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As Employee Absenteeism Persists And Costs Climb, More Employers Look To Work-life, Absence Control Programs

(RIVERWOODS, ILL., October 23, 2001) – As professional and personal demands increasingly, and often unpredictably, compete for workers’ time, more employers are finding that flexibility offers a way to help their employees – and their businesses – successfully manage the strain, according to the 2001 CCH Unscheduled Absence Survey by CCH INCORPORATED (CCH), a leading provider of human resources and employment law information (http://hr.cch.com).

With employers reporting that over two-thirds of unscheduled absences are due to reasons other than personal illness, and with costs for absences mounting, more organizations report they are turning to work-life programs to help keep employees on the job, according to the most recent survey, conducted for CCH by Harris Interactive^sm.

For the 11th annual CCH Unscheduled Absence Survey, human resource professionals from U.S. companies of all sizes and across major industries were surveyed. Results of the survey appear in the October 24, 2001, issue of CCH Human Resources Management Ideas & Trends, a newsletter for HR professionals.

"Employees have readily accepted that today’s work responsibilities go beyond what takes place between 9 and 5 at the office. No one even thinks twice now when they log on from home on Saturday to check e-mail messages or make business phone calls from the beach," said Nancy Kaylor, a workplace analyst for CCH.

"But, there’s a trade-off, and it’s one employers appear willing to make. Companies are helping employees achieve a better balance in their professional and personal lives by introducing flexibility into the workplace with a broad array work-life and absence control programs," Kaylor added.

While it’s good news that employers are now recognizing the importance of flexibility, the next challenge is making sure employers have the right programs in place, according to CCH.

"How successful these initiatives are depends on the employer’s ability to align programs with employees’ needs and provide the required program support," said Kaylor.

"Employers can’t plan for every event that may affect the workplace but they can increase their odds for success by making sure the programs are flexible enough to address the real reasons why workers aren’t at work," she noted.

For example, Kaylor asks employers, what if an employee’s spouse is called up for military duty?

"This may create child care issues at home. Is your company prepared for this kind of immediate, unpredictable event? Do you allow flexible scheduling or provide child care referral services that can help the employee – and your company’s productivity – stay on track during this short-term need?"

The fact is, says Kaylor, while employers could not have predicted this immediate need, they should be aware that for parents, any additional demand on either personal or professional time can upset the delicate work-life balance.

"Employers with programs in already in place that acknowledge the realties working parents face today are able to deal with situations such as this with far less disruption to the workplace and productivity than those who cling to traditional work models and sick leave policies," said Kaylor.

If They’re Not Sick, Why Aren’t They Working?

Continuing the trend the survey has observed in recent years, calling in "sick" often has less to do with a worker’s own physical health than other reasons, according to the 2001 CCH Unscheduled Absence Survey.

Although Personal Illness was the single most common reason cited for unscheduled absences, at 32 percent, reasons other than illness accounted for 68 percent of the no-shows.

Among the other reasons for absences, Family Issues tops the list at 21 percent, followed by Stress, which accounts for 19 percent. Respondents reported that 11 percent of unscheduled absences are a result of employees’ Personal Needs, with Entitlement Mentality accounting for an additional 9 percent of the absences. Eight percent of employees were absent for Other reasons, according to the survey, including such things as transportation problems and bad weather.

Troubling Problem Challenges Employers

With the unscheduled absenteeism rate continuing to hover at about

2 percent, and the number of no-shows for reasons other than personal illness climbing, employers signaled that they are willing to try new ways to address a problem that is becoming increasingly expensive.

The 2001 CCH Unscheduled Absence Survey found a slight rise in unscheduled absences from a rate of 2.1 percent in 2000 to 2.2 percent in 2001, while the average per-employee cost for unscheduled absences rose from $610 in 2000 to $755 in 2001. Despite the fact that this costly issue continues to trouble employers, these results can actually provide some good news for employers and HR professionals.

"Employers are keenly aware that the barriers to attendance arise from multiple issues facing today’s workforce," Kaylor said. "This year’s survey underscores the ability and willingness of organizations to tackle the problem with new tools and innovative programs."

The 2001 CCH Unscheduled Absence Survey found that employers put an increased number of work-life and absence control programs in place last year. And, nearly half of the employers who predict that absenteeism will decline at their companies believe the decrease will be the result of new policies and programs.

HR Professionals Pin Hope on Work-life Programs

Employers reported using 6.7 work-life programs, up from an average of 3.4 programs in the preceding year. The survey found that HR professionals believe that employers can most successfully help employees balance work-life demands by reconsidering when and where work is done.

On a scale of one to five (with five being most effective), the work-life programs ranked highest by HR professionals for effectiveness in reducing unplanned absences were Alternative Work Arrangements (also known as Flexible Scheduling) (3.6), Telecommuting (3.6), Compressed Work Week (3.5) and Leave for School Functions (3.4).

Other effective programs cited included Satellite Workplaces and On-site Child Care tied at 3.2, and Employee Assistance Programs and On-site Health Services tied at 3.1. Rounding out the list of top-10 programs, employers gave Job Sharing and Wellness Programs each an effectiveness rating of 3.0

As to what organizations actually put into practice, a majority of the programs identified as most effective also had the highest rates of use. Many of these programs experienced a notable increase in use in the past year. Alternative Work Arrangements, one of the highest rated programs, also was the most highly used, with 63 percent of companies reporting they offer such a program.

A majority of employers (58 percent) also reported using Leave for School Functions, representing a notable increase from 2000 when only 24 percent of respondents offered such a program. Employee Assistance Programs were used by 57 percent of respondents and Wellness Programs by 50 percent. Forty-two percent of the respondents reported offering Compressed Work Week and Telecommuting programs, representing big increases from 2000, when 28 percent and 20 percent of companies reported using these programs, respectively. Job Sharing was offered by 33 percent of respondents, up from 25 percent in 2000.

Effectiveness and Use of Work-life Programs

"The increased program menu signals a clear understanding of the seriousness of this costly problem," said Kaylor. "However, employers will find that launching new programs is a waste of precious budget dollars if those programs fail to meet the special and specific demands on their workers’ time."

To be effective in reducing employee no-shows, employers need first to identify and understand both immediate and long-term employee needs.

With this year’s survey indicating that employee stress accounts for nearly one in five absences, employers may want to take a close look at the underlying causes. HR can do something as formal as an employee survey or focus groups, or hold informal drop-in sessions. If an organization offers an Employee Assistance Program or other resources that workers can turn to, it is important to provide frequent reminders that these services are available.

"Equally important," said Kaylor, "is to consider the long-term and emerging needs of your workforce– such as those based on changing demographics."

"Baby boomers have a significant influence on the workplace and the median age of the labor force is rising. Smart employers will recognize and address the different needs of this growing population of aging workers," she said. "Childcare programs are likely to become less attractive to this group, while elder care programs will take on new value as these employees turn to take care of their parents. Other programs such as wellness programs and alternative work arrangements also are likely to have added appeal."

Morale Matters

Organizations with "Very Good" morale were more likely than those with "Poor" morale to use some of the more effective work-life programs, including Alternative Work Arrangements, Telecommuting and Compressed Work Week. Companies with "Very Good" morale also reported lower absenteeism rates (2.0) than those with "Poor" morale (2.4). Employers who experienced a decrease in unscheduled absences in the past year cited improvements in the overall work environment and employee morale as the most influential factors.

Employers Also Count On Absence Control Programs

Employers also are increasingly looking to absence control programs to help them reduce unscheduled absences. The 2001 CCH Unscheduled Absence Survey found that all absence control programs reported by employers experienced an increase in use during the study period. On average, companies indicated using 5.3 absence control programs, up from the 2.7 average reported last year.

The most effective absence control programs provide employees more control over their time, according to the 2001 CCH Unscheduled Absence Survey.

HR professionals continue to see Paid Leave Banks (also known as Paid Time Off) as the most effective absence control program, with an effectiveness rating of 3.6. Paid Leave Banks provide employees with a bank of hours to be used for various purposes instead of traditional separate accounts for sick, vacation and personal time.

Under such programs, employees have control over how they use their days off and, working with their manager, can plan ahead to meet upcoming personal obligations or needs.

"These programs are particularly effective because they encourage employees to schedule all but the most unforeseeable absences. Traditional sick-leave policies, on the other hand, can actually have the unintended effect of encouraging no-shows, as employees may be tempted to call in ‘sick’ at the last minute for a personal appointment they knew about well in advance," said Kaylor.

Employers found Disciplinary Action to be the next most effective program, (3.4), with Buy Back and Bonus programs close behind (both at 3.3). Under a Buy Back program employees are compensated for the allotted time off that they do not use.

Employers gave the Yearly Review and Verification of Illness processes effectiveness ratings of 3.0. No-fault Systems received an effectiveness rating of 2.9, while Personal Recognition, at 2.5, was seen as the least effective absence control program. No-fault Systems limit the number of unscheduled absences allowed, regardless of circumstances, and take specific disciplinary actions if that number is exceeded.

Although Paid Leave Banks are perceived by HR professionals as the most effective absence control program, they are not the most widely used. Fifty-eight percent of survey respondents reported having such a program.

In terms of absence control, it appears that most employers are still trying to combat the problem of unplanned absences using tools they already have in place, such as a routine disciplinary action or the yearly review process.

Disciplinary Action ranks as the most-used absence control program by employers, with 93 percent of the survey respondents reporting use. Eighty-one percent use the Yearly Review process to deal with absenteeism, with 71 percent looking to Verification of Illness to help curb the problem. Personal Recognition programs were used by 62 percent of reporting companies. Other programs in place include No Fault (58 percent), Bonus (56 percent) and Buy Back (52 percent).

Effectiveness and Use of Absence Control Programs

Look Before You Leap

"While it’s encouraging to see that more employers are looking to work-life and absence control programs to help employees deal with work-life demands, it’s important to remember that more isn’t necessarily better," cautioned Kaylor.

In addition to addressing employee and employer needs, organizations also must be prepared to manage and maintain these programs. In terms of support, employers must be sure that they have the information, administration, management, communication tools and even technology infrastructure in place to support programs.

"Sustaining a successful telecommuting program that benefits both you and the employee, for example, means more than waving good-bye to your employees as they go off to work at home," said Kaylor.

"There are important issues to examine, such as how performance will be tracked and measured or how you can ensure that telecommuting employees will not be disadvantaged in their career progression," Kaylor noted.

An enclosed worksheet outlines steps companies can take to reduce unscheduled absenteeism through effective work-life and absence control programs.

About the Survey

The 2001 CCH Unscheduled Absence Survey, now in its 11th year, surveyed 234 HR executives in U.S. companies and organizations of all sizes and across major industry segments in 42 states and the District of Columbia. The 2001 survey reflects experiences of randomly polled organizations with an estimated total of 1,371,261 employees. The CCH Human Resources Management Ideas & Trends newsletter sponsored the survey, conducted by Harris Interactive^sm from May 31 through June 21, 2001.

Mean absence rates were calculated by dividing total paid-unscheduled absence hours by total paid-productive hours. Scheduled absences, such as vacation, legal holidays, jury duty, personal time and bereavement leave were not included.

To Obtain a Copy of the Survey

Copies of the CCH Human Resources Management Ideas & Trends newsletter containing the complete 2001 CCH Unscheduled Absence Survey are available by calling 800-449-9525, and asking for offer number 06280001. Price is $29.95, plus tax, shipping and handling.

About Harris Interactive^sm

Harris Interactive (Nasdaq: HPOL) is a worldwide market research and consulting firm, best known for The Harris Poll Ò and its pioneering use of the Internet to conduct scientifically accurate market research via its multimillion member online panel. The company has more than 45 years of experience in supplying clients with actionable knowledge across multiple markets. Through its U.S. and Global Network offices, the company conducts international research in multiple, localized languages. For more information about Harris Interactive, visit www.harrisinteractive.com. EOE M/F/D/V

About CCH INCORPORATED

CCH INCORPORATED, Riverwoods, Ill., is a leading provider of employment law and human resource information, software and e-learning for HR professionals. The CCH Human Resources Group is among the nation’s most authoritative sources of employment law, including information on HR management, benefits and compensation. Its services include Human Resources Management, Employee Benefits Management and Shared Learning™ interactive training. CCH is a wholly owned subsidiary of Wolters Kluwer North America. The CCH Human Resources Group web site can be accessed at http://hr.cch.com.

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EDITOR'S NOTE: For more information about the survey, contact: Leslie Bonacum at 847-267-7153 or Neil Allen at 847-267-2179. Available to members of the press: charts and graphs depicting survey data. This release and related information are posted in the CCH Press Center: www.cch.com.

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Last minute no-shows can mean major problems for employers. Poor customer service, plummeting productivity, lost sales and crumbling workplace morale. While it may be tempting to jump start a new work-life or absence control program, smart employers do their homework first. In addition to reviewing what other companies are doing, think through carefully any plan to expand or add programs. Make sure it makes sense for your employees and your business. Here are five tips to get you started.

1. Ask Why. Carefully analyze the reasons for enhancing your existing lineup of programs. What is the extent of your organization’s unscheduled absence problem? What will the effect be on the bottom line? Few companies will spend money on good ideas that are not carefully designed and cost justified.
2. Define Objectives. If you add a program, make sure you have a specific objective, that the results can be measured and that you have the tools with which to measure them. For example, doing something to "improve attendance" is neither focused nor quantitative. A quantifiable objective, for example, would be to reduce unscheduled absences by 10 percent by the end of the next fiscal year.
3. Ask Questions and Analyze Answers. Don’t go forward without asking for input and gathering as much information as possible. Should you be targeting a particular business unit or department for improvement? Are you making assumptions about the type of program your employees need or want? Do you know what barriers are keeping them away from the workplace? Consider surveying your workforce or conducting focus groups. Understand what today’s demographics tell you about worker needs over the next decade. And, remember that given the diversity in today’s workplace, it’s unlikely that one program can successfully meet all employees’ needs.
4. Anticipate Issues. No matter how simple or small a proposal may appear to be, planning is crucial. Even the best ideas can fail if a well-designed rollout plan is not in place. Think the new program all the way through, considering the direct effects as well as the implications and related support issues. Identify what program implementation and maintenance will cost and how they will be handled. Verify what administrative and technology resources are needed. Make sure the concept and plan has buy-in from the appropriate level of decisionmakers. Before implementation, develop a solid and ongoing communication plan.
5. Measure and Follow-up. Measure whether or not your objectives were met and formalize a follow-up mechanism to ensure that the investment achieved the desired results. Be open to revision and change, and recognize that you may have to change or tweak programs over time to continue to meet evolving employee needs.