The global pandemic and leaving the EU have had very serious consequences for many organisations in the UK. Some unfortunately have gone to the wall but is there an opportunity for others to reduce expenditure significantly just by managing their workforce better?
As we come out of the crisis there is a fear that mass redundancies may become the very public face of the state our economy as the new reality impacts on organisations. However, it is well-documented that both the public and the private sector can make significant savings just by managing their workforce better, rather than resorting to kneejerk reductions in headcount.
There are a number of benefits to be achieved here. To start with, redundancies are a painful process for any organisation to go through, and it is also not necessarily a cheap option. While the remaining staff may be able to pick up the slack for a while, a company will quickly reach the limits of its staff capacity as the economy picks up again. And ramping up quickly is likely to be a challenge as all competitors will be dipping into the talent pool in a time where the pool seems to have been depleted seen in the area of agriculture and freight. So, if redundancies can be avoided by improving workforce management, why don’t organisations go down this route more readily?
The answer is: because many do not have the tools to do so. Given that the workforce can account for anything up to 90 per cent of total fixed costs, it is surprising how many organisations do not have stringent systems in place to address three core HR efficiency challenges: monitoring staff time and activity, managing absences, and assigning tasks more effectively.
One reason for this is the lack of adequate attendance monitoring systems. However, even if attendance data is being collected, there is often a risk of it simply being swallowed up by a sea of statistics. As the current debates around mining ‘Big Data’ underline, few companies have the tools to analyse and present the myriad data they collect in an accessible, actionable way. Workforce information is no exception.
As a result, not only can absenteeism and its impact on the bottom line go largely undetected, but the underlying causes may be missed, and with that the opportunity to remedy these for the benefit of all parties concerned.
However as there have been significant changes in ways of working recently this is not evenly spread across all sectors. Where job roles have been unable to work from home many organisations saw higher levels of sickness absence rates. Notably this was especially be seen in the manufacturing and production sectors where almost 40% of organisations reported an increase in sickness absence rates during the pandemic.
However, the public sector saw the highest levels of sickness absence in 2020 with an average 2.8% of working time lost per employee. While there may have been roles suitable to working from home within this sector, many employees will have been in frontline roles and not only had to continue attending the workplace but would also have been more exposed to contracting COVID-19.
Multiply any of these levels by the number of employees in even a medium-sized organisation, and it’s easy to mount up costs running into hundreds of thousands of pounds.
While few would now deny the need for stringent absence monitoring, it remains an uncomfortable topic due to its emotional and political implications especially in the time of pandemic and necessary self-isolating. In the face of this, initiatives to deploy workforce management systems often stall in their infancy.
While genuine illness is the reason for most missed days at work, the 2019 CIPD survey revealed that non-health related absences were still among the top five causes of absenteeism.
Caring responsibilities for children and others figure highly among these, confirming anecdotal evidence that in more conservative companies, unplanned absence is often the only way employees feel they can deal with such matters. Where employers are less focused on the traditional 9-to-5 work day, more flexible options can be made available, offloading not only the individual concerned, but also the team, and the business as a whole.
Stress is also another highly rated cause of absenteeism, according to the 2019 CIPD survey. In this context, we often find that the occurrence of sickness-related absences and overtime go hand in hand. So, for instance, a company with lots of seasonal demand variation may be ‘breeding’ stress-related absenteeism during peak times, as it has to ask workers to put in a lot of extra hours at short notice.
How an organisation covers absences can also create a dangerous reversal of motivations. If the policy is to ask colleagues to cover for absent workers by putting in overtime, this can inadvertently incentivise absenteeism.
In these scenarios, one person’s absence translates into a bigger pay package for other team members. Clearly, there is going to be little peer pressure on absentees in such circumstances. Where this happens, organisations not only need to revise their procedures for covering absences – for instance by spreading workload across teams or by shifting team members – they also need to implement mechanisms that engender a peer pressure mentality to reduce absenteeism. This can only be achieved by creating a culture that accepts and effectively manages genuine absence and challenges ‘duvet days’.
The concept of workforce management enables businesses to apply a holistic approach to managing staff. Workforce management systems extend beyond the traditional scope of time and attendance monitoring, linking together all key workforce-related systems and processes and automating previously manual procedures.
An obvious advantage of this approach is that personnel, payroll and benefits professionals no longer have to spend most of their working hours on protracted but mundane tasks such as entering attendance data. Not only does this save time and cost, it also means they can focus on the managerial and strategic side of their job.
The other significant benefit is that workforce management systems enable organisations to record much more detailed information about employees, their attendance and activities. The cumulated data can be analysed systematically to identify patterns for single individuals or even the entire workforce.
This could be anything from uncovering the reasons for high levels of absenteeism to addressing excessive amounts of overtime, which may not be down to individuals but due to organisational misalignment.
Workforce data can also be fed back into the scheduling process to provide a more accurate prediction of the time and resource needed to perform future tasks. With the advent of predictive workforce analytics, companies will even be able to make such strategic decisions in real-time.
A large workforce management implementation by Crown WFM within the MOD in Bristol resulted in a 50% reduction in absence alongside reduced overtime costs and the administrative burden whilst increasing staff engagement and managerial accountability.
In conclusion, a two-pronged approach is needed to tackle the perennial issue of absenteeism even in difficult times: not only must organisations be open to becoming more flexible in the way they work, they also need to seek to align the interests of employee and employer more strongly.
In order for both aspects to work, companies should not shy away from deploying automated systems – and using their capabilities to their full. The benefits to be reaped are not just a ‘big brother’ view of the workforce, but also greater fairness and consideration of the needs of individual workers and dealing with any extra capacity delivered will be a long way from mass redundancies, far-reaching pay cuts and reduced service provision.