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Better absence management reaps significant rewards

Historically, managers responsible for absence management have failed to differentiate between frequent short-term absence (generally a management issue), and potential long-term absence (generally a medical issue). AXA ICAS was convinced that this confusion led to poor absence management practice and decided to prove it by developing its own absence management system.

With over 1,600 people working in 228 line manager-led teams, including 600 staff in telesales and customer service centres, the private healthcare division of AXA - AXA PPP healthcare - was the perfect company to test drive Sickness Absence Management (SAM) - a new approach to absence management. SAM is a telephone and software based absence recording and reporting service. It generates absence notifications, trigger alerts and real-time management information needed for businesses to concentrate resources on employees who need them most. Absence records and employee absence histories are automatically created by SAM which removes the administrative burden and inconsistency associated with absence.  This empowers managers to concentrate on managing, rather than administering the issue.

In order to better understand the underlying data, AXA PPP healthcare segmented the best and worst performing teams based on their average number of absence spells. “What struck me was the fact that some of our best performing teams came from our worst performing departments and conversely, some of our worst performing teams came from our best performing departments. Most employers only work on aggregated data and therefore fail to focus resources where they matter most,” comments Dudley Lusted, AXA PPP healthcare’s head of corporate healthcare development.

Another key finding was that 65% of staff take minimal sick leave. This knowledge reinforced the fact that a “blanket approach” to absence management is misguided and that resources should be focused on the other 35%, and on the teams worked in by those employees. Within a year of using SAM, AXA PPP healthcare’s absence rates fell from 4.1% to 3.6%, resulting in a monthly saving of over £14,000. In one telesales centre of 150 staff the 6% absence rate was reduced to 3%, representing an additional 100 sales hours per week and additonal sales revenue of £17,000 per week.

By taking the cost of SAM (less than £10 per employee per year) and comparing it with the cost of absence days saved, AXA PPP healthcare has produced the equivalent of an 11:1 return on investment.

Dudley Lusted says SAM has prompted change within the company, putting the spotlight on good absence management practice: “Managers have access to real-time information which helps them have meaningful and prompt discussions with employees about their absence record when needed. Employees know there is now a clear focus on reducing absence in AXA PPP healthcare and managers know that the absence performance of their teams is highly visible. Overall it provides an inescapable absence audit process.”

David Prosser who pioneered SAM for AXA ICAS says “The AXA PPP healthcare experience has shown that it makes good financial sense to manage absence. It is almost certain that employers are significantly underestimating the impact of absence in their organisation. AXA PPP were under-recording their absence by over 15%.

In the current economic climate where businesses are trying to maintain their performance, they should be maximising operational efficiency and striving for optimal attendance levels, not just the average for their sector.” However, introducing reliable recording on its own won’t make the difference for businesses, warns David Prosser. “Good absence management will involve a culture change and training for line managers. SAM flags up those cases needing attention - either the people who are off regularly but for short periods, or the people who need support because they’ll be off for some time. Training is needed to make sure that managers know how to deal with the absences in line with company policy.”

Dudley Lusted supports this view “SAM was implemented so that our absence rates were recorded accurately for the first time. By the end of 2007, we had achieved a real reduction in absence, and by the end of this year the results will be even better! It was the availability of data for managers, a clear focus on the issues, and some specific management training that has achieved this for us. I am confident that SAM is a tool that can help other employers to replicate our results.”

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