A tale of great absence managementA short story about the impact of good and bad absence management in SMEs

Identities in this story have been fictionalised based on real scenarios in the workplace, discovered through our own research. All costs are accurate.

Absence and SMEs

According to our research, only 1/3 of SMEs have a sufficient system to record absence. The difference between managing absence well and managing it badly can be significant.

Let’s take Cathy - a lady who owns three cake shops across London and employs 28 people. How she manages her absence can have a huge impact on her business, insurance and most importantly, her people.

What happens when Cathy isn’t on top of absence?Cathy doesn’t have an online absence management system and instead relies on paper holiday requests and return to work forms. Organising and managing this is a drain on Cathy’s time.She also isn’t the best at organising her desk, mixed with having to transfer paperwork across the three locations, it’s easy for her to misplace forms and forget to record holiday, resulting in staff shortages. This negatively impacts customer service and risks losing business and returning customers.Cathy also hasn’t noticed that Sally, a baker in one of the stores, has been taking sick days at regular intervals, often 2-3 days at a time every 3 months. Not only is this absence having a financial impact on her business but when she does notice, she is unable to confidently approach Sally to question her absence as she doesn’t have the data to back her up.

Her people start to feel the pinchAs Cathy hasn’t been recording and monitoring absence she hasn’t realised that Jack, a cashier, has now been absent for 3 weeks. This means that Cathy hasn’t been able to support Jack and direct him towards services that could help him to get better quicker and return to work. Jack is feeling unsupported and instead of getting better, is struggling with the idea of returning to work.

For those at work, absent colleagues and double booking holidays has placed more pressure on the team, which is negatively impacting on productivity. This leads to low morale as the team feel overworked and unsupported and some consider leaving for a more harmonious environment.

As does her bank balanceJack is still unwell and hasn’t returned to work for three months. It turns out he has a back problem that has been left untreated, got worse and means he is likely to be off for longer.

Cathy has to pay her people Statuary Sick Pay of £88.45 per week for the first 28 weeks of absence. Without insurance, she is having to pay these costs in addition to more overtime for her team to cover the workload. She also has no access to rehabilitation services, so cannot provide much medical support to Jack that would help him back to work.

Cathy is left hoping that Jack recovers soon. She has no long term sick pay insurance in place either so after six months will face a moral dilemma whether to continuing paying him.

So, what happens when Cathy is on top of absence?

If Cathy was to use an online management system, time taken to record and manage absence would be reduced and she would be able to see an overview of her people’s holiday and sick entitlement easily.

Cathy would also be able to recognise recurring absences and find out the cause behind them. She would then be able to confidently approach Sally and provide tailored support or act on illegitimate absence with data to back her up. This places her in a stronger legal position too.

Her people are taken care ofBy managing absence in an online system, Cathy is immediately alerted to Jack’s absence and the given reason. As she also has insurance in place, her insurers are then able to intervene quickly and provide Jack with physiotherapy to help him back to work sooner. Even if she didn’t have insurance, she would still be able react more quickly to the absence and better support Jack to return to work.

As Cathy has been supporting Jack from the outset, her other employees feel valued in their role and comforted that support will be given if they were to fall sick.

Cathy is also able to see all absence and agreed holiday in an online calendar, and is therefore able to organise cover and keep her business ticking over as normal. This gives her people confidence that their holiday is confirmed and they don’t need to worry about covering for others at the last minute.

Taking care of the costCathy has to pay Jack Statuary Sick Pay of £88.45 per week for the first 28 weeks of absence, so by reacting quickly and requesting support from her insurers, Jack is able to return after only 5 weeks of absence.

Such a quick return means Cathy spends less on Statutory Sick Pay, and avoids any further long term costs such as recruiting and training temporary staff to cover for Jack.

It also means she doesn’t need to make a claim on her long term sick pay insurance, which would otherwise start paying Jack after 28 weeks. With a great claims record, next years premiums remain affordable.

Did you know absence management and sick pay come as a package?Ellipse are only group risk insurer to integrate absence management and income protection. This means we can react to absence data proactively and intervene quickly to help an employee back to work.

It has 3 major components which complement the core long-term disability insurance cover:• Early notification to a case manager; • An online absence management tool, TeamSeer; and• Support Matters, a workplace support service.

It’s not as expensive as you think If Cathy was to invest in disability insurance that included absence management software, a basic benefit level, 50% of salary, no escalation, 28 week deferred period and payments only continuing for three years for 28 employees would cost £2,614.

The typical cost for a standalone absence management system is approximately £30-£40 per employee per year, which would cost Cathy roughly £1,000.

Depending on how you look at it, Cathy has gained herself £1,000 of valuable software for free, or has nearly halved her insurance and absence management costs.

(Plus because absence management is being implemented, Ellipse discount their premiums.)

TeamSeer is an online absence management and holiday planning tool, integrated as part of our Sick Pay Complete product.

We believe in early intervention and case management. Businesses with Sick Pay Complete must record their absence in TeamSeer and then we will be automatically notified when an absence lasts four weeks and depending on the illness, this can be earlier.

TeamSeer is easy to setup online by the employer and employee data is held securely and kept completely confidential. More information about Sick Pay Complete and TeamSeer can be found on our website.

Ellipse is the trading style of the UK Branch of ERGO Lebensversicherung Aktiengesellschaft, which is registered in England. Registration Number: BR010594.

Registered office: 15 Bermondsey Square, London SE1 3UN.

ERGO Lebensversicherung Aktiengesellschaft is authorised by BaFin (the German regulator), registration number 1184 and is subject to limited regulation by the Financial Conduct Authority. Details of the extent of our regulation by the Financial Conduct Authority are available upon request.