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Automation makes Absence a “Professionally Managed Predicament”

by on March 22, 2013

Abstract: With the modern-day Absence Management gaining the status of “empowerment”, organizations are most likely to become better cost managers.

Absence is a productivity killer and in its roots, absence management was all about cost and loss management. However, the modern professional world has been able to adopt a humanistic approach with regard to absence management by highlighting the importance of work-life balance. And this has worked to point out the simple truth – absence is inevitable! Acceptance of the fact has inspired modern organizations to make absence planning an integral part of workforce management. With absence management  getting an employee-friendly appearance, organizations are most likely to leverage the benefits of sophisticated absence planning tools that are devised to guarantee unhindered workflow. Based on high-level coordination initiatives, absence management tools   provide managers with a transparent platform that enables them to avoid last-minute surprises. An efficient management of employee absence  works to strike the perfect balance between personal entitlement to leave and future operational requirements.

The Cost Chronicle

Inappropriate management of absence can cost organizations more than 8 percent of payroll. However, organizations might want to reconsider their “entitlement” culture with a 2010 Kronos survey claiming that the full cost of employee absence may shoot up to an equivalent of 35 percent of payroll. The impact of absence can be measured in terms of lost wages and productivity, loss of profitability, administrative burden, lower employee engagement, and customer dissatisfaction. Absence, whether planned or unplanned, carries the following cost implications:

  • Decrease in Productivity: Efficiency of operations is most likely to get compromised when managers assign the extra work to other employees. The pressure of extra workload gets amplified when employees are required to train or assist new or replacement staff. Performance of overtime duties may affect employee morale and this may go a long way to cause adverse impacts on service delivery.
  • Financial Costs: The organization may need to bear the burden of extra costs that normally accrue in the form of overtime fees and wages of replacement workers.
  • Administrative Costs: Vendor services and staff time required for absence control and additional efforts applied for the hiring of replacement employees or the re-assignment of the other employees invite administrative costs.

Numbers Speak!

An annual survey report on absence management, published by the Chartered Institute of Personnel and Development (CIPD) in 2012, revealed the following cost picture:

Average annual cost of absence per employee per year  

                                                                                                   

Cost (£) per employee per year Median  5% trimmed mean Maximum
All

600

1 187

4 389 173

Manufacturing and production

456

971

80 000

Private sector services

513

861

52 000

Public services

647

721

20 000

Non-profit organizations

700

44 975

4 389 173

This table was included as a part of the CIPD’s thirteenth national survey of absence management trends, policy, and practice. The cost analysis was based on inputs from 667 UK-based organizations that employed a total of 1.7 million personnel.

The See-through Setup

The objective of absence management is to prevent situations of calendar clashes and allowance disputes. And this actually works to promote a productive work environment that rests on the pillars of administrative efficiency. Effective absence management relies heavily on the proper calculation and allocation of benefit accruals. This process needs to be based on transparency so that managers can design on-time alternative “cope-up” strategies. This, in turn, calls for the easy availability of auditable leave and absence related data. With automation being the ultimate solution for most of the problems in the present-day world, we can definitely expect to see phenomenal results through the deployment of an automated absence management  process.

Tech Talks

Automation of leave management  not only gives HR and line managers the ability to manage time-off with minimal impact to business, but it also promotes greater employee engagement. It provides employees access to past leave records and accurate information on available benefit days or current account balances and future accruals and this way, it facilitates decision-making. The electronic leave management process  provides employees with a self-service platform that allows them to make “responsible” leave requisitions. It also enables line managers to coordinate leaves more efficiently within their team or department.

The Way Ahead

If you think deeply… automation, how hi-tech it might appear to be, is actually empowerment in its core essence. And such empowerment comes through a greater control over information resources. With modern-day organizations demonstrating an employee-centric attitude in all their attempts to reach productivity targets, we can expect to see further evolution of the absence management  technology which may actually challenge the current cost-absence correlation.

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