Feature insight - absence management
The role of software Traditionally, different departments have managed absence in different ways. This can range from no tracking at all through to tracking time off but treating it incorrectly or even, in some cases, illegally. This is where having an absence management system can add value. Over the years, the functionality and sophistication of payroll and HR software has evolved so that it is now able to accurately record and calculate any payments or deductions in relation to absence, much to the benefit of today’s employers since it helps them to manage the associated costs. This evolution has meant that many businesses now expect to simply enter the details of an absence and assume the system will calculate the effect on pay. This applies to both unplanned absence, such as sickness, and the planned variety such as holidays and maternity/paternity leave. For instance, following the changes to the calculation of holiday pay which have happened over the past couple of years due to legal rulings, employers are looking to their systems to automatically include the relevant payments based on overtime, commission, and so on. Whereas in the past they would sometimes accept that such calculations were too complex for the system to perform, this is no longer the case and their reliance on software has increased. NGA HR highlights that using an absence management system brings a host of benefits which allow the employer to: ● monitor and manage planned absences, reviewing and determining whether any new request is approved based on existing planned absence ● analyse absences at various levels, including individual level and corporately, identifying trigger points, patterns and overall cost to the business ● ensure compliance with absence policy ● provide real-time absence analysis ● drive absence entitlement and any subsequent impact on pay ● identify and define the cost of absenteeism to the business.
“The majority of payroll and HR systems will cater for absence management at some level. As the payroll and HR system should form the backbone of the employee’s employment lifecycle, it is logical to extend the functionality of this system to manage absence,” explains Gilbert. He identifies the key benefits to taking this approach as the use of existing employee data, reduced implementation time and the software being known to the business, which can therefore reduce the impact of introducing absence management to managers and employee. Neil Tonks, lead business analyst at MHR software and outsourcing services provider for HR, talent management, payroll and business intelligence, advises employers to first explore the capabilities of their existing payroll or HR system. “Organisations often don’t keep up with enhancements to their system and miss out on new capabilities which are introduced, so a conversation with the supplier can result in some pleasant surprises,” he explains. “The supplier can also be a really good source of ‘best practice’ advice, as they will almost certainly have helped other customers with similar issues.” In the last five years in particular, the UK has seen unprecedented change in the legislation that governs businesses and their employees. These changes have ultimately been driven to ensure employees get a fair deal at work, for example automatic enrolment, gender pay gap, national living wage and shared parental leave. However, while legislation such as shared parental leave has untold benefits, the way it has been written means this is very tricky for businesses to manage efficiently while ensuring the legislation is followed, according to Richard Norgate, director of HR Solutions at SD Worx, a global HR and payroll services provider. “Modern software has evolved to take the burden off both employees and business and to help guide them through some of the more complex items in an easy way. Again, we see this helping in many
ways by not only boosting employee engagement through empowerment but also increasing accuracy and reducing administration,” he says. Next steps Many good tools exist on the market to help businesses manage absence. However, to gain maximum benefit from these tools it is important to pick a piece of software that will seamlessly integrate with a company’s HR and payroll products. For this reason, many organisations use these tools to form a key element of their HR, pay or workforce management systems. Details about absences are usually entered into a HR and payroll system to ensure pay adjustments are made and that statutory payments such as sick pay are generated where appropriate. Many employers don’t do much more with that information, but they are missing a trick according to Tonks. “This data can be used by various tools to assist with the management of absence, especially if additional details relating to the reason for absence are captured in addition to the basic data such as the absence start and end dates,” he says. “These analysis tools can be reports, but increasingly alerts are generated when absence falls outside parameters set by the employer so that actions are triggered proactively rather than relying on people interpreting figures.” In the case of unplanned absence such as sickness, employers can use the information as a management tool, and to analyse absences to look for root causes. “In terms of management, tools such as Bradford Factor analysis [an HR tool to measure absence] can be useful as they highlight problematic employees, such as those who have frequent short absences,” Tonks says. “This can also help with employee engagement by ensuring people feel they’re treated fairly. An employee who is a good attender for years but then gets hauled over the coals when they have time off with a serious illness will feel aggrieved, especially if colleagues who frequently have odd days off are tolerated.” Analysing the cause of absences can help detect health and safety issues. For example, if individuals who regularly use computers are frequently found to have back problems or musculoskeletal disorders such repetitive strain injury,
...employers are looking to their systems to automatically include the relevant payments...
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Issue 34 | October 2017
| Professional in Payroll, Pensions and Reward |
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