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How to Manage Unexpected Employee Absence and Increase the Bottom LineDecrease Overtime and Increase Scheduling Efficiency by Implementing Automated Time and Attendance Policies and Procedures

Eric Hoguet, Kronos Solution Consultant

WHITE PAPER | How to Manage Unexpected Employee Absence and Increase the Bottom Line

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Wouldn’t it be great if all employees showed up for work at or before their scheduled start times? Even better, what if they showed up for work every day when they were scheduled to work and worked the complete shift? Many managers dream of such a scenario, as this would make for an accurate employee schedule without the need for last-minute changes. Well, without proper planning, this will remain a dream because unexpected absences will always occur in the workplace.

Absenteeism can be caused by many circumstances, but in this paper, we concentrate on the phenomenon of working an unexpected “partial shift” and the three events that directly cause a partial shift, which, in turn, compromise scheduling efficiency and decrease overall productivity.

EVENT ONE — TARDINESSCareerBuilder recently performed a study revealing that nearly 29 percent of employees show up late to work at least once a month.1 Of this number, 16 percent say that tardiness is a weekly occurrence for them. Both figures are up 3 to 4 percent from last year, and experts expect the numbers to continue to rise. Of course, many instances of tardiness can be explained and even excused, but whether the event is excused or not, it puts management in a difficult situation. Depending on the length of absence, managers may have to decide how to cover the hours. Do you call in a replacement, do you move staff around to cover, or do you simply wait for the employee to arrive and work the remaining hours of the shift?

EVENT TWO — EARLY DEPARTUREWhether it’s minutes or hours, there is a cost to employees ending their shifts prior to the scheduled leave time. Often, the decision to leave early comes with an employee excuse and a manager’s decision. Depending on the industry, early departure is common as a result of slow business; however, early departure may also be caused by an employee’s desire to get a jump-start on the weekend, or evening activities, or tend to childcare emergencies.

EVENT THREE — LONG BREAKSAll employees should be allowed the opportunity to sit down, relax, or even leave the workplace for a period during their scheduled shifts; however, break time is one of the easiest things to abuse within the workplace, whether intentionally or unintentionally. For an hourly employee, the timing of the clock-in after a break is sometimes hard to manage due to outside factors such as traffic, lines, or even out-of-sync clocks. A late punch-in from a break results in lost productivity, and in many cases, an understaffed workforce, if even for a short time.

1 CareerBuilder, CareerBuilder Survey Reveals This Year’s Most Outrageous Employee Excuses for Being Late, January 26, 2017, found at http://www.careerbuilder.com/share/aboutus/pressreleasesdetail.aspx?ed=12%2F31%2F2017&id=pr985&sd=1%2F26%2F2017.

WHITE PAPER | How to Manage Unexpected Employee Absence and Increase the Bottom Line

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THE PROBLEMBecause absenteeism is unpredictable, it is extremely hard to plan for. Managers know absences will occur, and this unpredictability often should be factored into minimum headcount scheduling. In 2015, Gallup-Healthways Well-Being Index surveyed 94,000 workers across 14 major occupations in the United States and found that absenteeism-related productivity loss accounts for a staggering $84 billion in annual losses. The chart below shows the results of this survey by industry:2

Occupation Annual cost of lost productivity due to absenteeism (in billions)

Professional (excluding nurses, physicians, and teachers) $24.2

Managers/executives $15.7

Service workers $8.5

Clerical/office $8.1

Sales $6.8

Schoolteachers (K–12) $5.6

Nurses $3.6

Transportation $3.5

Manufacturing/production $2.8

Business owners $2.0

Installation/repair $1.5

Construction/mining $1.3

Physicians $0.25

Farmers/foresters/fishers $0.16

Clearly, absenteeism and its resulting loss of productivity is an issue that cannot be overlooked, as it has a significant impact on a organization’s products, services, and, of course, its bottom line. Lost productivity is not the only problem associated with absen-teeism. Indeed, absenteeism is directly related to lower employee morale and increased overtime. After all, when one employee is absent, another employee must cover for him or her. To combat the extreme direct and indirect costs of absenteeism, managers and organizations must create effective policies and procedures to deal with absenteeism.

POLICYMany organizations have some kind of absenteeism policy that outlines acceptable and unacceptable behaviors and details absence-related disciplinary actions. However, many companies do not publish and distribute these policies, resulting in individual managers handling each instance of absenteeism “off the books” and at their discre-tion. This subjective approach to absence management will naturally result in unfair and uneven treatment, and as a result, litigation, low employee morale, or instances of favor-itism. Maintaining a written policy and ensuring all managers uphold it will help avoid scheduling inefficiencies and create a level of consistency across the organization.

2 Gallup-Healthways Well-Being Index, The Causes and Costs of Absenteeism in The Workplace, July 10, 2013, found at https://www.forbes.com/sites/investopedia/2013/07/10/the-causes-and-costs-of-absenteeism-in-the-workplace/#1e7077653eb6.

WHITE PAPER | How to Manage Unexpected Employee Absence and Increase the Bottom Line

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Many employers have implemented advanced Absence Management software solutions (e.g, Workforce Absence Manager™) to reduce the impact that a planned, incidental, or extended employee absence has on organizations. But even with the help of auto-mated technology, some organizations continue to struggle, as proper management procedures have not been defined and consistently enforced. For automated solutions to be truly effective, management needs to articulate and implement organization-wide policies that all managers abide by.

What, though, makes a policy effective? The policy must be strict enough to enforce discipline when absences are common or cause problems, but flexible enough not to terminate those employees whose absence is uncommon or less frequent. While disci-plining habitual offenders is important, it is just as important to reward employees for good attendance to nurture employee morale. An organization must also keep in mind that one size does not fit all and policies may need to vary by department, location, or even employment type (i.e., part time or full time).

Find below an example of a retail organization’s attendance policy that outlines the various absences seen in today’s workplace and resulting discipline; along with an atten-dance policy that encourages consistent, reliable attendance:

Attendance Policy (Part-Time Hourly)

No call/no show (after 90 minutes late) = 6 points per occurrence

Call off = 2 points per occurrence

Late 10 to 90 minutes = 1 point per occurrence

Early departure = 1 point per occurrence

Over 5 minutes late returning from break = 1 point per occurrence

• You will receive an Attendance Tracking Document each time points are assigned.

• Employment will be terminated upon accumulating 12 attendance points in a rolling 90-day period.

• If you transfer departments, your attendance points will transfer with your employment.

• Attendance points are removed 90 days after they are gained if you maintain employment.

Attendance CreditEmployees completing every 180 days without an assessed absence or tardy will be awarded a 1-point credit. A positive balance up to 3 points may be earned. Credits expire one year from issue. An employee will not be terminated in situations where a credit expires, thus forcing an increase in attendance points to a terminal level.

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BENEFITS OF OUTSIDE CONSULTINGAn experienced workforce management consultant approaches each engagement by understanding the root of the problem, assessing both human- and technology-based factors to identify and minimize the causes of absence-related problems. Maybe the problem is not that employees are absent too often, but that they are not allowed proper rest between shifts, causing them to take breaks into their own hands. Or maybe the scheduled shifts are unrealistic in relation to forecasted sales, minimum headcounts, or even employee demand.

Today’s workforce requires employers to place employee needs ahead of organizational needs and to provide employees with the services and tools necessary to perform their jobs. Such services and tools include adequate and flexible paid time-off policies, mobile access to scheduling functionality, and the ability to control hours worked. However, managers must consistently and accurately reconcile productive and unproductive time when employees have the ability to control their schedules.

The responsibilities that come with management can present challenges when trying to balance timecard edits with everyday tasks. We must be cautious of the legal ramifications associated with asking to perform timecard reviews outside typical scheduled hours. Allowing the employees to control their schedules comes with many challenges, and as a result requires management to consistently and accurately recon-cile productive and unproductive time.

An outside workforce management consultant understands these problems and related risks and can recommend best practices and day-to-day activities that will both evaluate timecards efficiently and still allow the manager to “manage.” Many times, this is accom-plished by establishing schedule exception ranges that call out early, late, or missing punches in relation to the schedule. A consultant will suggest industry standard, custom-ized solutions for the task or issue at hand. Consultants can also establish a daily and/or weekly routine so the manager is only required to perform specific checks, instead of the overwhelming task of making sure every punch is accurate and planned.

EMPLOYEE PRODUCTIVITY AND ENGAGEMENTMaximizing employee productivity remains crucial to any organization’s success and its bottom line. All policies and procedures should have employee productivity and employee engagement front and center while keeping compliance in near sight. A recent Gallup poll revealed that nearly 51 percent of American workers state they are “not engaged.”3 The same poll reported that organizations with highly engaged employees experience 22 percent greater productivity, and that companies with sustained employee engagement have shown operating margins three times higher than those without it.

3 Gallup News, Majority of U.S. Employees Not Engaged Despite Gains in 2014, January 28, 2015, found at http://news.gallup.com/poll/181289/majority-employees-not-engaged-despite-gains-2014.aspx.

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By optimizing and automating the multifaceted scheduling process as well as consid-ering time-off, overtime, and equitable scheduling rules, management has more time to devote to their employees. In today’s workplace, successful employee engagement also requires having the tools available to access timecards, schedules, and benefit accrual time balances, and the ability to turn in requests. A mobile workforce allows for employees to manage their own schedules by setting availability, requesting to cover open shifts, swapping shifts, or simply to account for any absence needs. All this leads to increased employee engagement and improved productivity.

SCHEDULINGThere are many unique challenges associated with building a schedule in today’s work-place. An organization must be ready and able to adjust processes to meet the evolving workforce and maintain adequate staffing to ensure superior customer service.

Employee engagement can become another tool that you can use for more accurate scheduling, as engaged and inspired employees are more likely to show up for their scheduled shifts. The policies associated with absence and the manager’s ability to handle exceptions to the schedule in a timely manner also play a big part in sched-uling accuracy. Every minute hourly employees work outside their schedules should be accounted for and reviewed to report on the associated costs.

BRINGING IT ALL TOGETHEREven the best technology and most effective policies cannot completely eliminate employee absence. Planned and unplanned absences will always occur, but their impact on productivity, employee morale, and your bottom line can be mitigated. Keeping employees engaged is one way to reduce absenteeism. And creating a comprehensive absence policy that managers enforce fairly throughout your organization is another way to encourage employee attendance. We also know how complicated accurately scheduling a workforce can be and how an automated, intuitive workforce management solution like Workforce Central® provides the tools and data managers need to build accurate schedules that reflect employee preferences, availability, and skill sets. When policies and training are in place to encourage managers to adhere to fair, transparent scheduling practices, automated technology can play a vital role in helping your organization schedule the right people at the right place at the right time and react nimbly in instances of unexpected absenteeism.

ABOUT THE AUTHOREric Hoguet has over 10 years of workforce management consulting experience with specific concentrations in Time and Attendance, Scheduling, Payroll, and Human Resources. Eric’s functional and technical experience within the industry has led to many successful implementations of complex business solutions over the years, both in

the U.S. and abroad. His educational experience includes a bachelor’s of finance from Missouri State University and a fundamentals of payroll certification.