What is the cost of absence? A presentation by Rosie Green – Synergy Housing Group

Watch this compelling video where Head of HR at Synergy Housing Group - Rosie Green talks about how HR Software helped to tackle absenteeism in the workplace.

(Rosie Green, Synergy Housing Group) Thank you very much for coming to this presentation, my names Rosie Green and I’m head of HR at Synergy Housing Group, who are based In Dorset.

So what do Synergy do? Well were a registered central landlord and charity and we provide mainly affordable housing to people that can’t afford to buy or rent at market rates. However we do also build for outright sale and market rents and then we reinvest the money back into building affordable homes for people.

We have our own maintenance workforce which is about 100 people and they carry out all maintenance in our homes and we also have a care and support division of about 50 people who provide care in homes and in sheltered schemes for people that are vulnerable.

In your packs there’s a brochure in the front of it and there’s a couple of acetates, there’s also a marker pen, if I can just demonstrate it’s in this packet here and there was a marker pen on the front of it. Could I ask you draw what absence means to your company and the effects that absence has please. I’ll give you just a couple of minutes to do that, thank you.


    I’m going to ask for a couple of volunteers to come up and be prepared to put their pictures on the old fashioned overhead projector for me to describe what it means for them, so would any one like to put their hands up and volunteer? Ok, how about you would you like to come up and…. If you could stand there for me and if I give you the mic, if you could say who you are and what your picture says for it. I’m Heath, I’m a HR consultant. I drew the pound sign to represent the cost, which I’m thinking cost both directly but also productivity. The unhappy face, less so I mean obviously there’s concern for the person but it just damages morale of the people that have to cover the person who’s absent.

    When we do our absence training we ask our teams who have been trained to draw this, and this is one of the more clean ones that was there to be shown and what it shows is that it’s our customers that costs them money as well, we are a charity so we do have to be careful of that and also the loss of productivity for it. Well thank you for getting involved in that.

    So why did we have to look at our absence? Well Synergy have gone through massive change over about a three year period, we’d harmonised terms and conditions for three companies, all into one, we had our DO and trade guys they were paid on scheduled rates which leaded to salaries, we restructured the company and collapsed us into one, which saw quite a few people leave and what’s more to add the final insult to that we’ve relocated everybody to a different location.
    So it came about that I was looking at the April increases for 2011 and I was doing salary modelling and I found to my horror that our absences were running to 12.9 sick days per person per employee, which is a lot of money, it’s about 13.50 per person and that doesn’t include car allowances, it didn’t include temporary cover or any overtime for staff that had to cover for them.

    And the additional issues are we have a workforce that have to do appointments in people’s homes and if there not there to do it we have to get contractors in and in care and support we are contractually required to have people providing care and if there off sick we are paying for that in temps for it. So at harmonisation we had reduced the sickness from 6 months full pay to six months half pay to three months and three months, we found that for very few people the extra cost of that was one hundred thousand pounds, so what we did with that was increase holiday entitlement for staff, we brought in increased car allowances and also paid a company to provide us with non-paid benefits as well, so there’s some positive influences which said if we reduce the sickness cover we will give you more of this.

    However it was clear that this wasn’t working, sicknesses were in at 5% of payroll costs for it and as you can see the average payroll cost for sickness was £477,900 and we had no idea what the temporary cover was costing us or what the overtime was costing us, and I’m sure other organisations would feel the same on that, others may be better than us at managing for it.

    So I did a lot of research, I looked at something called the Bradford Factor and then I decided that I had to take a report into our executive team on what we could go forward for and the report I took in was that we should directly relate absence to pay, so those employees that had a lot of absence and in that particular year if it was more than twenty days would receive no pay increase and those that had short term sporadic absence would receive half the pay increase for it.

    I’m sure everyone has been there when you go into those meetings and you get unique agreement, everyone’s agreed, it didn’t happen here and I have to say that an engaging and heated debate took place amongst the executive directors on whether this was something they wanted to implement or not. However, we had researched well, I’d also engaged my manager and the CEO so it went through the exec team on a majority vote and we then had to get the non-exec board to agree it and strangely enough they were all in agreement, they were looking at the costs quite hard, we had actually run a programme on journey to excellence which was how do we provide an excellent service to our customers, so they approved it and we went ahead with it.

    As you can imagine, the outcome for those staff that were affected by it, a static happiness wasn’t one of the things that they first gave us when we spoke about it. We did have a few people complain, however for those who were having to cover for them, they were very happy with it because they always felt under pressure to do more hours or to provide cover in people’s homes for it. 25 people did complain first year which was about 25% of those affected; however those issues were all investigated and Synergy stuck by its beliefs and they didn’t get a pay increase or they got a half the pay increase for it.

    So what did we do in 2011 to try and change things round, well the first thing we did, we have Cascade as our HR & Payroll system and what we found was it was an ideal opportunity to introduce the Bradford Factor as it copes with it very well, managers can also run their own reports, we have self-service to managers as do the HR team. So managers can actually run a Bradford Factor report of all their teams at a touch of a button any time they wish, and this is an example of a Bradford Factor report, the data is real but the names have been changed to protect their confidentiality of it. As you can see there are some interesting scores at the top there and that is real so that is what we were managing for it.

    So can I have just a quick show of hands as to who has come across the Bradford Factor before? So that’s probably more than we had because it took me a while to get my head around it but perhaps just to refresh you and to give those that haven’t come across it an idea ill show you some examples of how it works.

    Ok this is the science bit, what it looks at is S x S x D and that’s total spells times total spells times total duration and it gives you a score at the end of it. So for an example, and I needed lots of these, 1 total spell times 1 total spell of one total duration of 5 days, so that’s somebody having one week off in the year gave a score of 5. Same, similar sort of thing 5 total spells times 5 total spells time 5 total duration, which is one day each which is 5 days during the year, gives a score of 125 and then the other extreme someone could have 5 days off but only 1 spell of it and the score would be 25. So the Bradford Factor looks at companies and says actually yours short term absence is far more costly than long term absence because you can plan for your long term absence but you can’t plan for short term.

    Ok, that was the easy bit, what do you do if you have someone who has a multitude of absences and this is where it still works. So if you have John, he has 3 days with a cold, 1 day sick, 2 days ear infection, 2 days of sickness and 1 day with a cold, first off – we can see the managers weren’t interpreting what sickness meant when they met with him after he returned to work, what we can see he had one, two, three, four, five times spells, 5 x 5, and he had 9 days which gives a score of 225 so it works on whatever variation you do with it. At the time of doing this the employee handbook was given with new terms and conditions in it, so we were able to include the link to pay within that.

    We also had to set our trigger points and you’ll see that on a later slide but what we looked in our research for our company alone is that the most common form of absence was four periods of one day throughout the year which gives a point of 64 so we made that our minimum trigger point, so staff with a trigger point of over 64 to 199 would only get half the pay increase and those with 200 or more would get no pay increase for it. We then had to train our managers and our supervisors, now given that we have managers that are office managers, that are care and support and those that work at the DLO, that’s quite a wide range so we introduced the Keisen brain friendly model which means you don’t use PowerPoint at all, you use things like the drawing, you work with them to get them to understand. And at that we also introduced a return to work form and the return to work interview.

    The training received 100% satisfaction which is saying something when you’ve got trade guys who don’t like coming into training to sit there for a day.

    All staff now have a return to work interview whatever their period of absence and that is conducted by their manager and all staff know that we do not doubt they are sick but their attendance has impact on our bottom line and on their colleagues that they work with.

    We rolled out the self-reporting which I showed you earlier to the managers so that they can report at the touch of a button and they all report monthly on their figures to their directors for it. We also have to meet with our customers every year and they set our targets on turnover and absence and they set us a target for 2011 of 7 days per person so that’s a reduction of 5.6 days.

    We report quarterly to the exec team and then into the board on all our absence criteria and what we’re doing to improve it and how it’s working and any hotspots to look at. We also ensure the line manager holds formal and informal reviews for those people that have hit the trigger points and we wrote to employees that were affected by the process and clearly explained to them what the impact of their absences and what they need to do or what we need to do to improve it.

    Now that might seem quite harsh but we also recognise that we have to protect our employee’s as well. So we ensure that any individual that has cancer is able to receive full pay up to one year. They still won’t get a pay increase and their Bradford Factor score is still calculated but we protect their pay because we recognise that they don’t need any more stress for that and we have had three people that have benefited from that and all have successfully returned to work.

    Those with an absence score of over 20 days or have very frequent short term absence for no real reason we refer to occupational health and we work with our occupational health doctor really well and he has to complete a return of duty questionnaire. But also by managing the short term absence allowed us to concentrate on those individuals who had disability needs or long term health issues and we’ve worked very successfully with their partners, psychiatrists and the medical profession to return them to work with reasonable adjustment and that is an ongoing process, they’ve got conditions that they need to work with on that, but during 2010 we had three individuals who had long term absence but by working along and understanding their condition they returned to jobs with very minimal adjustment and had no absence during 2011 and it’s a constant monitoring exercise for that.

    We do have individuals that we found that were waiting for surgery or after surgery and if they work in jobs that are out in the field we will bring them into the office pre and post-surgery so they are actually working and contributing for it. And employees know and it’s really important to stress this, that we do not doubt that they are sick and we keep saying that to them but it’s about improving attendance and productivity for the company.

    So you may say why don’t we give out vouchers to those that attend all the time, which some companies do, we had done that in one part of our business but what we found is we got presenteeism, so staff that so wanted there voucher for 100% attendance would turn up to work when they shouldn’t and you couldn’t send them home because they were that close to their quarterly period for their voucher. So what we are saying is people do have the right to some absence, they just have to be managed for it.

    So how did employees react? Well I’d said originally they weren’t ecstatically happy but when we’d reduced the sickness from 6 and 6 to 3 and 3 that had had little impact because they had additional benefits for it but when we linked it to pay there were some issues in it, however, most even those that had long term absence understood the need to manage their attendance and understood why they might not get a pay increase.

    The issue was around those that like to wave that medical certificate that says my doctor says I’m sick so I don’t have to attend work and those are the ones we were very more challenging with. We started to challenge the GP’s, that didn’t go very well so our health doctor now does that for us, we had some very unhappy GP’s on the phone at one point.

    What else did we do? We made the manager responsible, we will support the line manager if they need it, we will help them if someone needs referring to occupational health and we will help them decided if they should be or not. We will advise them on how to conduct a formal or informal review but they do it and also their responsible to their director and their directorate, that’s who their reports go to. So by making them responsible they have become very keen on this because it affects their appraisal at the end of the year and how they manage their staff, if they have got high unmanaged absence in their appraisal review.

    So what did this show? Well we made some significant savings and I was actually quite surprised at some of this. This just summarises what I’ve just talked about but I’m not going to go through that again for it, but it shows it’s in your packs if you want to have a look at it.

    So throughout the year absence had dropped by mid-year we were looking at 6 days per person and by when I came to do the review in January for the salaries going forward to April next year we found it had dropped to 5.13 per person which gave us a huge saving, it turned out to be over £291,000. So we cut our payroll cost from 5% down to 1.99% saving just over 3% on payroll costs which was huge and it was about a 60% reduction and again this is basic because it’s not including the cost of the car allowances or temporary cover or overtime.

    And actually one of the directors who was really ‘anti’ what we did, when she saw this did come and apologise and said that it turned out to be the right thing to do at the time for it.

    So what did we do? We wanted 2011 to coincide with our employee survey year, we do an employee survey every 3 years, we’d obviously had quite a poor survey at the time we were going through most of our change so it was important to do one for this. We always commission an outside company to do it for us and they work with our staff consultancy committee and with our managers to design the questions. Some of them are very pleased to find that we had an engagement score of 86% which was 10% above the benchmark. So what we found is by doing this has had no negative impact at all in fact you could argue it had a very positive impact because staff knew where they were with it and those that were attending work also felt protected and that they were been listened to about colleagues that had been absent a lot. And we had some very good scores in that, it was a very good survey for it.

    So what did we learn? Well whilst we learned that while staff were unhappy and vocal, most thought it was a good idea. The Bradford Factor – everyone could understand, and in fact we had some guys in the DLO who may often take a duvet day saying they’d stuck their Bradford Factor on the fridge, so if they felt like taking a duvet day they would come to work rather than take a duvet day.

    We have to keep saying that we don’t doubt your reasons for absence, we do think you’re ill but we need to manage it, because we got people saying ‘well I was ill, you can’t do this’ and we kept saying we don’t doubt you’re ill, we need to manage it. By working with the business we can successfully return people with long term health issues to work.

    It wasn’t easy I’ve got managers saying to me ‘I don’t want this person back they’ve got Asperger, they’ve got this, and you’ve got to get rid of them’ and I was saying ‘Were a big company, we need to be able to bring them back, this wouldn’t sit with a tribunal’ and it has worked really, really well. Not to let it go too far, we don’t want presenteeism we do need to let people be sick even if it effects their Bradford Factor and we need to work with them to ensure that happens because it is not about presenteeism for it. The Bradford Factor does penalise frequent short term absence rather than long term. Oc.health can work very successfully to get people to come back to work as well because some people don’t want to attend but they do have to. The engagement school was very good so it was working, it’s not a panacea, the Bradford Factor can be abused, you can have that bright spark that says ‘well if I’m only going to get a Bradford Factor score of 5 then I might as well take a whole week off rather than one day’. It’s not a perfect science but it works for us!

    So what are we going to be doing next? What we’re doing next is, currently we only have costs against average salaries and Cascade allows us to actually cost against actual salaries including benefits, so for this year that’s what we’re doing, which will give us a much more accurate outcome. We need to work more with our finance colleges because we want to understand what temporary costs are with agencies and what overtime costs so we can roll it out to Excel and put those costs in as well, so by the end of the year we’ll have a more accurate costing for it.
    We’re also rolling out Self-Service in full, so the line manager will be able to be able to enter the first day of absence for his people or her people and the last day. You’ll have triggers in it so if they forget it will prompt the medical certificate, it will send a return to work interview form to the manager and the employee and that will be electronically authorised and upped into the system and ultimately, probably a year ahead the individual themselves will be able to enter their sickness, so we are rolling it out gradually. So we are continuing to move on and to improve things.
    So I’d like to thank you for listening to my story and if I could ask if the two people I asked at the beginning, have I answered your question.

    ‘I always felt guilty in a way checking on them and not for the office purposes but just for the business and you’ve reiterated now on that, I’ll accept their ill but I need to emphasise the business needs’ and the other person I asked ‘Yes to a certain extent but we used to use the Bradford Factor and it didn’t really work and I think it was in terms of what you said that people would take longer off, so they would take you know like 5 days as against short periods’. I think people with a low Bradford Factor might do that, those where its creeping in where it links to pay wont, so we need to do more work on that area ourselves on it!

    Ok thank you very much, any questions? Ok well thank you very much I’ll be here for a little while if anyone wants to talk to me directly, thank you!


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