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By Tom Pope At one point the Rockford Health Systems (RHS) suffered from losing too many benefit dollars when workers called in sick. Unscheduled absences, a large chunk of benefit dollars, ended being paid out at the end of the year as people used all of the allotted time. Today, however, a paid time off (PTO) policy merges sick time with vacation time for the Rockford, Ill.-based RHS. Employees can either use the time or carry it over for the following year. Result: People tend to call in sick less frequently and the organization loses less valuable worker time during on-the-job hours. "It significantly reduces the actual sick time," said Heidi Elsbree, benefits manager for the RHS, an integrated delivery system including a hospital, a clinic and health insurance plan with 3,500 workers. "It's not a punitive policy. We don't ask why someone is going to be off." Managers can schedule time off in advance or set up overtime. An organization has more control with a PTO policy because the time off is logged differently, Elsbree explained. Nonprofits are using strategies, such as the PTO policy, to lower last-minute absenteeism. Different sized organizations saw the PTO as the best policy, according to the recent CCH Unscheduled Absenteeism Survey conducted by CCH Incorporated. CCH is a Riverwoods, Ill.-based provider of tax and business law information. Unfortunately, the survey also showed that only 27 percent of workplaces interviewed had a PTO-type of policy in force. The survey randomly polled human resources executives of U.S. companies and nonprofits that totaled almost 800,000 employees. Workplaces were divided into eight segments, including manufacturing, finance and banking, health care, retail, service, utilities, universities and government. Unscheduled worker absenteeism remains a huge problem even though it declined by 7 percent in 1999. That dip should be compared to a spike of 26 percent the previous year, according to the CCH survey. Key findings show that stress has jumped 316 percent in five years as a reason for the absenteeism. Meanwhile, employers have lost as much as $602 per employee last year. The future looks bleak as 48 percent of human resource people believe the problem will get worse as companies move too slowly with effective relief methods. Health care organizations like Rockford were threatened by a 121 percent jump in absenteeism; universities saw a 17 percent hike and government experienced a 4 percent increase. "I was surprised that reasons changed for the absenteeism," said Nancy Kaylor, human resources analyst for CCH. "Personal illness is a smaller piece of the puzzle than the past, dropping from 45 percent in 1995 to 21 percent this year." Rising to the top of the list were stress and the entitlement mentality workers have that clamors for free time because people are drained, said Kaylor. Stress has more than tripled since 1995 when it accounted for only 6 percent of such absences. Personal illness and family issues still showed up as leading causes -- each at 21 percent -- followed by personal needs at 20 percent. "No demarcation exists between nonprofit and for-profits because the labor market is tight," Kaylor said. "People are doing more work and organizations are running on a tight ship." Some organizations are making inroads but the results depend on the size and sector of the organization. Dollars lost to absenteeism declined 20 percent but still costs an average of $602 per employee per year. Mid-sided companies with 1,000 to 2,499 and those with a workforce between 2,500 to 4,999 struggled with increasing absenteeism. These types of organizations in the survey employ 11 million people. Small businesses, however, showed a drop in absenteeism while the largest sized organizations experienced little change. The type of work done also reflected different amounts of absenteeism. Three of eight sectors -- health care, government and universities -- showed increases, while financing/banking and manufacturing reported low rates. Companies that deal successfully with absenteeism most often attribute the results to a developed strong work ethic -- 17 percent -- followed by a sense of loyalty, which came in at 16 percent. Fear of punishment has declined, indicating it may not be an effective way to deal with the issue, said Kaylor. A strong loyalty exists at California's Pasadena City College, where a catastrophic illness and injury leave plan has helped workers since 1998. The college's 2,000 workers serve a student population of 28,000. In the leave plan, workers obtain additional leave days if their allotment is used up. Days are actually donated from others staffers. Such a situation applies when an illness or injury incapacitates a worker or dependent. Co-workers are asked to donate leave for a specific worker. A campus-wide call occurs each year to build a pool of days. Any unused days are returned to the bank which, usually carries a 220-day balance. "Unscheduled absence is a problem for all nonprofits," said Sandra Lindoerfer, dean of human resources at Pasadena City College. "In the public sector, there has been a sense of entitlement to use sick leaves whether the person is ill or not -- all public sector employees seem to feel this." The catastrophic illness plan helps employee morale and builds loyalty, but the policy did not come about because of unscheduled absences. A college union went to the human resource department to aid an employee who suffered a catastrophic illness. Lindoerfer received legal advice that the California Education Code did not permit a donation of sick leave unless a plan like the pool was put in place. Lindoerfer warns that the pool of days system should have a balance that doesn't grow too large. "There is a business reason for keeping the size under control," she said. "An unfunded liability could erupt. If we have a certain number of sick leave days which are booked, the money is locked up and counted as a liability." While Pasadena doesn't have data on how the policy has effected morale or saved money, anecdotal evidence shows a number of people are working happily who would have faced a lack of pay for health insurance. "We asked for donations for many workers who are now back on the job. They have appreciated the support from peers," she said. A catastrophic leave policy ties into part of the overall absenteeism problem, said CCH's Kaylor. "Pasadena points out that a spinoff effect comes when employees feel good about where they work." One possible rise in absenteeism in healthcare could come about because of the lack of a policy in place as numerous mergers, acquisitions and changes occur. Also, a wide range of jobs go understaffed, such as those requiring nurses. "It's hard to tell the end of the work day from the employee's off time," Kaylor said. "People are more reachable with beepers and cell phones -- shutting down at the end of the day isn't as easy as in the past." Traditional sick leave plans do not address real issues. Employers have to develop programs that truly fit with today's work-life demands, said Kaylor. Family-friendly policies that work include childcare referrals, leave for school and flexible scheduling. More than one half of those surveyed (58 percent) indicated flexible scheduling was part of the operation, up from a scant 25 percent in 1997. Yet, leave for school was offered by only 26 percent of organizations and childcare referral by just 16 percent. A sick leave strategy is the focus of the Employees Benefits Division of the state government of Pennsylvania. The policy started in 1996 with an inter-agency team that wanted to target excessive sick leave. Motivational messages were set to appear on pay stubs that remind workers about the importance of maintaining a "healthy balance" of sick leave. Bulletin board notices went up to highlight employees who avoided financial problems as they used the leave in an appropriate way. Meanwhile, a new employee orientation promotes the importance of the leave as a benefit. At the same time, a tracking system from the state Department of Labor and Industry provides quarterly reports for each state agency. You can't get a total read on the absenteeism problem by the size of the company, however. Some very small companies do well because workers can't take off without disrupting the operation. Some very large organizations do well because the management pays attention to lifestyle issues. Organizations need to examine the amount of unscheduled absence to determine the best policy. A company could set up a series of focus groups or conduct formalized surveys to see the obstacles that the workforce faces. "An organization that might have a young workforce today could need childcare but might require elder care benefits in 10 to 20 years. You'll have a different mix down the road," she said. Dartmouth-Hitchcock Medical Center, a 5,000-employee facility in Lebanon, N.H., uses an employee assistance program (EAP) where workers freely go to cope with stress. "Local department heads try to keep an eye on stress behaviors," said Bill Geraghty, vice president of human resources at the medical center. "They remind people to use the EAP without forcing them. People sometimes need a friendly reminder. We often find they are stressed not only from the workplace but also from the home, and we try to help both." The EAP along with a childcare center that is subsidized 30 percent by the organization seems to makes a difference. "Absenteeism is not a growing concern," he said. A flexible work schedule has to fit the organization. Pasadena City College builds more flexibility into campus work schedules with its police dispatchers, as they operate on three, 12-hour-day shifts a week. This helps workers arrange personal lives better, said Lindoerfer. Yet, to Rockford's Elsbee, compressing the schedule has been used for a long time with healthcare and can help create stress because of the long hours. "That's why we offer different schedules to help employees decide on the right timing for them," she said. Flex time strategies don't work well in healthcare, however, because of the requirement to be staffed constantly, especially with hospitals and visiting nurse systems. Absenteeism has to be addressed in a series of ways, according to Lindoerfer. "I like the idea of trying to give employees a way to deal with stress in life, and very flexible work schedules are one way to juggle the items in life," she said. The overall message to human resource people rings to set up more programs that address lifestyle issues. "The labor market isn't going to change soon," Lindoerfer said. "It's up to HR to look at their tool box. If they don't address it, the problem will get worse."
Tom Pope, a New York City-based journalist, writes about management issues.
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