Cost Cutting – Is Redundancy The Only Option?

At some point in your business you may decide you need to cut your business overheads.  There may be many reasons for this: loss of a large customer; a slowdown in sales; new competition; or – at present – a global pandemic!

A quick way to cut your losses may be to reduce your employment costs.  Some job cuts might save salaries, benefits, employment costs like tax and National Insurance.  You could save on training costs, sick pay, holiday pay.  This can seem attractive, but is redundancy the only option?

Redundancy is never a cost-effective solution

Making staff redundant is never a short-term solution to your financial difficulties.  It is expensive in so many ways.  The redundancy payments themselves can be costly, particularly if your employment contracts offer an enhanced redundancy package. On top of that, you also have to pay notice periods, or pay in lieu of notice.

There are other costs, which may not be immediately obvious.  Things like the management time needed to plan, prepare and carry out a redundancy programme.  Or the unsettling effect on the remaining staff, which will surely lead to a drop in productivity.

This just skims the surface of the costs involved.  I could write a whole different article on redundancy costs alone.

Redundancy is a real negative for your Business

Redundancy  is expensive and hugely time-consuming. It means letting go of employees in whom you have invested  and who might be hard to replace in future.  It usually has a negative impact on those staff that remain.  It is very bad publicity.  It can lead to legal challenges unless handled carefully.

If your business has an uplift and you need more people, you may not be able to recruit again straight away. Even if you can, the people who were redundant may no longer be available or willing to return.  If you can recruit, you will have the cost and the need to train up new staff.

So is redundancy the only option?

It is not, of course, the only answer.  It may seem to be the simplest and cheapest way to cut costs. But you might find it very instructive to look at alternatives before you commit to redundancies.

  • Firstly, a thorough understanding of your Business financials. Is redundancy really the only option, or are there other reductions in cost which could be made instead to mitigate the need for redundancy?
  • Can any of the work be adapted, or dropped (temporarily or permanently?
  • Can you recycle, reuse or repair furnishings, equipment, tools instead of renewing?
  • You might look at reductions in things like non-essential travel; company vehicles; subsidised cafeteria, etc.
  • Are there any grants or incentives available from the Government or elsewhere which might help you get through a sticky financial period?
  • Your employees might have some ideas, so communicate and consult with them. They have a big interest in helping you to save their jobs.
  • Before you make employees redundant, look at limiting the number of contractors and agency staff you are using. Are they doing work which could be carried out by an employee instead?
  • The Government’s furlough scheme during the global pandemic is coming to an end, but could you offer something similar to your employees? This keeps them on your payroll, but reduces your costs.
  • Other alternatives might be to offer sabbaticals; to offer reduced hours or reduced working days; offer a salary reduction; look at secondment or redeployment opportunities

This list is not exhaustive and there may be other things you can do to avoid some or all of your redundancies.

If you think this article is useful and you would like to talk more about dealing with redundancy, – please join our mailing list, or contact us for further guidance.

A Strategy To Increase Financial Returns For Your Business

It is the start of a new year and a new decade.  This year can be the best ever for your business.  You want to improve your financial returns and see the benefits of all your hard work.

Your employees are your best asset – you often say as much.   But do you really mean it?  And, if you do, do you know how to get the best from them?

This is where a strategic Human Resources (HR) plan comes in.

Why do I need a strategic HR plan?

You may know what your Human Resources team is employed for.  They are there to recruit people, to write policy which will protect your business.  And then to implement that policy and make sure it is followed.  When things go wrong, HR is there to help you with difficult things like redundancy or disciplinary action. Even the really bad stuff- like dismissing people.  HR will then support you if the worst happens and legal action is taken against you in the Employment Tribunal.

But what about strategic advice?  You have strategic financial plans and marketing advice.  But there is no need for an HR presence at the top table – HR is an operational, back-room function.  It is a necessary drain on the business.  It doesn’t produce any revenue, or improve your profits.  Or does it?

What difference does HR strategy make?

Human Resource planning should be at the heart of every business decision you make.  If your employees truly are to be your best asset, then doesn’t it make sense to invest in them? A strategic HR plan will help you to maximise the investment in your employees – which is very likely to be your largest investment.

A strategic HR plan will show you how to  improve your financial returns on that investment.

What are the financial returns from a strategic HR plan?

In terms of real financial returns, there are six key areas where a strategic HR plan can make an enormous difference for your business.

  • Return on Sales

Each sale is worth more if your production costs are kept down.  This includes recruiting the right people in the shortest possible timescale.  It means retaining them in the business once they have been recruited.  Strategic HR can help you manage the performance of the individual and look after their wellbeing.  All of those things make them work efficiently and effectively and reduces production costs.

  • Return on Assets

If you get the right people in place, train them properly and look after them, then your assets will be better maintained.  The use of the assets will be optimised.

  • Revenue growth

This really just means more sales, which can be achieved by better customer service and increased numbers of customers.  Again, your employees are key to this and a proper strategic HR plan can have a huge impact on this aspect of the business.

  • Profitability

Profitability is increased because of the revenue growth, as already discussed.  Again, if you look after your employees, then your expenses will be reduced (less absence, greater retention, higher work rate).  Because your revenues are up and your expenses are down, then your profitability is increased.

  • Market capitalisation

If your company is traded on the stock market, then your value per share is important.   Your employees are key to this equation, as they affect all the other financial impacts, as discussed above.  If your employees feel valued and loyal, then there is likely to be a positive effect on market capitalisation.

  • Revenue per employee

Finally, if your employees are happy and feel valued and engaged in their work, then they will be more effective and efficient.  This, coupled with reduced absence and lower turnover, can impact your revenue per employee.  This is another critical area for the business where a positive HR strategy can really pay dividends.

HR – a critical strategic business partner

This all demonstrates the fact that strategic HR has a positive impact on all of your financial measures.When your staff are happier, you spend less on absence cover, recruitment, performance improvements, and so your financial returns improve on sales and on assets.

If customer service has improved and the speed and amount of work has increased, then the obvious outcome is revenue growth and higher revenue per employee.   And because your revenues have improved and your expenses are reduced, this means that your profitability is higher.

If you think this article is useful and you would like any strategic HR support or information  on dealing with this  – or any other people-related issue in your business – contact us for a no-obligation chat.

Jill Aburrow runs an HR strategic consultancy business – JMA HR .  She provides strategic HR advice and support to businesses who want to improve loyalty, growth and profit. Why not join the JMA HR mailing list?  Jill has been a professional strategic HR advisor for over two decades. She is a Fellow of the Chartered Institute of Personnel and Development (FCIPD) and has a Post Graduate Certificate in Employment Law.

How To Help Your Employees Have A Happy New Year

Firstly, I would like to wish all my readers a Happy New Year.  I hope you have all had a good break and have come back to work refreshed.  I hope you have renewed interest and energy and exciting plans for a new decade.

Of course, we all feel renewed and refreshed after a lovely Christmas break with friends and family, don’t we?

Well, actually, the answer is different for all of us.  We give each other a cheery greeting and wishes for a happy twelve months ahead.  When we say “Happy New Year”, it is much like asking how someone is.  We mean it genuinely and  – if we think at all about it – we hope that they are well and happy.  But we rarely take the time to properly consider whether someone is genuinely looking forward to another year.  In reality, they might be feeling lost.  Or they might even be dreading the future.

Reasons why some people dread a new year

We make assumptions that everyone has enjoyed their Christmas break.  But the truth can be quite different.

When couples and families are forced into spending time together for more than a few hours, they can discover unpleasant truths.  Sadly, many people seek advice on divorce in January.  They have discovered over the Christmas period that they just cannot live together any longer.  Even if divorce is a step too far, some people find that their family relationships have changed. Or they may have discovered family problems which were previously unknown.

A happy and successful Christmas can bring other problems.  January can bring enormous credit card bills, or overdraft payments. Even when people earn a good salary, it does not follow that they are good at managing their financial situation.

Or there are those who have over-indulged themselves at Christmas.  We often eat rich food, in much greater quantities than our bodies can process.  Or we might drink more alcohol than usual, for longer periods, or at different times of the day.  This can lead to a need to give up things we normally enjoy, like chocolate or alcohol.  Or we decide to go on a weight-loss plan.  Then, when these new regimes prove hard to stick with, we beat ourselves up for not resisting.

New Year – new opportunities

Of course, some may have used the break to think about their life direction.  It is often a time when people come back to work with a plan to change roles, or even move to a different employer.  Some will decide that they want to leave the safety of employment and set up in business for themselves.

January is also traditionally a time when people start to plan their holidays for the year.  They will start dreaming about a sun-drenched beach.  Or they might prefer cultural breaks, or learning a new skill.  We are keen to save our spare cash to pay for our holidays.  We might spend our lunchtimes and breaks looking at exotic destinations and comparing travel costs.

Things beyond our control

In the northern hemisphere, the weather in January can make life difficult.  As I write this article, we are slowly recovering from storm Brendan in UK.  There has been torrential rain across the country, coupled with very strong winds and high tides.   We have to contend with flooding, trees down, huge waves breaking over sea-defence barriers.  This is fairly standard for this time of year, although maybe more extreme than previously.  But the big concern is for the future – what will the next decade bring in terms of climate change and altered weather patterns?

And, of course, colder and wetter weather brings illness.   This is the time of year when we all have colds, flu, upset stomachs (from all that over-indulgence, maybe?).  Many people may have had a rotten Christmas break because they felt too ill to enjoy it. Or their partner or children were ill.  Or maybe the whole family went down with something nasty.

Mental health concerns

Christmas is a time when our mental health can take a real knock.  The perceived joy and fun going on at Christmas can be in stark contrast to our own situation.  If we are lonely, then this can become unbearable at Christmas.  And it is not just those who live alone who feel lonely.  Returning to work can be a welcome relief and return to normality.  Or it can just make us realise how bad things have got.

Many of us put our problems to one side and decide to enjoy Christmas.  The holiday break can be a welcome relief from our concerns.  But now that the holiday is over, we have to face up to our problems again.

Why is this the employer’s problem?

All of these things, good and bad alike, can make it really hard for us to get motivated again.  We have had a break from normality and finding our pace again can be difficult.

If we have had a great time, then we don’t want to face the return to our usual situation.   It can be really hard to throw ourselves back into work mode.  If the holiday has been less good, then it can be really difficult to face up to those problems and difficulties which we have been avoiding.

Either way, our productivity can be low and our employer may not get the best from us during January.   And this is probably a time of year when they were expecting great strides and renewed energy from us.

So how can an employer turn this around?

There are so many things which a good employer can put into place to enable a successful January and beyond.

There is help available to tackle many of these issues.  If an employee is facing personal problems, an employer can provide a counselling service, or legal advice.  At the very least, you can point the employee in the right direction to get appropriate help and support.

You may want to consider flexible working, or different working patterns, or moving people into different roles.  You should be holding discussions, consultation, regular conversations with your employees.  That way you can find out what help they need, what direction they want to move in, what their plans are.

If people are having financial problems, there are many debt counselling schemes.  There are interventions to help people reduce financial outgoings, to save, to plan for their future.

There are wellbeing services you can consider, from massages, to meditation, to practical help, to fitness, weight loss, dietary control.   At the very least, you should be making sure they take regular breaks and go outside to see some greenery.

You might want to consider training and development plans to help people move in their preferred direction.

Steps towards a Happy New Year

I have deliberately talked about the difficulties and problems which can come as a result of the Christmas and New Year break.  Of course, the vast majority of your employees will have had a great break and will be feeling refreshed and ready for the next challenge.

But it would be great if you can think about ways to help your employees really have a Happy New Year.  The best way to do that is to talk to them and find out about their concerns, their plans, their dreams.  Then you are in the best position to help them.  If you help them, then they will help you to ensure that your business is successful and brings you a very Happy New Year!

If you think this article is useful and you would like any strategic HR support or information  on dealing with this  – or any other people-related issue in your business – contact us for a no-obligation chat.

Jill Aburrow runs an HR strategic consultancy business – JMA HR .  She provides strategic HR advice and support to businesses who want to improve loyalty, growth and profit. Why not join the JMA HR mailing list?  Jill has been a professional strategic HR advisor for over two decades. She is a Fellow of the Chartered Institute of Personnel and Development (FCIPD) and has a Post Graduate Certificate in Employment Law.

 

How Employee Financial Well-being Ignites Productivity

In August last year, I wrote an article about how you can support the financial well-being of your employees.  Now I want to concentrate on why this matters to employers.

This really fits as part of my current focus on productivity in the workforce.  A survey by Metlife UK  earlier this year  looked at employee financial well-being. 64% of senior managers said that addressing financial well-being will help boost productivity and engagement.

But businesses say they do not understand enough about the link between financial well-being, mental health and productivity.  They want more clarity on how to tackle this issue.

What is financial well-being and why does it affect people who are working?

In simple terms, employee financial well-being can be slotted into various categories.  Firstly we need to have an adequate salary to support ourselves and our families.  We need to be able to save for the future, in terms of things like mortgages or pension provision.  It is good to have a cushion to deal with emergencies.  And we want to be able to pay off existing debt.  These are key aspects of our financial well-being.   Understanding our finances and feeling in control is important.  And we want to feel that we are paid fairly for what we do and in comparison to others. It is linked to a belief about whether we are valued properly.

This is not just about pay (or low pay). It is not about financial mismanagement. And it is definitely not limited to a need for debt counselling.  Just because people are in employment, it does not mean they don’t have money worries.  And the worry is not confined to those on low pay.  Financial well-being can be a concern for all income groups, even those with a higher income or in a senior role. In fact, it can have a greater impact when we earn more.  The more we earn, the higher our financial commitments.

How does employee financial well-being impact the workplace?

The CIPD, in association with Close Brothers, carried out a study on employee financial well-being.  This shows that a quarter of employees say that financial concerns impact their performance at work.  The issues include loss of sleep. And time spent at work thinking about or dealing with financial problems.  It affects our productivity, our ability to do the job.  There can be an impact on ourconcentration and decision-making.   Additionally, nearly a third of people in the UK only have savings to cover up to three months if we lost our jobs.

There is a great deal of coverage in the press and social media about mental health and well-being in the workplace.  But many employers fail to grasp that employee financial well-being contributes hugely to employee mental health.  The CIPD has found that only a third of employers actively promote employee financial well-being.   This is largely because employers do not know where to start or how to work out what is needed .

Practical steps for employers

Larger employers  are more likely to provide benefits packages.  These may comprise a number of different benefits for employees.  Smaller businesses will offer a pension.  But they may not be in a position to offer a wider range of benefits.

Employers are well-advised to inform and educate employees about the options and what they mean.  This is the case however simple or limited the benefit package may be. Have you thought about consulting with employees to find out what is effective (or not)?  Are you confident they are making the right choices? This is even more important if you offer a variety of benefits.  Especially if people can choose which benefits to take.

There are many low cost or cost-free advice services which employers can provide.  Additionally, there may well be some local companies who would be glad to come into your workplace to advise and help your employees.  This may be at no cost to you, as the employer.

As employers, we have a duty of care towards our employees.  So we need to be aware of people who are working longer hours, not taking all their holidays.  Or those who are having unexplained sickness or are behaving uncharacteristically.  These could all be signs of problems.  And those problems could have financial difficulty as the root cause.  We have no right (or desire) to pry into people’s personal finances, of course.  But advice on where to seek help may be all that is needed.

What are the benefits for the employer?

How can you  help your employees to understand their finances and to become more able to control them?  If you can do this, you will benefit from a happier and more engaged workforce.  The immediate benefit is higher productivity. If people are getting a good night’s sleep and are able to concentrate at work, then they will be more effective, quicker and more accurate at work.

As an employer, you will benefit from the fact that people will have more trust in you. They know that you pay fairly, that you care about their welfare, that you support them through any difficulties.  This translates into better customer service, improved employer reputation, increased loyalty.  All of this improves business growth.  Why would any employer not want to see those benefits?

If you think this article is useful and you would like any strategic HR support or information  on dealing with this  – or any other people-related issue in your business – contact us for a no-obligation chat.

Jill Aburrow runs an HR strategic consultancy business – JMA HR .  She provides strategic HR advice and support to businesses who want to improve loyalty, growth and profit. Why not join the JMA HR mailing list?  Jill has been a professional strategic HR advisor for over two decades. She is a Fellow of the Chartered Institute of Personnel and Development (FCIPD) and has a Post Graduate Certificate in Employment Law.

Personal Financial Wellbeing – How Can You Support It?

Do you know about the personal financial wellbeing of your employees?

Earlier this year, I wrote a guest blog post for Nikki Ramskill, the Female Money Doctor.  Nikki is a medical doctor and she sees first-hand the effect that financial worry has on people’s health.  In my article I said that “A caring employer who wants to benefit from a healthy, happy and productive workforce should be thinking about how to provide financial advice.”

I am returning to this subject as it is dear to my heart and there has recently been a study by the Institute for Employment Studies (IES) into employee financial wellbeing guidance in organisations.

This study looks into what employers can do to support the personal financial wellbeing of their employees and why they might want to.

Horror Stories

There have been recent headlines  about people who are holding down jobs but are homeless.  And there have been other stories about people who are in full time work, but below the poverty line.

Of course, these are the extremes, but many people are in debt and are unable to save.  They are struggling to pay mortgages or rent and to feed and clothe their families.  Other studies over the years have come up with statistics such as: 40 per cent of adults say they are not in control of their finances; only 28 per cent of people have a savings buffer equal to three months’ income and a third of employees state financial worries are their biggest concern.

All of this will inevitably have a negative impact on the health of your employees.  It will give them higher stress and anxiety levels and affect their ability to sleep, their concentration levels and their absence due to sickness.  If they are suffering, then your business is also suffering.  They will not be performing well.  Their decision making will be affected.  They will have a reduced ability to concentrate.

You may be paying well and providing other benefits on top, but are you aware of the financial health of your employees?  If not, then you may be missing out on a good way to improve productivity, employee engagement and your employer reputation.  There are many low cost or even cost-free ways to help your employees to enhance their personal financial wellbeing.  And if you help them, then you are helping yourself too.

How can I help?

You could start by setting up an employee financial wellbeing strategy.  This does not have to be difficult.  It would be a good start to look at all the help you already provide and put it all into an easily accessible package.  You probably provide help already, but not in a clear format.

You can also signpost employees to help which is available for them – usually at no cost.  There are all kinds of support mechanisms, debt counselling, financial guidance, pension advice, savings schemes, etc which is available if employees know where to look.

Sometimes all that is needed is some financial education.  People are frightened of managing their finances because they feel they don’t have the skills or knowledge.

But I don’t want to invade their privacy

In these days of enhanced data protection, identity theft, invasion of privacy, employers are nervous of enquiring into the personal finances of their employees. But you don’t need to know specific details, unless the employee wants to share it with you.  Additionally, you might assume that your employees have adequate knowledge to make decisions about their finances – especially if you already provide advice on things like pensions and flexible benefits. But the IES study found that that many employees would positively welcome some engagement from their employer to help them to resolve any difficulties they may be facing.

If you think this article is useful and you would like more advice on dealing with this  -or any other people-related issue in your business – please join our mailing list, or contact us for further guidance.

Keeping to the Bare Minimum Wage

I spoke to an employer last week who was quick to tell me that they don’t pay more than the minimum wage.  If someone goes off sick then they only pay Statutory Sick Pay.  He was quick to justify this… “Like any small employer, every penny counts and we cannot afford to pay out anything more than the absolute minimum we can get away with”.  I came away from the conversation feeling very sorry for his employees – and with concerns about the sustainability and growth of his business.

The question is not whether an employer can afford to pay more than the absolute minimum, but whether they can afford not to.

 Keeping Low

Of course, there are obvious benefits of keeping the wage bill as low as possible.  It is the largest outgoing for most employers.  Rightly, they will do everything they can to control it and prevent it from spiralling uncontrollably.

You want to feel you have not wasted that money and have preserved it to spend on other things which will grow your business.

It is also true that pay is not a “motivator”.  You can pay a high salary without seeing reward in terms of performance by the employee on the receiving end.  But money (or perceived lack of it) is a de-motivator.  If an employee feels they are not getting a fair deal, they will have no incentive to go the extra mile for your business.

“Give and Ye Shall Receive”

It is a fact in life that you get back what you give out – if you project love and generosity, then that is what will come back to you.  If you “give” to your employees (in terms of money, and in terms of valuing their contribution in other ways) then they will repay you with loyalty, with support to you and your customers, with performance beyond your expectations.

If you stick to paying out the very minimum, then there is no incentive for your employees to work hard or to put in more than basic performance.  There is a saying I have heard many times in the work place:  “if you pay peanuts, you get monkeys”.

The danger  – if they are a high performer – is that they will “mark time” with you until a better opportunity comes along.  Even worse, if you have a poor performer, is the danger that they may stay with you as they cannot get another role. In that case, they will never be really happy at work and they will only ever perform at the level  at which you value them (ie. the minimum). They will become more and more disillusioned and their performance (already low) is likely to spiral downwards over time as they tick away the days until they can take their pension.

Spreading the Germs

If you only pay the minimum amount possible when someone is off sick, then they will hurry to come into work as soon as they can.  This sounds like a good thing and is the reason why some employers only pay Statutory Sick Pay.  But what if the person has something contagious (even a stinking cold) and comes into work because they need the money?  They pass their germs on to others they work with and, before you know it, the whole team is sick.

And what is the quality of the work someone produces when they are feeling below par?  There is a strong likelihood that their work will be slow and may be full of mistakes.  In the long run, this could cost more than paying them whilst they are off sick and not contributing at all.

Spreading the Love

Again, we come back to the value you put on your employees.  There is a reason why the wage bill is generally the highest bill you face each month.  If you get it right, it is because the people are the highest performing asset you have and will make your business grow and prosper.

If you think this article is useful and you would like more advice on dealing with this  -or any other people-related issue in your business – please join our mailing list, or contact us for further guidance.

 

Managing Presenteeism – How to Make People Stop Working

People who have worked with me for any length of time know that I have a bee in my bonnet about discouraging long working  hours and encouraging the use of breaks.  I think my colleagues all got sick of me nagging them to leave on time or to go out and get some fresh air at lunchtime.

But I am vindicated by recent research from the CIPD.    Their report shows 86 per cent of respondents to their survey have seen a rise in “presenteeism” over the past 12 months. Over two-thirds reported “leaveism” (people working when they should be on annual leave).

What is presenteeism?

According to Google, presenteeism  is “the practice of being present at one’s place of work for more hours than required, especially as a manifestation of insecurity about one’s job ”.  Most commentators link this to being at work even though sick, and some refer to “workplace presence”.  I believe that it also covers people who work through their breaks, who work long hours, or who work during annual leave periods or public holidays (“leaveism”).

Why do people work when they are sick, or tired?

You may say that you do not ask or expect people to work long hours or come into work when they are sick.  If they choose to do that, then that is their own decision.

Indeed, there may be little pressure from managers for people to exhibit presenteeism.  Many people have a strong sense of loyalty to their co-workers and do not want to cause others to have more work to do because they are sick.  They “don’t feel too bad” so think they can do a day’s work.  Others may feel a loyalty to the organisation they work for and presenteeism is a misguided attempt to “be professional” or to support the organisation or colleagues.

Of course, sometimes managers do put stong pressure on people to perform and get the job done.  Whilst I am sure that every manager would say they do not want people to work when they are sick, they may not understand how implied messages can be misread.

In some industries or areas where there is little other employment opportunity, people are frightened that they may lose their job if they take too much time off sick.  Or they have personal money worries or they fear downsizing or job losses. In a smaller team, people might be afraid that the work will pile up while they are off sick. So they come in before they have recovered, or they work at weekends, to avoid the pressure of a heavy workload. This is common where people feel they have high workloads, deadlines and believe they have little support.

Then, of course, there are people who are addicted to work – “workaholics”.

But surely it is good for an employer to get unpaid work from employees?

Just because someone is in the workplace, they may not be adding a valued contribution to the organisation.  If they are ill or tired, then their productivity will be low. This might even be more costly for the employer than their absence would be.   The quality of their performance will reduce and this could lead to poor judgements which cost time and money to fix.  Not to mention the detrimental effect on their colleagues or poor client relations.

Another issue is poor health – for both the individual employee and their colleagues.  If someone continues to work when ill or exhausted, then they are likely to fall victim to other sickness as their immunity levels will reduce.  They will probably pass their bugs on to colleagues and cause a rash of absence as others have to take time out to recover from a stomach upset or cold which has been  passed on to them.    It will take the individual longer to recover from sickness as they have not taken enough rest. This will make them unpopular with their colleagues who become sick or who have to pick up the workload.  This has the potential to damage general staff morale.

How does this affect the Company?

The Business will suffer reduced quality and volume of work.  In itself this may lead to people needing to work longer hours (a vicious circle) to compensate for time off.  This can lead to reduced staff morale, poor employee engagement and yet further loss of productivity.

There is increasing evidence that the amount of time lost to absenteeism is dwarfed when compared to the productivity lost through presenteeism. A study by The Work Foundation has found that the cost of presenteeism in the workplace could account for one-and-a-half times the cost of sick leave. A separate study in the USA showed that the cost of health-related presenteeism could be as much as ten times that of absence.   And that doesn’t include the people who stay at their desk surfing the internet or checking social media, waiting for their boss to leave.

What can an employer do to prevent presenteeism?

The CIPD report  showed that only a quarter of firms surveyed are taking steps to discourage unhealthy working patterns or tackle stress, which is strongly linked to conditions like anxiety and depression.  A previous JMA HR article has touched on mental health and could help you to tackle depression and anxiety in the workplace.

People managers need to be trained to recognise presenteeism and to discourage it.  For example, technology is widely seen as positive in the workplace, but many people find it difficult to “switch off” outside working hours.  I have known many people who deal with emails late into the night, or even take laptops on holiday so they can keep up with work.  This negates the benefit of having an overnight break or a holiday.  You could consider banning the use of email outside of working hours or after a set time.

Many of us work in high-pressure cultures or deal with heavy workloads.  This can push unwell employees into the office.  It can also lead to people using annual leave and weekends to catch up with a backlog of tasks.  This requires some serious management and job design.  You may well be concerned about the additional cost of an extra salary if you take on more staff.  How much more does it cost for your current employees  to manage the tide by working when they are unfit, only to drown when they are engulfed?  You need to make it a priority to give manageable workloads.

Lead by example

Simple steps to take include sending unwell employees home.  You could also  encourage  – or even enforce – breaks and reasonable working hours.  Make it clear that your Company expects sick employees to stay home and recover. How about sending a “hometime” reminder from the CEO to come up on every computer screen at the end of the working day? The workaholics among your staff may resist this, but they will thank you in the long run.  You will definitely see the benefit yourself.

Deadlines are a factor of the modern workplace and there is probably nothing you can do about that.  There may be occasions when you need people to work late or out of hours.  Keep these to a minimum, rather than an expected pattern.  You will find that people are willing to help you to meet an important deadline.  Then thank them!

A really basic step for business owners, CEOs and managers to take is to be the role model of the behaviour you require.  This is simple, but surprisingly rare.  Your staff will look to you for a lead and they will follow your pattern.  If you work long hours, don’t take breaks and work when you are sick or on holiday, then you cannot expect them to behave any differently.  You are the key to changing the culture.  You are not made of steel, either.  All of the disadvantages that presenteeism brings for your workplace also apply to you.

If you think this article is useful and you would like more advice on dealing with this  – or any other people-related issue in your business – please join our mailing list, or contact us for further guidance.

Counting The Pennies

This is a guest-blog written for The Female Money Doctor, Dr Nikki Ramskill.  To read more, please go to http://thefemalemoneydoctor.com/blog

Are you giving your employees financial advice and support?

Your financial responsibility towards the people working for you shouldn’t stop with their pay cheque.

When people are struggling financially, they always hope for more income.  They try to find an extra job.  They volunteer for  some overtime, or hope to get a pay rise.  This is all so that they can pay their bills and feed their families.  Many people have more than one job or work overtime, so they can bring in a bit more money.  As an employer, you are already helping them by paying for their services.  But is there more you can and should be doing?

 

If you think this article is useful and you would like more advice on dealing with this  -or any other people-related issue in your business – please join our mailing list, or contact us for further guidance.