When it comes to your underlings, do you look the other way when the poor souls fake a sick day so they can loll about? Such a luxury may soon be a relic of the analog past. The corporate cost slashers have a fresh target in their sights: the absent employee. Some companies are instituting tough policies to combat hooky. Others are limiting the amount of time you can take off before unpaid leave kicks in. And then there are those using brawny human resources software that mines worker data and analyzes no-shows--from the hourly scut worker straight up to the middle ranks of the salaried class.
Employers have long been clueless about the magnitude of the absentee problem. Now, though, armed with new research about absenteeism's productivity costs (an estimated $74 billion lost annually), sophisticated tracking software from companies such as Kronos, and stern directives from CFOs, more human resources departments are starting to confront the problem.
Consider that 85% of labor costs pay for actual work. The rest goes to what HR wonks call "nonproductive time" and what the rest of us call vacation, caring for a sick child, or nursing a hangov--ahem--cold. Legitimate absences are one thing. But absence abuse--what HR consultants like to portray as a stealthy, bottom-line killer--is on the rise, with employees collecting disability, vacation, health insurance benefits, or personal days to which they aren't entitled. Rising obesity rates also are swelling the ranks of the absentees, with overweight employees gone 13 days more, on average, than healthy-weight workers. And as companies push workers harder, workers are pushing back--by taking advantage of every last moment of time off.
The new climate was evident last year when word came of Wal-Mart's (WMT) revamped absence policy. It mandates that workers will have to call an automated 1-800 number instead of notifying their managers, who can be subjective. It also doles out demerits for leaving work early or arriving for work 10 minutes late--barring something as extreme as a terrorist attack or a co-worker's funeral. Four unauthorized absences, and disciplinary actions begin. Wal-Mart declined to comment.
While the chance to save money is welcome to CFOs, to some employees the new crackdown smacks of Big Brother. After he was out sick for two days, a Delphi laborer in Rochester, N.Y., named Stanley Straughter was asked to sign a waiver releasing his medical information to the company. Straughter, citing privacy concerns, refused and was fired, he claims. The Equal Employment Opportunity Commission, which says such requests for medical information for absent employees are standard at Delphi, has since filed suit against the automotive supplier on Straughter's behalf. Delphi declined to comment.
Although theirs may be among the most draconian measures, Wal-Mart and Delphi are not the only ones putting worker whereabouts under the microscope. Dell (DELL), Georgia-Pacific, and Southwest Airlines (LUV) are just a few of the companies availing themselves of the services of a growing group of consultants who are rebranding "lost time" into the new science of "absence management." Southwest says new software that tracks the under-the-wing crew has already saved the company $2 million annually in reduced administrative costs alone. The carrier plans to roll out automated absence tracking for headquarters staff next year.
Analyzing absenteeism isn't just leading the corporate cops to malingerers and chronic Mondays-off types. Workforce intelligence is also providing insights into undetected management problems. At one manufacturing company, a group of employees loathed their manager's style. The sentiment went unnoticed by the C-suite until a software program created by Convergys (CVG) started scouring the department's data and found it had a high absence rate compared with other units. At that point, Convergys performed an "intervention" with the manager's employees: confidential focus groups where the workers could vent. Once the company attended to the problems, attendance rose.
When it comes to the creative class, though, some companies are doing away with the notion of tracking the global work clock. At IBM (IBM), workers take as much or as little time off as they want. "Tracking time is passé; we could never go back," says Dan Pelino, who heads the company's health-care business. At Best Buy (BBY), the electronics retailer's results-only work environment means employees are evaluated on their output, not their hours. Show up as much--or as little--as you like. Yes, some abuse the policy. They get one warning--and then they're out.
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The Cost of Absenteeism A Marsh/Mercer Health & Benefits study found that more than half of companies report that unscheduled absences result in reduced production. Nearly 40% report lower levels of customer service and sales. To fight back, companies are tightening controls by requiring doctor's notes after a predetermined number of days (56%); tracking unscheduled absences and including them in performance reviews (48%); centralizing reporting systems with tracking software (41%); offering paid-time-off banks instead of vacation (39%); and limiting the number of acceptable, unscheduled absences (20%).