CAM Solutions - Absolv!

Good Day,

As you may well know, absenteeism costs the economy in excess of R19 billion a year. And that just covers the direct costs; indirect costs could count for two to three times that figure. There are many reasons for absenteeism - people who are genuinely ill and those people who abuse the system. Sick leave is a conditional privilege, not a right to be taken at will.

Do you know how your company contributes to this figure of R19 billion a year? Do you know what your current absenteeism rate is? Do you know how to filter through the abusers of sick leave from those who are genuinely ill? Are you targeting specific people within your organisation - or are you dealing with the problem at hand? Absenteeism could be costing your company huge amounts of money each month and you can't fully handle the problem, or resolve your absenteeism crisis, until you start to measure and benchmark where you currently are.

And this is where Absolv comes into play. Absolv is a software program, run over the Internet that aids you in monitoring your absenteeism as a company and per individual in your company. Not only can we aid you in reducing your absenteeism cost, we can highlight all areas that require your attention in creating a work force working to combating absenteeism. It is vital to know what your absenteeism rate is and then look at ways of bringing down this absenteeism rate through various interventions.

CAM Solutions deals mostly with sick absenteeism and other forms of unplanned absenteeism (AWOL, Family Responsibility Leave etc) that is measured and reported on through our ABSOLVTM software. This software produces a report called the Absenteeism Management Report (or AMRTM for short) – I have attached a sample AMR for you to view. This sample report will give you a good idea on what type of information you will be able to receive for your company.

Please note that it is extremely difficult to determine the “normal” absenteeism rate in any sector of the economy as sick absenteeism is dependant on a number of factors, including:

• The demographics of the employees
• Age
• Sex
• Responsibility levels
• The nature of the industry

Due to the above factors it’s not possible to determine an appropriate norm for each sector but rather to determine the absenteeism profile of each employer and to consider each of the factors separately. The factors to consider are:

• Average absenteeism rate
• Average length of each sick leave absence
• Average number of sick leave incidents per annum
• Short term ratio versus long term ratio
• Absenteeism rate per age category
• Absenteeism per department/region etc
• Absenteeism per earnings level (or better still per grade)

The above can be achieved by producing an absenteeism management report (AMR™) and analysing this in detail.

At a micro level each employee can then be measured against their peers using benchmarks such as:

• Average absenteeism rate
• Average length of each sick leave absence
• Average number of sick leave incidents per annum
• The CAMS Absenteeism Index (AI™)
• The CAMS Health Index (HI™)

In general we find that sick absenteeism levels should not be more than 2% per annum, i.e. if an employee is expected to work 250 days during a year then they should not be off sick more than 5 days per annum, on average.

We have found the absenteeism rate is higher for lower paid employees versus the high income earners. This is however more related to responsibility levels rather than income levels. Low paid employees, generally, have less responsibility, which then affects job satisfaction and morale which has an impact on absenteeism.

This report also aids employers in assisting those employees who are genuinely ill by highlighting those diagnoses that require attending to.

Should you be interested in using this software, kindly log onto http://www.absolv.co.za for more information.

• To use our software online, log onto: www.absolv.co.za
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• For more information on CAM Solutions, log onto: www.camsolutions.co.za

Kindly confirm receipt of this e-mail by return e-mail.

Yours faithfully,

Michelle Bennett
EXECUTIVE PA

CAM Solutions
Providing Software Solutions in Health and Absenteeism Management
Tel: 041-368 1068
Cell: 084-236 6388
Fax: 086-524 1819

View our Absenteeism Blogs:
http://camsolutions.blogspot.com/ or http://www.absenteeism.iblog.co.za/

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Help Desk Queries

CAM Solutions boasts a help desk where you can e-mail queries to help@camsolutions.co.za and we will endeavour to assist you with your absenteeism related queries. We recently received this query:

What is a normal absenteeism in the automotive manufacturing industry? How does it differ between those who earn $15.00 and those who earn $28.00 per hour?

The answer:

CAM Solutions deals mostly with sick absenteeism and other forms of unplanned absenteeism (AWOL, Family Responsibility Leave, etc). It is extremely difficult to determine the "normal" absenteeism rate in any sector of the economy as sick absenteeism is dependant on a number of factors, including:

• The demographics of the employees
• Age
• Sex
• Responsibility levels
• The nature of the industry

Due to the above factors it's not possible to determine an appropriate norm for each sector but rather to determine the absenteeism profile of each employer and to consider each of the factors separately. The factors to consider are:

• Average absenteeism rate
• Average length of each sick leave absence
• Average number of sick leave incidents per annum
• Short term ratio versus long term ratio
• Absenteeism rate per age category
• Absenteeism per department/region etc
• Absenteeism per earnings level (or better still per grade)

The above can be achieved by producing an absenteeism management report (AMR) and analysing this in detail. At a micro level each employee can then be measured against their peers using benchmarks such as:

• Average absenteeism rate
• Average length of each sick leave absence
• Average number of sick leave incidents per annum
• The CAMS Absenteeism Index (AI)
• The CAMS Health Index (HI)

In general we find that sick absenteeism levels should not be more than 2% per annum. i.e. if an employee is expected to work 250 days during a year then they should not be off sick more than 5 days per annum, on average.
We have found the absenteeism rate is higher for lower paid employees versus the high income earners. This is however more related to responsibility levels rather than income levels. Low paid employees, generally, have less responsibility, which then affects job satisfaction and morale which has an impact on absenteeism.

The benchmark absenteeism rate for the Automotive Industry (based on South African statistics), which according to our records is 1.77%. This is calculated (incident days / exposed days as a %). According to our research the lower income earners take more sick leave, but one also needs to consider the impact of the indirect costs.

Should you have any query you'd like us to assist you with, kindly e-mail us on help@camsolutions.co.za.

Kind regards,

THE CAM SOLUTIONS' TEAM

Calculation of Absenteeism Rates

By Johnny Johnson – CEO of absenteeism management specialists, CAM Solutions

Many employers do not pay enough attention to absenteeism, both the measurement and affects of absenteeism and its control. Almost all employers understand that high absenteeism rates have a negative affect on their business but the monetary effect of abnormally high absenteeism is usually not quantified.

AIC Insurance specialises in the underwriting of the direct cost of absenteeism and proactively managing the time that employees are not at work. Through contact with over 60 South African companies, we have found that in most instances employers are not aware of their absenteeism rate or they have not measured the absenteeism rates correctly. The old adage “You can’t manage what you don’t measure” applies and we have found that in the cases where there is uncertainty concerning the level of absenteeism there is almost always a low level of management control accompanied by a high level of absenteeism.

It is also common for employers, who have calculated their absenteeism rates, not to quantify the monetary cost of the absenteeism. This is particularly important with regard to unplanned absenteeism, which is mainly sick absenteeism and absence without leave (AWOL). The absenteeism rate multiplied by the basic earnings will provide management with the direct cost of absenteeism.

The indirect cost of absenteeism is often overlooked. This includes the cost of replacing the absent employee in critical positions, possible overtime payments to these replacement workers, as well as the affect the absenteeism has on workforce levels, medical aid costs, group life and disability premiums. We estimate that the indirect cost of absenteeism is at least 200% of the direct cost of absenteeism at normal absenteeism levels. This factor will be different for various industry types and will also increase when the absenteeism rate increases.

The general lack of focus on absenteeism is possibly due to the fact that the costs of absenteeism are not shown separately on management reports. This could be due to the fact that the amount incurred for paid absence is usually grouped with all staff costs. This includes the unproductive portion as well as the cost of replacement workers and overtime. The indirect costs are more problematic and it is very seldom that employers quantify the monetary affect that absenteeism has on the indirect areas such as production volumes, quality and morale.

Steps to manage and control absenteeism
It is important for any employer to follow a focussed approach and it is recommended that the following steps be considered when developing a plan to manage and control absenteeism.

Develop a company attendance policy and communicate this to all employees. The importance of attendance should be stressed and the policy should be communicated to all employees as a means of developing a culture of attendance. A balance between being firm and fair is suggested.

Evaluate and modify company policies and procedures to ensure that the correct framework exists within which to manage and control absenteeism.

Design a detection, monitoring and reporting system which will provide accurate and reliable data for reporting on absenteeism. This should ideally be based on information extracted from the time and attendance system, which is then filtered until final absenteeism data is obtained.

Calculate absenteeism rates and break these down into the various forms of absenteeism - both planned (annual leave, study leave, training leave, paternity, maternity leave, etc) and unplanned (sick leave, AWOL, family responsibility etc). It is recommended that these are incorporated into the monthly management reporting system.
Determine the appropriate level and department that will be responsible for absenteeism management. The best results are achieved when the departments where unplanned absenteeism has the greatest negative affect assume direct responsibility for managing absenteeism. The Human Resources Department should play a support role only - by assisting with setting policy and providing guidance for counselling and disciplinary procedures.

Prepare a detailed study to determine the affect that absenteeism has on all costs, determine appropriate factors and apply these to the direct absenteeism rates to obtain the total cost of absenteeism for the entity. This can be done by department or more accurately per employee.

Over time, develop benchmarks for certain absenteeism indicators and measure employees against these indicators.
Based on the broad results and individual profiles determined over a reasonable period of time, establish the causes of high absenteeism. The causes could be due to, among others things, social problems, occupational risks, employee morale, poor management and control systems, health problems, poor working conditions as well as delinquent employees.

Formulate attendance management guidelines which will focus on:
Policy
Ongoing monitoring and reporting
Introduction of employee assistance programmes

Calculation of sick absenteeism rates:
The calculation of sick absenteeism rates can at times be complicated with various methods evolving. As a rule, the rate should be based on productive lost time as a percentage of total available productive time for a certain period.

We recommend using the following formula:
A = B / C

Where:
A = Absenteeism rate for the period
B = Total number of mandays lost due to absenteeism in the period
C = Total number of working mandays available in the period

And where:

C = D x E

D = Total employees planned to work in the period
E = Number of available working days in the period

Where shifts are worked the calculation is more accurate if the “days” in the above formula is changed to hours.

The calculation and accumulation of the mandays/manhours lost due to absenteeism and the total planned working mandays/manhours per working period or shift will improve the accuracy of the measurement.

In addition the calculation should be performed per department to provide further indications on where possible interventions are required.

The higher sick absenteeism rates in the lower income groups are due largely to their poor living conditions and also reflects the type of work, mainly manual, that these employees are involved with. The level of income is also an indication of the level of responsibility. We have found that employees with lower levels of responsibility have higher levels of absenteeism.

Sick Absenteeism in Large Companies versus Smaller Companies:
Small employers are more successful at limiting sick leave abuse than the larger companies.

Feed your employees well & prevent Diabetes!

National Diabetes Day – 14 November
Feed your employees well to prevent chronic illness such as diabetes

A total of 7.6 % of the employees in a study comprising a sample of more than 100 000 employees in 60 South African companies took time off because of chronic illnesses that are most often associated with diet. These included diabetes, heart disease, cancer and hypertension.

Johnny Johnson, Chief Executive of absenteeism specialists CAM Solutions says that these chronic illnesses cost the economy R1. 4 billion in the last year in the form of lost productivity.

This amount could be trebled when taking into account the indirect costs of an absent employee such as replacement labour, training and lost time.

“It makes financial sense for employers to guide their employees to follow a healthy diet, to either help prevent or control these chronic illnesses.

“If we find that a company has a high rate of absenteeism due to chronic illness we refer them to wellness management experts who guide employee on their diet at home, as well as revising food on offer in the company canteen. This helps control and prevent illness and therefore their ability to be productive,” he says.

Some companies, such as Continental Tyre in Port Elizabeth offer their entire staff nutrition supplement in the form of fortified cereal on a continuous monthly basis. This vitamin-packed maize meal is packaged in such as way that employees can take it home and share it with their immediate families.

“We have seen a definite increase in general health of our employees since starting this programme,” says Zuki Bhaku, employee relations manager at Continental Tyre.

Nutritional therapist Heidi Du Preez adds, “Cancer, heart disease, arthritis, diabetes, chronic fatigue syndrome and even allergies are often the result of a simple nutritional deficiency which can be corrected or controlled with healthy eating. Our diet has the distinction of being the only major determinant of health that's completely under our control.”

Du Preez says that a natural whole food diet should comprise fresh fruits, vegetables, nuts and seeds, whole grains, legumes and filtered water. Lean organic meat, free range eggs and limited dairy should also be included.

The virtual office set up and productivity levels

Employees working from home in a virtual office environment are generally more productive than their counterparts in the “traditional office” environment. This is according to Johnny Johnson, CEO of Corporate Absenteeism Management Solutions (CAMS), and absenteeism management specialists that generate statistical data, which companies can use to monitor their absenteeism levels.

CAMS owns sick and health management software which is used by various service providers to optimize their consulting services for their clients. In addition, CAMS collates sick absenteeism information and provides benchmarks and overall sick absenteeism statistics. The actual sick absenteeism management consulting services can be provided by preferred providers contacted with CAMS.

Johnson says that among the major causes of absenteeism in South Africa are work and life issues, which include stress and burnout as well as personal needs and family crisis. When people work from home, they are less stressed, have more time to do their work and can take care of family issues because of their flexible working hours.

“According to our research, there were 524 incidents of sick leave related to psychological reasons, such as stress and depression in 2005, which means 4.5% of all sick leave days taken were due to stress. This particular form of sick absenteeism is no longer an issue in those who work from home as they can manage their time, and thus their stressors, more effectively, “ says Johnson.

“CAMS recently sold the wellness management and absenteeism consulting portion of its business and now my team and I work in virtual offices which are connected via a network. Whereas before, I had 10 people on the payroll, now there are a handful of us connected via the latest technology. I found that the payroll and overheads of the larger company became the tail that wagged the dog. I spent more time dealing with personnel issues than I did with growing the business.

“Now I prefer to work with other free agents on a contractor basis. Finding a good contractor is as difficult as finding a good employee but the relationship is more businesslike and less paternalistic. I work with IT personnel, designers and my PR on this basis,” he says.

“It’s the Information Age and the virtual office is the way of the future. In terms of traffic congestion, the expenses of running a large office, employee cost of travel, as well as sick absenteeism due to the stress of not being at home to solve crises, it makes perfect sense to do business this way.

“My team meets up regularly to discuss matters needing attention. We also visit clients on site when needed. We use wireless networks connected over the Internet via broadband with secure Virtual Private Network (VPN) connections between each other. These methods increase our productivity and help keep our costs down, thus making the business more efficient and increasing the value we can deliver to our clients,” Johnson notes.
Executive PA Michelle Bennett at CAMS says, “Working from home has actually been a huge adjustment for me – I really miss the corporate set-up. What I do like though is that I can work on my own time, there are times when I can’t sleep and am up at 05:00 and I start working. Or there is nothing good on TV in the evenings so I work. The flexibility is great, but I miss the interaction and believe it or not – I miss dressing up for work.

“I think that I am more productive when working from home, as there are no interruptions, meetings or traveling to worry about. I easily add about an hour or two of extra productivity time to my workday. And its pretty much stress free.” she adds.

Blue collar workers take more sick leave

Statistics issued by Corporate Absenteeism Management Solutions (CAMS) have shown that absenteeism in South Africa is greatest among production and factory workers who earn less than R 5000 per month.

The CAMS statistics, recorded in 60 South African companies with more than 7000 employees, state that employees earning R 5000 per month or less have an absenteeism rate of 2.30%. This rate drops to 1.33% in the group that earns between R 10 000 and R 15 000 per month. The absenteeism rate is calculated by dividing the number of days employees are absent by the number of days they should have been at work, over a period of one year.

Chief Executive of CAMS, Johnny Johnson says, “Generally, higher absence is positively correlated with lower income earners, those who have lesser responsibilities and more repetitive, less satisfying work. Blue-collar employees have consistently higher levels of absence than their white-collar compatriots, who have more job satisfaction.”

“Sick absenteeism should at about 1.5% - which means that for every 250 working days per year, the average employee should take 3.75 days off sick. Most companies have an overall absenteeism rate of between 3.5 and 6% - way over the acceptable limit. Simply applying a return to work policy can reduce sick absenteeism to acceptable levels, saving companies millions,” he says.

Johnson explains that a return to work policy means that when employees have been off sick they must see their supervisors immediately on return to work. The supervisor must show concern toward employees and question them about the nature of the illness and if they need any further help. This communicates care and to employees who are sick and might need further medical help. It also curbs abuse because staff have to face their managers on their return.

Johnson adds that sick absenteeism costs the country about R 19 billion per year, so looking after sick employees and managing sick leave abusers correctly is just good business practice.