Programs that Slash Costs and Build Morale

Buck Consultants and Aon give their collective advice.

September 18, 2003
Before you throw out your current sick leave system, you must take yourcompany’s temperature, says Cory Sherman, an expert on absentee reductionprograms at Buck Consultants Inc. in Atlanta.

    “In my experience sick-time abuse can be reduced only through a carefulanalysis of its root causes because high levels of sick time are often a symptomof other problems,” she says. “A programmatic change, no matter how wellintended or how popular, isn’t going to change a systemic or behavioralproblem. That’s why companies have such a tough time getting it right.”

As an example, Sherman cites a major hotel management company that wasexperiencing extremely high absentee rates at one of the outlets in its chain.Was it possible the workers at one particular unit just got sicker more often?Or, was something else going on?

“The first thing we advised the company to do was to switch managers withanother unit that had low absenteeism rates,” Sherman says. “It didn’ttake long for the workers in Hotel A to get sick and for the workers in Hotel Bto make a marvelous recovery. The problem wasn’t the company’s sick leavepolicy but rather a bad individual manager.”

For companies that get serious about sick time abuse, they can expect to seeabout a four percent reduction in payroll costs, says Cynthia Keaveney, atime-away-from-work expert at Aon Consulting in Ann Arbor, Michigan. Keaveneyagrees with Sherman that it takes planning and good communications to besuccessful.

Their collective advice:

• First, look at all the areas of the time away from work benefits yourcompany offers. Assess what each category is costing. Include sick time,vacation time, family medicalleave, short- and long-term disability costs inyour calculations.

• If sick time abuse seems high, diagnosis the problem. Consider whether it’sthe symptom of a behavioral issue such as a bad manager, or a problem with thesick time program itself.

• Traditional sick leave, which employees accrue as an “unearned benefit,”is a concept your company may not want to sacrifice. Even if you know thisbenefit is being abused by a few employees, sick leave as a defined benefitsplan may be worth keeping. It works as an important safety net that can inspireloyalty among others over the long run.

• What you do in one division may not work in another setting.

• If you decide to change programs, figure out exactly what message youwant to send to employees. Some may object to making a serious benefit into agame, for example.

• Paid time off plans such as the one implemented at the Lahey Clinicinspire honesty on a day-to-day basis but can punish workers who really do getsick. That has been the experience at Seattle’s Clean Air Agency. Considersuch hybrid approaches as allowing the banking of some unused sick time fromyear-to-year, or matching it with a short-term disability program.

    • Communicate your intentions to your staff. It is often not what thecompany does but how a new plan is presented that is behind a successful change.

Workforce, September 2002, p. 60 -- Subscribe Now!