than

employees having to rely on making up a minimum wage with overtime to obtain a

satisfactory standard of living. This has put the company in a slightly difficult position.

As pay has improved, employees are less inclined to want to work overtime. The

company uses overtime when it is very busy and has to rely on this at times.

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During the nine years they have been in existence, only three people have left from the

shopfloor: one through retirement, one was sacked and one left by mutual agreement.

The employment contact covers redundancy. They do not operate on a ‘last in, first

out’ basis but will keep those who are best at the job. As a small business they have to

do this



if they have to lay people off, there is no point laying off those who will help

the business survive.

At least 50 per cent of current employees are described as ‘top men’. The owners

would like them all to be at this level but it is not just a matter of technical skill. Those

who aren’t ‘top men’ are those who don’t co-operate: for example, they won’t

voluntarily be there when extra work is available; they are ‘not company men’.

However, no employees are seen as marking time.

The company runs an occupational pension scheme. This is having to be adjusted to

comply with the requirements of the new stakeholder pensions.

They are considering key worker insurance since the death of one key worker.

Work-life balance

The written employment contract addresses some work-life issues. For example, it

addresses parental leave. This is based on legislative requirements and emphasises that

such leave is ‘for the purpose of caring for the child.’ It also addresses leave for

domestic purposes:

‘The company desires to operate a policy of reasonable behaviour on this

issue and different circumstances will need different actions, if you have an

urgent need to go to the aid of your direct family please ask. It is your right

to reasonable unpaid leave in these circumstances.’

Annual leave is calculated on the bas is of one day’s paid leave for every 12 full days

worked. This works out at 20 days for full-time staff. Leave is worked out on the basis

of days worked to protect the company. For example, days taken as sick without a

doctor’s note and days taken off without notice do not qualify towards holiday

entitlement. There are rules about how this leave should be taken, which are all laid out

in the employment contract. For example, one week has to be taken at Christmas; any

holiday has to be asked for in writing and confirmed by management; employees are

expected to stagger holidays to prevent undue disruption to the business. These rules

have been introduced to prevent the business suffering, as they have had bad
experiences with employees in the past, but in reality there is flexibility and the rules

are not as rigidly adhered to as the contract suggests.

Emergency and parental leave are unpaid:

‘Days taken under the new “leave for new parents” are unpaid and do not

qualify towards holiday entitlement.’

However, there is some flexibility over this. For example, one employee had a week off

because his wife was ill. Although this week was unpaid, because the family would

have struggled financially if losing a weeks’ pay at once, a small amount was deducted

each week over a period of time. If there is a family emergency someone will be sent

122

home to sort things out. The time lost might be made up later rather than being unpaid.

The company does whatever is reasonable for a particular case. Being a small company

everybody knows everybody else and their circumstances.

There is recognition that people have a life outside work. For example, one employee

was building a patio. During a period of good weather this employee asked if he could

go home to work on the patio and make up his hours in the evening. This was agreed



the company felt that it doesn’t lose out on this, indeed it probably gains through

goodwill.

When talking about legislation around parental rights for time off, the respondent

reported that he finds this quite insulting. There obviously has to be protection for

employees against unscrupulous or bad employees, but he regards the types of rights

being introduced as reasonable behaviour by an employer.

‘Take the case of a young guy on the shop floor, if his wife is having a baby,

we will automatically allow him time off.’

He doesn’t believe that parental leave legislation alters anything. Time off still has to be

negotiated and taken if convenient to the business, which is how it has always

happened. The firm complies with parental leave legislation.

Policies relating to absence

As described above, all employees are given a contract of employment. This is to

protect the business and also ensure that everyone is clear about their rights and

conditions of employment.

‘After a period of time you get used to how people behave, you can’t

predict, but you come to expect. The contract covers the company and has

to be written so that there is evidence of what people have been told.’

The contract is adjusted from time to time. Any changes are put on the noticeboard for

everyone to see and comment on. After a month these are incorporated into everyone’s

contract.

A written contract should not be necessary, but it is felt that this provides a baseline.

One owner is involved with the Federation of Small Businesses and has heard so many

horror stories, he realises the importance of clearly setting a standard. The overall

company policy is:

‘To try to be fair and reasonable in all things.’

In relation to sickness, they expect a doctor’s note on the fourth day off and pay

statutory sick pay. If someone does not notify them that they are sick on the first day

they take off, this time is deemed to be taken as holiday. Again, this is to protect the

business against employees just disappearing for a time.

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Patterns of absence

It is relatively common for someone to just not turn up for work, and this is addressed

in the written contract given to all employees. If an employee is absent without

permission or a clear reason they are deemed to have taken annual leave.
One employee is a heavy drinker and it is known that he will be absent at times

without notifying the firm. Although they know he is a heavy drinker they cannot do

anything about this. However, he is at work more often than he is absent and does a

good job when he is working. He also makes up some time through unpaid overtime.

One key employee broke his ankle and was off for a period. The company went on

paying him. This was a conscious decision. He will probably knock a couple of days off

his holiday, work longer hours at times and hence repay this over the years.

A woman working in the office suddenly stopped turning up for work. They heard she

had suffered a heart attack and shortly afterwards sick notes started to arrive. She was

on sick leave for 23 weeks, returned to work for two weeks and was then absent

again. The firm heard she was working in a local supermarket and wrote asking when

she was planning to return to work for them. After receiving no reply she was asked to

make an appointment to discuss her position. At this meeting a manager explained the

difficulties she was causing them and tried to discover when she would be likely to

return to work. She was very defensive and gave in her resignation. Shortly afterwards

the company received a letter from a trade union accusing them of unfair dismissal and
claiming compensation. They then received notice of an accident at work in which this

employee had been injured. However, the company was able to produce one of the

doctor’s notes which said she was in hospital at the time the accident was supposed to

have happened. They have heard nothing more since then, but have since found that

this woman and her husband were known locally for this type of action.

During this time, nearly £2,000 was paid in sick pay, and a business partner’s wife

was covering the work. This experience has made the company wary, and they are

now more careful about how they deal with absence.

Cover arrangements

Cover is organised on an ad hoc basis. For example, when an employee broke his
ankle, the company just had to cope without him. It is not possible to recruit temporary

staff for factory jobs; no one with the necessary skills is available. The manager who

deals with estimates and inquiries often helps out on the shopfloor. This means that

the paperwork can fall behind. At the moment they are extremely busy and he is having

to work at the weekend to meet the demand for quotes on future work.

The company was preparing to purchase a new specialised machine. One of the key

workers was fully trained and ready to run this, but then was killed in a car crash.

Initially they just had to cope; eventually another employee was trained to use the

machine.

When they were short-staffed in the office a director’s wife provided cover. However,

since a family bereavement she has been unable to work and friends have helped to

cover.

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Absence is a problem on day one, but they just have to accept this. After three days,

absence really becomes a problem. Relatively few common ailments last more than

three days.

Example

At the time when one key employee had a broken ankle and another key worker had

just been killed in a car accident, a recently retired employee was brought in, everyone

else worked harder and a business partner spent more time on the shopfloor doing

paperwork and estimates outside working hours.

Costs and benefits

Costs

The following costs of absence were identified:

Pressure on other employees. In particular, the co-owners have to cover. This

means that estimates and other paperwork have to be done outside working hours,

and might take longer to do

High levels of absence could eventually mean turning business away, but this does

not seem to have happened

Management time is taken ensuring that systems are in place and work, and sorting

out problems when they occur

The woman who was sick and playing the system cost them nearly £2,000 in that

she was paid during the time she was off, and eventually the co-partner’s wife

picked up the work.

Benefits

The respondent did not feel there were any benefits from absence. However, allowing

people to take time off as described in the section on work-life balance, was felt to

create goodwill in the workforce.

Emerging themes

There is difficulty in ad hoc cover in a small business



absence always puts more

stress on others, including diverting the owners from developing the business

Providing cover is always a problem and requires flexibility, and give and take by

employer and employees

If one person is off, this represents a significant proportion of the workforce

The company aims to operate as a reasonable employer, and this involves give and

take on both sides. Legislation which is very prescriptive may work against this, in
that the scope for an employer to operate flexibly is reduced. This flexibility and

informality is key in small businesses

The company needs the workforce to work with the business partners



‘we are all

in it together’.

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Summary of data sources

Interview with one of the business partners.

Copy of the employment contract given to all employees, covering:

Wages and hours

Holidays

Sickness

Leave for domestic reasons

Parental leave

Pension

Termination of employment

Retirement

Business confidentiality

Outside employment

Grievance procedures

Health and safety

Company policy.

IT Technology R&D case study

Business background

Deregulation in the sector within which this business operates means it has had to face

increasingly fierce competition in recent years. They operate at the forefront of

technology, and the business has unique expertise and experience within the sector.

This particular business provides research and development to support other businesses
in the organisation, but is increasingly expected to sell its expertise in the external

market. This expertise is in demand, and bidding for external work creates a revenue

strand for the overall company.

Work organisation

They operate a matrix system of work organisation. The work is team orientated and

teams vary in size depending on the project. In some areas an employee will normally

work on several projects at once. In others, people work on one project and for a long

period of time. Deadlines can vary, projects can be up to two or three years in length.

The line management structure is separate from the project management structure.

The majority of employees have high-level technical skills. While some people have
specialist skills, many skills are common to a range of individuals. This means that

there is considerable flexibility within the business.

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Customer demands

Until recently the technical projects within this business were only conducted for other

parts of the organisation. Project managers often knew the customer and were often

located in the same building. The nature of relationships was fairly informal. For

example, if a project was delayed for some reason, this could usually be mediated by

an informal conversation.

The business is now beginning to bid for external work. This has several implications,

although it is very early days and the full impact of these has not yet been fully

realised. They are working in partnership with organisations with which they were

previously in competition. Staff are having to become more commercially aware, less

‘techy’ and more ‘sharp’ and ‘streetwise’. The nature of client/project management

relationships is likely to change, and external customers may well be more demanding.

Workforce issues

The business employs over 3,000 people (including sub-contractors). The majority (90

per cent) are located on one site; the rest are with other businesses in the organisation

across the country.
Around 80 per cent of employees are technical specialists. Ten to 15 per cent are in

admin and support roles; the rest are professionals in finance, HR and sales and

marketing.

Technical staff are all science graduates with at least a 2:1. Many have a higher

degree. It is difficult to recruit sufficient British graduates, and they employ people from

around the world:

‘From anywhere in the world where engineering is revered.’

The culture was described as ‘vocational’. People enter the business because they are

interested in the technical side and in learning new things:

‘They can pursue what they are interested in, in a supportive environment.’

The majority of admin and support staff are recruited locally. The business has good

links with local schools and FE colleges. They also run IT Modern Apprenticeships

through which young people can progress to university and become professional staff.

The organisation generally has been downsizing. This business has had headcount
restrictions on employment, hence the use of many sub-contract staff. Employment is

due to increase over the next few years.

There is very little labour turnover. Employee satisfaction, as evidenced by staff

attitude surveys, is very high. For example, 75/80 per cent report satisfaction with the

way they are managed, senior management and career opportunities.

The business is involved in a wide range of initiatives in the local community and within

the organisation. For example, they are actively trying to promote opportunities for

women and people with disabilities. They have held focus groups of employees to see

how they feel about various aspects of the working environment and the opportunities

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available to them. There are a range of initiatives aimed at promoting employment

opportunities for people with disabilities, for example, through providing flexible

working arrangements and paying for special equipment. ‘Take your daughter to work

day’ is co-ordinated centrally and used to promote the sector and technical occupations

to young girls.

Work-life balance

The business is very committed to work-life balance, and there is a statement from

senior management on the Intranet to support this.
Policies are very pragmatic and supportive. The majority of employees are graduates

and there are shortages nationally. The business wants to retain staff and is as flexible

as possible to encourage this.

‘If someone wants time off to travel, it is not in the business or individual’s

interest to say no.’

The business has always been very flexible in terms of working patterns. The aim is to

fit the job to a person’s needs. For example, some employees need to drop off and pick

up their children, and it is acceptable for them to work shorter hours in the office and

make time up at home. This flexibility is applied in a range of circumstances, not just in

relation to caring for children. The MD provides a lead by working flexibly himself.

They have just introduced an initiative promoting flexible working. This was rolled out

from elsewhere in the organisation but there has been little take-up locally. When
asked, employees reported that it made no difference to them, as considerable

flexibility was already available. Having an initiative does bring flexible working to the

notice of all and emphasises its acceptance within the business.

If someone works part-time, the job is tailored to ensure that it is part-time. This

involves educating customers, suppliers and line managers.

People in their early 50s may not want to work under the same pressures as earlier in

their career. They are offered sabbaticals, career breaks and the opportunity to work on

less demanding projects.

There is a formal homeworking policy. Most employees have full remote access from

home and can work from home as the need arises.

There is, however, a long hours culture, especially amongst professional staff. This was

attributed to a number of factors, including wanting to be visible, and the volume of

work. However, it was felt that the most important reason was the type of work and

employee. People are very committed to and interested in the work they do.

Policies relating to absence

Policies set out what it is permissible to have time off for, and whether this is paid or

not, but the business basically tries to meet individual needs and there is considerable

line manager discretion. These rights apply to all permanent staff. The business is

sympathetic to the needs of agency employees, especially those who are with them

long-term.

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Paid time off is allowed to deal with personal problems, such as a sick relative and

other family issues. People are more effective at work if they are not worrying about

these things. Employees are allowed to take up to two years unpaid leave, for example,

for travel, and are guaranteed a job on their return.

Maternity leave is longer than the statutory minimum and the job is held open. Two or

three weeks paid paternity leave are also available.

Any member of staff who is off sick from work is required to phone in. If the line

manager does not talk to them, an HR manager with line responsibility will telephone

them. There is a process for alerting managers about sickness absence. The line

manager receives a reminder that someone has been off. Of ten they know and it is not
an issue, but this does ensure that regular absence is spotted and the issue is raised

with the individual concerned. It tends to stop casual days off and encourage people

not to make too much of minor ailments.

The business will do as much as it can to support those who are long-term sick, or

have a pattern of persistent periods of absence. Line managers, with help from HR as

required, will keep in contact with the person, monitor their progress and offer support.

The aim is to help people back to work, or to work to the best of their ability: for

example, through flexible working hours, homeworking, changes in roles and

workloads. If a person becomes too ill to work, mutually acceptable arrangements are

made for them to leave.

Work-life balance and absence policies are written down and copies placed on the

Intranet. HR are putting in a work-life balance website, which will include links to other

relevant Internet websites.

Patterns of absence

Everyone reported that absence levels are very low. Sickness absence is less then two

per cent and people will come in with colds and minor ailments or work at home.

Managers have a problem getting people to use all the annual leave they are entitled to.
There has long been a right to paternity leave, and fathers take this. It was thought

that a couple of employees had taken parental leave. Very little maternity leave is

taken, due to the low proportion of women employed.

Employees do take sabbaticals and time off to travel, but not to a great extent.

The business has employees from many countries, but no issues were raised relating to

foreign nationals needing time off to go home for emergencies.

Due to the nature of the business, in particular the need to bill customers, they have to

keep records of who is off work. Absence is therefore recorded, but not necessarily the

type of absence. Sickness absence is recorded centrally, however, much of the

knowledge of levels and type of absence is held locally.

Cover arrangements

Arranging cover is the responsibility of project managers. They will look at the project

plan taking into account, for example, the expected length of an absence, whether the

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person is working on a critical work package, their skills and role, and the closeness

and nature of a deadline. A decision will be made whether an absence needs covering

at all, other team members can cover or cover needs to be brought in. There is

considerable flexibility within the business, and employees from other teams or units

can often be drafted in to help out, particularly in the short-term. For longer-term

absence, a contractor is usually used.
If a completion date is in jeopardy, it is often possible to renegotiate with the internal

client. However, the move to greater reliance on the external market might change this,

and deadlines may become less flexible.

Planned absence is most easily dealt with, as the project manager has time to plan how
to arrange cover. For short-term absence, the work may be left for a person’s return,

reallocated within the team, or someone from elsewhere in the business will be brought

in. For longer-term absence, temporary cover will be brought in. This might be from

elsewhere in the business, often providing a development opportunity, otherwise a sub-

contractor will be used.

The cover arranged for maternity leave depends on the level and role of the individual.

If she has a key skill, this is likely to involve more planning around the absence. There

is plenty of warning, so managers can plan to reduce the work taken on or bring a

contractor in. If the person is a team or group leader, managers will look at who can be

put into the job, either on a permanent or temporary basis, often as development

opportunity. This can have a knock-on effect, as another post becomes vacant.

Whether this is filled or not will depend on the factors outlined at the beginning of this

section.

Covering the work due to flexible working patterns is often up to the individual

concerned:

‘As long as the work gets done and the volume and quality of work being

done by an individual is fine, it is left to the individual to manage

themselves.’

If someone is late or has to wait for a delivery at home for part of the day, they will

make up the hours. One person is on a college course unrelated to their work. They

have an afternoon off each week and work longer hours on other days. Line and project

managers might be involved in approving patterns of cover and workloads.

At current levels of absence, managing cover is not an issue. Sickness absence is very

low and generally coped with. Planned absence is accepted as a fact of working life

and dealt with appropriately. If a whole team was absent this would create problems,

but it was felt that this is very unlikely to happen.

Some examples

A programmer/analyst had long-term clinical depression. Over a period of five or six
years they had several periods of sick leave, some of considerable length. This person

was a team member and not too critical a resource. Cover was relatively easily

arranged. The team leader was able to draw on a pool of resource to do the work.

However, this did mean that the team was frequently one person down. The impact on

the work was not particularly significant, and managers were able to control the

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amount of in-coming work. Some team members began to question whether the

situation should be happening and allowed to continue. The impact of this illness

became a particular issue as the person became unable to contribute effectively when

present. This lack of contribution was generally perceived to be due to inability, ie a

performance management issue rather than due to sickness. The whole situation

became very complex for reasons personal to the individual concerned. After

discussions between all directly concerned, a mutually acceptable package was agreed

for the person to take retirement on health grounds.
One employee with unique and increasingly important skills was involved in setting up

a new team so that others could be trained in these skills, the employee could be more
fully utilised by the business. Although having a history of health problems, his health

was good at that time. As time went by, he had to take more time off. He was in

intense pain and it became increasingly obvious that he could not cope with all the

work. Another team leader was already being developed to help with the work. She

had to take on responsibilities much earlier and before she was fully prepared. This

placed a burden on the unit manager, who had to spend time supporting her. The

employee who was ill, focused his working time on mentoring and passing on his skills.

He was very interested in the work and initially reluctant to take retirement on health

grounds. Access to this was complicated due to there being no diagnosis for the

illness. Eventually he agreed to leave, wanting to make the most of the time when he

was feeling well rather than having to work at these times, and a suitable package was

sorted out. This case placed a considerable burden on the unit manager. He had to

ensure that the new team became established, the employee who was ill felt

supported, and the new team leader was trained and supported. Over time, many small

issues which the ill employee had dealt with emerged and had to be sorted out



was impossible to spot everything which needed to be covered at the outset.

In another situation, a team member was allowed to work at home to care for a child

with learning difficulties. This person lived some distance from the office to be near a

particular special school for their child. His home was set up for remote working and he

was expected to come into the office occasionally. It was increasingly difficult to find

pieces of work which could be done in isolation. Furthermore, team links with this

person were becoming weak and this was causing difficulties. Plans were made for the

employee to spend more time in the office to enable him to bond with the team. He

then injured his leg requiring surgery which made him housebound. Discrete pieces of

work were found for him, but currently there is nothing for him to do. The work he

would have been doing if he had been able to travel to work is being covered by a

contractor. The whole situation had an impact on other team members, as he didn’t

seem to be paying full attention to the work he was doing. The manager is currently

working on new ideas of how to utilise him in the team.

The financial manager in one department was about to go on maternity leave. This
person is employed as a contractor due to the head-count restrictions on permanent

staff, but has skills and expertise which are very valuable to the business. It has been

agreed to keep her job open, although the business is under no obligation to do this. An

administrative assistant, also a contractor, is very keen to cover for the financial

manager. After discussions, it was decided that this assistant was capable of learning

the necessary skills and that it would be a good learning opportunity. The assistant has

been shadowing the financial manager for some months, and the manager has been

given remote access at home so that she will be able to keep in contact and offer

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advice. As the nature of the work changes to include a greater proportion of external

contracts, there is likely to be a greater demand for financial skills within the business.

They are under no obligation to keep the administrative assistant in a financial role once

the maternity leave ends, but there might be an opportunity to employ her. The

assistant’s job is being filled by someone on a six-month contract.

Costs and benefits

Costs

The costs of absence identified in this case study are listed below.

The main direct cost is incurred when a member of staff is absent and their salary

continues to be paid. This mainly applies to sick leave and is only really an issue

when someone has a long-term illness.

The majority of costs were indirect, in particular:

•

Short-term and ad hoc absence puts pressure on colleagues who have to
provide cover in addition to their normal workload

•

Arranging cover and dealing with certain types of persistent absence takes up

management time.

•

Training people into new roles.

Benefits

A range of benefits of absence were identified through this case study.

Allowing employees time off work to deal with personal and family problems and

dealing with people sensitively, especially those with long-term health problems,

improves loyalty to the company and contributes to staff retention. This also

reduces the need for costly recruitment exercises.

Being flexible, for example in relation to the hours worked and the types of absence

which are acceptable, enhances a company’s image, making recruitment in a tight

labour market easier.

Allowing employees to take time off, for example, to deal with personal and family

problems or to have a break through a sabbatical, means that they return more able

to focus on their job. It was also felt that if employees feel valued and well treated

they are ultimately more productive. They are also more prepared to provide cover

and put in extra effort when needed.

Particular episodes of absence can provide opportunities for a department or team

to look at how the work is organised and allocated. An unexpected positive benefit

of absence can be the reorganisation of work in a more effective way.

Covering for absence can be used to develop other employees, or to provide an

opportunity to assess whether someone can cope in a different or more senior role.

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Emerging themes

Although sickness absence is not very high in this business, it is this type of

absence which is the main concern, in particular the management of someone who

is long-term sick and unable to contribute effectively. There are issues around

managing cover, but also the individual and their illness and, if this illness is serious,

how to come to mutually acceptable arrangements about the termination of

employment.

The role of line and project managers is crucial in dealing with all aspects of

managing absence.

HR managers mostly provide support to line and project managers through offering

guidance and advice as needed.

Ad hoc unplanned absence is more difficult to cover than planned absence.

The ease of arranging cover depends on the skills and role of the individual

concerned.

Summary of data sources

Interviews with:

An HR manager

Equality and Diversity manager

Four line managers.

Telecomms Company case study

Business background

The business has been affected by significant pressures during recent months. The

degree and pace of internal change has been huge. There have been changes at senior

management levels accompanied by reorganisation. The company operates in fiercely

competitive markets in which scope for growth is now declining. Ensuring that recent

success is maintained in the future creates further pressure. Keeping up with changing

technologies and emerging markets is crucial. To cut costs competitors have made

significant proportions of their workforce redundant. This has created additional

insecurities for employees and, in particular, has increased dissatisfaction among call

centre staff.

Work organisation

Business is international: the UK workforce is geographically split across more than one

site.

Customer demands

Private customers have dramatically increased in number. They are also increasingly

sophisticated and demanding. Their knowledge about the products and their potential is

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extensive. They have higher and higher expectations of the products, of the deals and

of the services they buy. In addition, they also continue to be interested in their own

convenience. For example, the business is now having to gear up to dealing with initial

enquiries received by email (rather than phone calls being the first point of contact).
As indicated, business customers are considered critical to the company’s future.

Implemented during the last year, Specialist Care Teams provide a special level, and

different type, of service to new business customers. Free upgrades and more flexible

credit arrangements are, for example, staple elements of the package.

Workforce issues

The company has over 5,000 employees. Half are employed in call centres. Thirty per

cent are employed in technological services and 20 per cent are employed in marketing,

sales and Human Resources.

Company-wide, staff turnover stands at an annual rate of over 20 per cent. This is an

average figure as turnover rates in call centres are higher. There are pockets of

disaffection, especially in the call centres.

‘The pace of change and the business pressures have been phenomenal. On

top of this, major changes at the top have been unsettling. All these together

have translated into individuals’ workloads and they have either sunk or

swum, literally.’

Call Centre work is recognised to be relatively low-paid with little prospect of career
progression. Compared with those offered by competitors, internal incentive schemes

are felt to be fairly comprehensive. Workloads vary but call volume can be

considerable. The single determinant of employee workload is customer demand. In

addition, performance measurement is tight and unsophisticated (ie call handling times

and numbers of calls handled). Many employees are felt to be disaffected. This has

only been compounded by fears of redundancy following competitors releasing call

centre staff. It is common for call centre staff to move into other parts of the business,

for example, most of those in the teams now securing new business accounts came

from the call centres.

Morale among ‘professional staff’ working in technological and back office services

varies but is generally reported to be higher. This workforce is described as ‘energised’

and ‘hungry’.

Customer care skills are critical to the business, and customers’ ratings of these are

consistently positive. Technological knowledge is also critical in some functions (eg

Technological Services). Increasingly in fact, to match customers’ increasing

sophistication, technological knowledge is more and more important across the

business, including in Business Accounts, Sales and Marketing.

Employees consistently criticise:

The lack of top-down communication and consultation about significant internal

changes and about issues relating to business performance

The lack of an explicit statement of the company’s direction (including during the

significant internal and senior changes)

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The quality of line management, particularly within the call centres. Here a

significant proportion of managers are new to managing people, and are reported to

be disinterested in basic good practice (eg team building, offering support, behaving

consistently and fairly) and in their responsibility for delivering performance targets.

Work-life balance issues

To accommodate the extremely rapid doubling in size, policies are currently being

reviewed and a ‘second generation’ written. A revised flexible working policy has, for

example, just been put before the Board. Draft policies were discussed.

Consistent with their recent history, current practices are reminiscent of smaller

organisations. Flexible working arrangements tend to be arranged on an ad hoc basis,

informally and between the individual and their line manager. There is some reluctance

to formalise and to publicise these flexibilities:

‘Twelve months ago we thought of ourselves as a small company; we’re

now twice the size and can’t keep thinking or behaving like that.’

Among professional staff, the company’s commitment to enable employees to balance

their work with their home lives was rated highly. Compared with competitors, the

company was believed to do more to support the principle. One manager, for example,

arranged that an employee with childminder problems worked from home intermittently

until the problems were resolved:

‘I would far rather do this than have her being late here and there or have
her take sick days to cover her childcare; this way we all know where we

are and we all get work done and she isn’t worrying about her child.’

As she produced more than she would have had she been in the office, the employee,

the team and the manager benefited. Other team members were initially suspicious and

concerned that she was not ‘pulling her weight’. Evidence of her outputs silenced these

worries. Indeed, other team members have now requested regular time working from

home.

‘I treat team members as responsible adults. If they’ve organised their work

around say a sports day, that is they’ve ensured it’s done and to the best of

their abilities, then I’m happy for them to leave early that day.’

While broadly supportive, managers also recognise that there are resource limits to the

amount of flexibility they can sanction, and that such flexibility is contingent on good

performance: ‘everyone doing it, or a sufficient number leaving early we couldn’t

handle, but one-offs if people have delivered is fine’.

Discussions of support for the work-life balance principle were confined to professional

staff.

Policies related to absence

As indicated, policies relating to absence and to leave arrangements are currently being

rewritten and it was not possible to access drafts.

135

To reduce levels of sickness absence, significant changes are being made to policies

and procedures. The following are anticipated.

The amount of paid sick leave will be reduced and payment will be made more

contingent on reports by occupational health specialists. These changes are

intended to ‘prevent sick leave becoming a second holiday. Sick leave is not an

allowance, it is a conditional entitlement and conditional on valid sickness.’

Line managers will be required to conduct return-to-work interviews as a matter of

course and payment of their bonuses will be linked to criterion levels of turnover,

attrition and attendance.

Occupational Health and Human Resources practitioners will be required to work
more closely to address problems, and Occupational Health will be encouraged to

take more responsibility for the solution of these problems.

Patterns of absence

Generally, data are reported to be lacking or of dubious quality. There are concerns also

about the systems used locally and centrally to collect absence related data. For

example, recently reported levels of sickness absence were as follows: company-wide

the average level of sickness absence is 2.2 per cent and its peak level is 2.9 per cent.

These are considered to be ‘wild under-estimates’ of actual levels, particularly in ‘hot

spots’ such as call centres.

Sickness absence in the call centres is recognised as a problem. Problems relate to both
the cumulative amount, and the number of different types, of absence experienced in

the centres. Employees take sick leave for ‘odd days here and there’, for repeated and

frequent short periods, and for longer periods.

Levels of sickness absence in the ‘back office’ services and in technological services

are reported to be lower than in the call centres, but the lack of quality data should

again be noted. Levels of absence within a team providing technological services

provide a useful illustration. In the last 12 months, two of a team of 12 have been on

sick leave for six and 12 weeks respectively and others have also had ‘odd days of

sickness’. For technological services this was an unusually high level of absence and

was difficult to cope with.

Cover arrangements

Different cover arrangements are used in different parts of the business, as in these

three examples.

Example 1: A team securing accounts with new business customers

The work of this team is critical to future success of the business

The same arrangements are used to cover both planned and unplanned absence

The duration of the absence determines the cover arrangement deployed. If the

absence lasts for over a fortnight, a different system of cover is used

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For absence of less than a fortnight, a back-up account holder takes over full

management of the account. Both the main account holder and their buddy are

nominated at the same time, when the account is won

For absence of longer than a fortnight the account is re-allocated to a new main

account holder. Reallocation takes account of existing workloads, amount of

experience managing accounts, importance of the particular account, specialist

knowledge within the team, and recent experience of buddying

Critical success factors to these arrangements for cover are: (1) accurate recording

of all accounts-related communications, (2) fair allocation of buddying

responsibilities within the team, and (3) ensuring the quality of team members’
account management such that buddies take over ‘accounts that are in a fit state

and not riddled with problems ’.

Example 2: A team managing projects for internal clients

Internal clients are likely to be senior within the business and projects are likely to

be high profile and consequential for strategic decision-making

In common with the previous example, the same arrangements are used to cover

both planned and unplanned absence

Also in common with the previous example, a number of cover arrangements are

deployed, and one of the triggers to change arrangements is the duration of the

absence

For absence of less than a fortnight, critical project milestones are absorbed by

colleagues within the team. The milestones are identified by the shared project

planning software used by all team members. Compared with the buddying role

described above, colleagues caretake rather than take over essential project tasks

For absence of longer than a fortnight, the absentee’s role on the project is taken

over either by a peer or the team manager. All tasks relating to the project (rather

than only the essential milestones) are reallocated within the team

If and when the burden of the cumulative absence is not sustainable by the team,
external project management consultants, with whom the team has an established

and successful working relationship, are brought in

In terms of the periods of notice the team manager requires to plan cover, two

weeks’ notice must be given for absence of two weeks and two months’ notice

must be given for absence of more than one month

In terms of the level of absence this team can sustain internally, performance can

be sustained if three of the 12 project managers are on some form of leave at one

time. If a fourth manager has to take leave, cover would be difficult to arrange and

there would be serious concerns about the team not delivering

Critical success factors to these cover arrangements are: (1) regular supervision by

project managers such that they are familiar with progress on projects, (2)

consistent use of project management software by all those working on a project,

(3) accurate and fair assessments of team members’ workloads, and (4) adherence

to required notice periods for planned absence.

137

Example 3: A call centre providing customer service

Call centres provide critical contacts with customers

The only formal system for covering absence is the standard system for scheduling

the numbers of employees required to be on a shift. This is the responsibility of

each call centre’s resource department. Scheduling is intended to project the

numbers of operators required to match anticipated peaks and troughs in customer

demand and also to cover for absence. In principle then, more employees per shift

will be scheduled to cover absence. In practice, this system was reported to be

moderately effective in providing cover for call centres’ absence.

Non-financial costs and benefits of absence

Operational and human resources managers readily identified both costs and benefits to

absence.

Costs

The following costs were associated with all absence:

Management time arranging cover

Management time bringing colleagues up to speed and supporting them to provide

the cover.

The following costs were associated with longer-term sickness absence:

Securing advice from human resources, occupational health and legal experts

Managing colleagues’ reactions to the absence and its impacts, and to the
absentee’s return

Supporting the team member’s return to work.

Benefits

Unplanned absences were considered to benefit employees when they provide team

members with the opportunity to either develop or demonstrate their skills.

A number of benefits were seen to arise from the provision of planned leave, such as

for travel or related to family commitments. These include:

Retaining a valued and experienced colleague (and not having to spend time and

money recruiting a replacement)

The return of an energised and engaged colleague.

Financial costs

The company was unable to provide details of any direct or indirect costs incurred.

However, the following cost headings were identified as causing concern among

senior managers: turnover

Stress-related compensation claims.

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Emerging themes

Some of the key themes emerging from this case study include the following:

Data relating to planned and unplanned absence is generally reported to be

inadequate, as are systems for collecting data.

Unplanned sickness absence in call centres constitutes the largest absence-related

problem for the business. Levels and patterns of absence here contrast with those

in other parts of the business. While human resource managers recognise the

difficulties associated with call centre work, they also report employees treating

sick leave ‘as an allowance, a second holiday rather than a conditional entitlement’.

Different parts of the business use different cover arrangements, but all use the

same arrangements to cover both unplanned and planned absence.

Cover options include back-up account holding, care-taking essential work,

reallocating roles, buying-in external consultants and increasing the numbers of

employees scheduled per shift.

Where more than one cover arrangement is available, the duration of the absence is

a trigger to switch arrangements. If the absence continues for a fortnight, a new

cover arrangement is put in place and this will usually involve the reallocation of the

work (either internally or externally).

Summary of data sources

Interviews with:

Senior HR manager

Departmental and team managers.

139

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144

HR Managers Topic Guide

Participants

Organisation

Line of business and sector

Name of interviewee

Position

Size of workforce

Date the organisation was established

Date of interview

Interviewer

Purpose

We are studying the increase in levels of absence, and related legislation (eg about

paternity leave, emergency leave, working hours), and what implications these have

for how absence is managed.

We are interested in different types of absence, planned (eg maternity leave) and

unplanned (eg emergency leave).

We are interested in both their costs and benefits; benefits may be less obvious but

most people have been surprised to identify at least one or two.

We are interested in similarities and differences between managers, employees and

HR managers’ perspectives on these questions.

We are interested in how you manage absence



policies and practices



what

you feel works and what doesn’t, and why, and about practical changes you feel

would be beneficial. The more examples you can give us the better.

We will also be talking to line managers and, where possible, employees and their

representatives. We are asking line managers about their experience of managing

both planned and unplanned absence, how effective their approaches are, and how

they might be improved.

We will ask employees and their representatives parallel questions to help us

understand how their experiences and ideas are similar and different.

Confidentiality and anonymity of participants

What you say to me will be treated as confidential. It will only be passed to the IES

research team for research purposes. It will not be reported to others within your

organisation; colleagues will not be able to identify your contributions to our research.

When we report on our findings, we will preserve your anonymity. In the main, results

will be aggregated (ie results from a number of individuals ‘added together’). Where

148

How necessary is employees’ customer awareness to your business? How customer-

aware is your workforce? How well developed are their customer care skills?

How well do employees take to providing cover for each other during absence?

Work-life Balance

What kind of arrangements do you have in place that help the workforce combine work

and family responsibilities, pursue leisure activities, trades union responsibilities,

voluntary work, and/or civic responsibilities? (Please complete the table below)

Example of WLB
initiative

Is it available?

Is it available to everyone?

Does it go beyond the

statutory minimum?

(Tick if yes)

Annualised hours

Term-time working

Adoption leave

Sabbaticals

Other career breaks

Reduced hours working

Other (Describe)

How high has take-up been? (For example, Are there differences between staff groups?

Has take-up changed over time? Have any requests been turned down? Why? For
whom?)

What motivated you to introduce these initiatives? (For example, turnover, morale,

absence, costs?)

151

Who is responsible for arranging, managing and monitoring the cover for these

absences?

I’d like to talk in some detail about how absence is covered. Can you recall the most

recent instance of a short-term planned absence, eg a week long training course, jury

service, adoption leave: what was the reason for the absence? (Describe it)

In principle, what arrangements were available to cover this absence? In practice, what

do you know to be the advantages and disadvantages of each? Which have been the

most/least effective? (Please enter answers in the table below)

Cover arrangement

Available

Advantages

Disadvantages

(Tick if yes)

(List)

Overtime

Acting-up allowances

Temps

Other (Describe)

How do you decide how the absence will be covered? ie what are the factors that

govern the choice of cover arrangements? (Tick if factors influence decision making

about cover arrangements)

•

Costs?

•

Skill compatibility?

•

Length of absence?

•

Availability of cover?

•

Customer consequences etc.?

•

Other factors (such as…)?

Can you explain how these factors contribute to your decision-making, eg is the

availability of someone to cover your first consideration, then what? Is it more or less

influential than other factors?

That was an example of a planned absence that was relatively short-term. If it had

continued beyond the short-term, how would it be managed differently? When and

why?

152

At what point would it be considered to be a problem, and what circumstances would

result in this assessment of the absence?

Does the absence being paid for make a difference to the following: (Check each and

note explanations for impacts)

•

Take-up of leave?

•

Arrangement of cover?

•

Costs overall?

What length of ‘notice period’ for planned absence is ideal from your viewpoint? Do
they differ for different types of planned absence? What has been your experience of

such ‘notice periods’ in practice? (Ask for examples)

During the last 12 months, what have been the main costs of planned absence? (Please

complete the table below)

Who or what for

Main costs/downsides of absence

For the individual on leave

Their manager

Their co-workers

For the business

For costs

During the last 12 months, what have been the main benefits of planned absence?

(Please complete the table below)

Who or what for

Main benefits of absence

For the individual on leave

Their manager

Their co-workers

For the business

For costs

153

Unplanned Absence eg Emergencies, Sickness

Show the list of unplanned absence: For which of these absence do you have an

explicit policy, eg explaining who does what and who is entitled to what, etc? (Tick list

if there is a policy)

Do the policies make absence more manageable? (Please will you explain how/not)

Who is responsible for arranging, managing and monitoring the cover for these

absence?

I’d like to talk in some detail about how absence is covered. Can you recall the most

recent instance of a short-term unplanned absence, eg: compassionate or emergency

leave, sick leave: what was the reason for the absence? (Describe it)

In principle what arrangements were available to cover this absence? In practice, what

do you know to be the advantages and disadvantages of each? Which have been the

most/least effective? (Please enter answers in the table below):

Cover arrangement

Available

Advantages

Disadvantages

(Tick if yes)

(List)

Overtime

Acting-up allowances

Temps

Other (Describe)

How do you decide how the absence will be covered? ie what are the factors that

govern the choice of cover arrangements? (Tick if factors influence decision making
about cover arrangements)

•

Costs?

•

Skill compatibility?

•

Length of absence?

•

Availability of cover?

•

Customer consequences etc?

•

Other factors (such as…)?

154

Can you explain how these factors contribute to your decision-making, eg is the

availability of someone to cover your first consideration, then what? Is it more or less

influential than other factors?

That was an example of an unplanned absence that was relatively short-term. If it had

continued beyond the short -term, how would it be managed differently? When and

why?

At what point would the absence be considered to be a problem, and what

circumstances would result in this assessment of the absence?

Does the absence being paid for make a difference to the following: (Check each and

note explanations for impacts)

•

Take-up of leave?

•

Arrangement of cover?

•

Costs overall?

Some people feel that the length of notice period can make all the difference to

managing planned absence. In terms of managing unplanned absence, is there

something similar that you feel makes all the difference in terms of how easy the

absence is to manage? (Ask for examples)

During the last 12 months, what have been the main costs of unplanned absence?

(Please complete the table below)

Who or what for

Main costs/downsides of absence

For the individual on leave

Their manager

Their co-workers

For the business

For costs

156

Managers Topic Guide

Participants

Organisation

Line of business and sector

Name of interviewee

Position

Size of workforce

Date the organisation was established

Date of interview

Interviewer

Purpose

We are studying the increase in levels of absence, and related legislation (eg about

paternity leave, emergency leave, working hours), and what implications these have

for how absence is managed.

We are interested in different types of absence, planned (eg maternity leave) and
unplanned (eg emergency leave).

We are interested in both their costs and benefits; benefits may be less obvious but

most people have been surprised to identify at least one or two.

And we are interested in similarities and differences between managers, employees

and HR managers’ perspectives on these questions.

We are interested in how you manage absence



policies and practices



what

you feel works and what doesn’t, and why, and about practical changes you feel

would be beneficial. The more examples you can give us the better.

We will also be talking to line managers and, where possible, employees and their

representatives. We are asking line managers about their experience of managing

both planned and unplanned absence, how effective their approaches are, and how

they might be improved.

We will ask employees and their representatives parallel questions to help us

understand how their experiences and ideas are similar and different.

Confidentiality and anonymity of participants

What you say to me will be treated as confidential. It will only be passed to the IES

research team for research purposes. It will not be reported to others within your

organisation; colleagues will not be able to identify your contributions to our research.

157

When we report on our findings, we will preserve your anonymity. In the main, results

will be aggregated (ie results from a number of individuals ‘added together’). Where

individual examples are important, their source will be disguised such that they cannot

be traced back to the individual, their position and/or their organisation. This is

standard practice for us.

Unless we agree otherwise, the participation of your organisation will not be publicised.

Other points

If you have issues with either the content or the conduct of the interview, please

contact Stephen Bevan, who is Associate Director at IES and the Lead for this

project.

Can I establish roughly how long you have available?

If my question is not clear, please stop me and I will re-phrase it.

Similarly, if you feel I haven’t understood your point, please stop me. What’s

important is your experience and your understanding of the issues. The purpose of

our discussion is for me to understand these so, if you feel that I’m not with you,

please stop me and say so.

The business

Overview

What kinds of products or services does the organisation provide?

Who are your key customers? What kinds of demands do they make of you in terms of

price and quality?

Recent trends

Can you tell me briefly how the organisation has been developing, eg about recent

trends and pressures, key changes in the way the organisation operates; recent

commercial, technical, labour market pressures.

Your job, the work process, team and organisational performance

How does your own job relate to the work process within your establishment?

159

How necessary is employees’ customer awareness to your business? Generally, how

customer aware is your workforce? How well developed are their customer care skills?

How would you describe employees’ attitudes to customer service?

Absence

We are interested in how you cope with and manage absence, for example, in how you

arrange cover, what issues you consider as you do so and at what point you consider

absence to be a problem.

We would like to understand how it happens as a rule, ie generally, and we’d like you

to use as many examples as necessary to get this over to us.

First we would like to talk about planned absence ie those absences you are likely to

know about in advance and so may be able to plan for.

We want to get a sense of what actually happens when both planned and unplanned

absence occurs.

General impressions

In general, which are more difficult to manage planned or unplanned absence (show

lists of different types of absence) and why?

What is most difficult:

The number of absence?

The type of absence?

The number and type of absence and their effects together?

Regarding planned absence, eg maternity leave, absence for training, if you had to

nominate one, what is the key to managing this type of absence effectively?

If you had to nominate one, what is the most difficult aspect of managing this type of

absence effectively?

167

Employees Topic Guide

Participants

Organisation

Line of business and sector

Name of interviewee

Position

Size of workforce

Date the organisation was established

Date of interview

Interviewer

Purpose

We are studying the increase in levels of absence, and related legislation (eg about

paternity leave, emergency leave, working hours), and what implications these have

for how absence is managed.

We are interested in different types of absence, planned (eg maternity leave) and

unplanned (eg emergency leave).

We are interested in both their costs and benefits; benefits may be less obvious but

most people have been surprised to identify at least one or two.

And we are interested in similarities and differences between managers, employees

and HR managers’ perspectives on these questions.

We are interested in how you manage absence



policies and practices



what

you feel works and what doesn’t, and why, and about practical changes you feel

would be beneficial. The more examples you can give us the better.

We will also be talking to line managers and, where possible, employees and their

representatives. We are asking line managers about their experience of managing

both planned and unplanned absence, how effective their approaches are, and how

they might be improved.

We will ask employees and their representatives parallel questions to help us

understand how their experiences and ideas are similar and different.

Confidentiality and anonymity of participants

What you say to me will be treated as confidential. It will only be passed to the IES

research team for research purposes. It will not be reported to others within your

organisation; colleagues will not be able to identify your contributions to our research.

When we report on our findings, we will preserve your anonymity. In the main, results

will be aggregated (ie results from a number of individuals ‘added together’). Where

168

individual examples are important, their source will be disguised such that they cannot

be traced back to the individual, their position and/or their organisation. This is

standard practice for us.

Unless we agree otherwise, the participation of your organisation will not be publicised.

Other points

If you have issues with either the content or the conduct of the interview, please

contact Stephen Bevan, who is Associate Director at IES and the Lead for this

project.

Can I establish roughly how long you have available?

If my question is not clear, please stop me and I will re-phrase it.

Similarly, if you feel I haven’t understood your point, please stop me. What’s

important is your experience and your understanding of the issues. The purpose of

our discussion is for me to understand these so, if you feel that I’m not with you,

please stop me and say so.

Background

In the last two years, how has your workload changed?

•

Is it susceptible to peaks and troughs?

•

What are the main pressure points?

•

What influence do you have over it?

•

How easy is it to cope with the workload (and any fluctuations) here?

How have your customers’ demands changed in the last two years?

•

In their quantity?

•

In their quality?

To reflect changes in workload or customer demands, have staffing levels changed?

To respond to changing workloads or customer demands, has the way work is

organised changed?

•

Use of technology?

•

Use of teamworking?

•

Use of flexible working practices?

•

Requirement for skill flexibility?

170

When you are absent and it is unplanned

If you are sick or injured, or late, or have to take time off because of an emergency

with someone close to you, who is negatively affected and who benefits positively?

(Show list of unplanned absence) (Please circle all those that apply)

If you are sick or injured, or late,

or have to take time off because of a emergency with someone close to you

Negatively affected

ie inconvenienced etc.

Positively affected

ie benefits etc.

Myself

Immediate colleagues

Line manager

The organisation as a whole

The wider organisation

Who do you feel benefits the most and who is most inconvenienced? Why? (Ask for

examples)

Benefits most

...............................................................................................................

Inconvenienced the most

..............................................................................................................

Has it ever been difficult for you to take this type of leave? What were the

circumstances? How do you understand the difficulties? What would have helped?

(Explore)

What are the costs of your being sick or injured, or late, or have to take time off
because of an emergency with someone close to you? (Ask for examples)

Costs

To me

..................................................................................

To my immediate colleagues ..................................................................................

To my line manager

..................................................................................

To the organisation as whole ..................................................................................

What are the benefits of your being sick or injured, or late, or have to take time off

because of a emergency with someone close to you: (ask for examples)

171

Benefits

To me

..................................................................................

To my immediate colleagues ..................................................................................

To my line manager

..................................................................................

To the organisation as whole ..................................................................................

When you are absent and it is planned:

If you take time off to do voluntary work, to do jury service, to do a training course, to

go travelling, for a break in your career, to have or look after a child, who is.

(Show

list) (Please circle all those that apply)

If you take time off to do voluntary work, to do jury service, to do a training course,

to go travelling, for a break in your career, to have or look after a child

Negatively affected

ie inconvenienced etc.

Positively affected

ie benefits etc.

Myself

Immediate colleagues

Line manager

The organisation as a whole

The wider organisation

Who do you feel benefits the most and who is most inconvenienced? Why? (Ask for
examples)

Benefits most

...............................................................................................................

Inconvenienced the most

..............................................................................................................

Has it ever been difficult for you to take this type of leave? What were the

circumstances? How do you understand the difficulties? What would have helped?

(Explore)

172

What are the costs of your being sick or injured, or late, or have to take time off

because of an emergency with someone close to you? (Ask for examples)

Costs

To me

..................................................................................

To my immediate colleagues ..................................................................................

To my line manager

..................................................................................

To the organisation as whole ..................................................................................

What are the benefits of your being sick or injured, or late, or have to take time off

because of an emergency with someone close to you? (Seek examples)

Benefits

To me

..................................................................................

To my immediate colleagues ..................................................................................

To my line manager

..................................................................................

To the organisation as whole ..................................................................................

When others in your team are absent

When your immediate colleagues are absent, who and what is affected, and why?

(Please fill in the table below)

Affected? (circle)

Positively or negatively? And why?

Customers

Work quality

Deadlines

Workloads

Teamworking

Morale and

motivation

Reward (eg bonuses)

When do pressure points occur? ie when does either the type or amount of others’

leave become a problem for you? How do you think it would be best addressed? Does

this happen and, if not, why not?

174

Different Types of

Absence

We are asking about two types of absence:

1. Absence that have been known about in advance of the employee not being at work

eg maternity leave. In principle, advance notification means that it is possible for the

absence to be planned for. These are planned or anticipated absence.

2. Absence that have not been known about in advance of the employee not being at

work eg time off for emergencies. In principle, lack of advance notification means

that it is not possible, and therefore more difficult, to manage these absence. These

are unplanned or unanticipated absence.

Examples of each type of absence are listed on the next two pages to enable the

interviewer and the interviewee to be clear which type of absence is being considered.

These lists are not mutually exclusive. If the interviewee feels strongly that a type of

lateness would be better included in a different list, move it and note their rationale.

Their not being mutually exclusive is appropriate for two reasons. Firstly, the distinction

between planned and unplanned leave is to an extent arbitrary and subjective. For

example, in the last few days the sick child of an employee has been cared for by their

grandparent. He has not been getting better and had a bad night. At lunchtime, an

emergency appointment at 5pm with a medical specialist is confirmed. With four hours

notice, the employee requests time off. Whether this constitutes a planned absence is

arguable. For example, I am involved in a road traffic accident and am likely to be off

work for some weeks and possibly months; this is unplanned leave. After I’ve been off

for almost five months my absence is considered to be long-term and my manager and

an HR manager come round to discuss arrangements for me going back to work for

only a few hours a week; this absence is planned.

Secondly, the same type of leave will be categorised differently in different

circumstances (contexts); for example, lateness. Lateness because of a medical

appointment can be planned for. Lateness because of train cancellation cannot be

planned for. Absence such as lateness are noted (*) and included in both lists.

Planned absence

Lateness, ie planned lateness

Absence for civic responsibilities

Leave for religious holidays

176

‘Map’ of Topics for

Exploration with HR

Managers

A. The business

What do you do, who for and how successfully? What’s distinctive about the work

process and what are the constraints on it?

B. Employees

What are the levels of trust and commitment? Are customer relationships and skill

interchangeability important to the business? Do people cover for one another?

C. Initiatives to balance work and life

What arrangements are in place? What are their costs and benefits? How high is take-

up?

D. Overall impressions of how absence is managed

What proportion of the total amount of absence is accounted for by unplanned sickness

absence? What policies are in place? Are planned or unplanned more difficult to

manage? Why? Who is responsible for notification, recording, covering and monitoring?

What’s ‘The Key’ to managing unplanned absence effectively? And planned absence?

E. Planned absence, eg maternity leave, training, annual leave

What policies exist and how effective are they? Who is responsible for what? How was

cover arranged in the most recent example of short-term planned absence the
interviewee can recall, and why? If it had continued what would have been different,

and why? When was it or would it have been a problem? What are the costs and what

are the benefits to the individual on leave, their line manager, their co-workers and to

the business?

F. Unplanned absence, eg sickness absence, emergency leave

What policies exist and how effective are they? Who is responsible for what? How was

cover arranged in the most recent example of short-term unplanned absence the

interviewee can recall, and why? If it had continued what would have been different,

and why? When was it or would it have been a problem? What are the costs and what

This section is here to ‘orient’ you and the interviewee to more detailed discussions of

absence and how different types are managed. A top tip: if you have very limited time, work
through this section first.

178

Appendix D. Absence costing

tools

Table 1. Employee and staff group data

Total employees Group 1

Group 2

Group 3

Group 4

Average FTE in Year

Headcount

Gender: average FTE

Male

Female

Age group: average FTE
Under 30

30-39

40-49

50+

Absence
Number of days absent in year

Days absent due to:
Sickness – short-term

Sickness – long-term

Annual leave

Emergency leave

Maternity leave

Parental leave

Career break

Training

Unfilled vacancies

Lateness

Reduced hours

Civic responsibility leave

Trade union activities

Voluntary work

Sabbaticals

Religious holidays

Number of incidences by duration
1 day

2 days

3 days

4-5 days

6-10 days

11-20 days

1-6 months

6+ months

Absence rate
Potential working days in year

Absence rate

Unfilled vacancies

179

Table 2. Direct costs

Total Employees

Group 1

Group 2

Group 3

Group 4

Salary payments (total & group)

Annual salary

Employers' NI Contribution (12.2%)

Employers' Contribution to pension

(%)

Bonus payments (annual value)

Contracted overtime (annual value)

Total employment costs

Daily employment costs

Benefits

Employee benefits (annual value)

Car allowance

Private healthcare

Disability cover

Holiday entitlement (days)

days

Other 1

Other 2

Other 3

Total benefits

Total direct costs

180

Table 3. Indirect effects

Total Employees

Group 1

Group 2

Group 3

Group 4

Replacement worker (internal)

Daily overtime

Daily 'acting-up’ allowance

Daily employment costs

Direct salary

NI costs

Pension costs (%)

Other benefits

Total daily employment costs

Weekly employment costs

Training benefit to replacement

Replacement worker (external)

Hourly agency costs

Hours per week

Weekly costs

Learning curve costs (non-productive pay)

Daily costs

Weekly costs

Cost for replacement period

Productivity loss

Daily costs

Weekly costs

Total

Productivity gain due to replacement

Salary cost minus productivity loss

Impact on customers

Loss of sales/income

181

Table 4. Absence management costs

Group 1

Group 2

Group 3

Group 4

Total Employees

Line Manager time

Hours

Arranging cover

Return-to-Work interviews

Training replacements

Supervising replacements

Administration

Total

HR Time

Collating & reporting data

Administration

Total

Training

Line manager training

Trainer employment costs

Total

Health Insurance

Total annual cost of

premiums

Health Promotion (annual costs)

EAPs

Subsidised facilities

Occupational Health

Services

Total

Total Management Costs

182

The DTI Employment

Relations Research Series

Reports published to date in the DTI Employment Relations Research Series are listed

below. Adobe PDF copies can be downloaded from the DTI website:

www.dti.gov.uk/er/inform.htm

This and other DTI publications can be ordered at:

www.dti.gov.uk/publications

Click the ‘Browse’ button, then select ‘Employment Relations Research Series’.

Alternatively call the DTI Publications Orderline on 0870 1502 500 (+44 870 1502

500) and provide the URN. Or email them at:

publications@dti.gsi.gov.uk

with your

details.
Libraries, research centres, organisations and academics wishing to be added to our

mailing list for printed copies of this series should email their details to DTI at:

emar@dti.gov.uk

No. 1

Involving employees in Total Quality Management: employee attitudes

and organisational context in unionised environments. Margaret

Collinson, Chris Rees, Paul Edwards with Linda Inness. URN 98/507.

June 1998

No. 2

Industrial Tribunals, workplace disciplinary procedures and employment

practice. Jill Earnshaw, John Goodman, Robin Harrison and Mick

Marchington. URN 98/564. February 1998

No. 3 The dynamics of union membership in Britain – a study using the Family

and Working Lives survey. Richard Disney, Amanda Gosling, Julian

McCrae and Stephen Machin. URN 98/807. January 1999

No. 4

The individualisation of employment contracts in Britain. William Brown,

Simon Deakin, Maria Hudson, Cliff Pratten and Paul Ryan. URN 98/943.

February 1999

No. 5

Redundancy consultation: a study of current practice and the effects of

the Regulations. Jill Smith, Paul Edwards and Mark Hall. URN 99/512.

July 1999

No. 6

The employment status of individuals in non-standard employment.
Brendan Burchell, Simon Deakin and Sheila Honey. URN 99/770. July

1999

No. 7

Partnership at work. John Knell. URN 99/1078. September 1999

No. 8

Trends in earnings inequality and earnings mobility 1977-1997: the

impact of mobility on long-term inequality. Abigail McKnight. URN

00/534. February 2000

183

No. 9

Costs and benefits of European Works Councils Directive. Tina Weber,

Peter Foster and Kursat Levent Egriboz. URN 00/630. February 2000

No. 10 Explaining the growth in the number of applications to Industrial

Tribunals, 1972-1997. Simon Burgess, Carol Propper and Deborah

Wilson. URN 00/624. April 2001

No. 11 Implementation of the Working Time Regulations. Fiona Neathey and

James Arrowsmith. URN 01/682. April 2001

No. 12 Collective bargaining and workplace performance: an investigation using

the Workplace Employee Relations Survey 1998. Alex Bryson and David

Wilkinson. URN 01/1224. November 2001

No. 13 Findings from the 1998 Survey of Employment Tribunal Applications

(Surveys of Applicants and Employers). URN 02/508. February 2002

No. 14 Small firms' awareness and knowledge of individual employment rights.

Robert Blackburn and Mark Hart. URN 02/573. August 2002

No. 15 Awareness, knowledge and exercise of individual employment rights.

Nigel Meager, Claire Tyers, Sarah Perryman, Jo Rick and Rebecca

Willison. URN 02/667. February 2002

No. 16 Working long hours: a review of the evidence. Volume 1 – Main report.

J Kodz et al. URN: 03/1228. November 2003

No. 17 Evaluation of the Partnership at Work Fund. Mike Terry and Jill Smith.

URN 03/512. May 2003

No. 18 Retirement ages in the UK: a review of the literature. Pamela Meadows.

URN 03/820. July 2003

No. 19 Implementation of the Working Time Regulations: follow-up study. Fiona

Neathey. URN03/970. July 2003

No. 20 The impact of employment legislation on small firms: a case study

analysis. Paul Edwards, Monder Ram and John Black. URN 03/1095.

September 2003

No. 21 Employee voice and training at work: analysis of case studies and

WERS98. Helen Rainbird, Jim Sutherland, Paul Edwards, Lesley Holly

and Ann Munro. URN 03/1063. September 2003

No. 22 The Second Work-Life Balance Study: Results from the Employer Survey.

Stephen Woodland, Nadine Simmonds, Marie Thornby, Rory Fitzgerald

and Alice McGee. URN 03/1252, October 2003

No. 23 The business context to long hours working. T, Hogarth, W.W. Daniel,

A.P.Dickerson, D. Campbell, M.Wintherbotham, D. Vivian. URN 03/833.

November 2003

No. 24 Age matters: a review of the existing survey evidence. Dr. Peter Urwin.

URN 03/1623, February 2004