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As an HR consultant one of the hot topics that my clients speak to me about time and time again is sickness absence. This is a big problem across the UK and creates a significant cost to businesses of all sizes. However the type of business that is most affected is one that is in the SME market. Small and medium sized businesses can ill afford the costs that sickness absence brings as they often have little flexibility. According to the latest CIPD research after the public sector and not for profit organisations, the manufacturing and production industry have the highest average of sick days at 6.2 days per year. The main cause of short term sickness absence is minor illness whilst long term absence is linked to heart problems, stroke and cancer. In this blog I discuss three ways to address sickness absence problems.
The first way to address sickness absence is to have a strict reporting procedure in place. There should be a clause in an employee’s contract that states that they should phone in to report sickness to their line manager within one hour of starting work followed by regular communication if the absence is to continue. It should be the employee themselves and not a relative, partner or anyone else. They should phone in and not text or email. The idea behind this is that if an employee knows they will have to speak to their line manager and may not be ill at all, but just seeking a day off, they may think twice about doing so.
The second way is to implement documented return to work interviews. These should be completed on the day the employee comes back to work. This may address the problem of sickness absence because the employee can be scrutinised by their line manager about the situation. If they have been swinging the lead they may appear edgy – body language is key. The interview should include welcoming the employee back, discussing the sickness absence in full – is the employee better now, is there any further treatment, etc. The line manager should then ensure the employee knows their first responsibility is to their employer now they are back at work and should be filled into what has happened with their work since they have been off,
The third way to address sickness absence is to monitor the situation – recording who has been off and why on a spreadsheet or in a human resource information system for a report to be produced. It can be very helpful and illuminating to see the information in black and white. Problematic members of staff can be highlighted and dealt with using a robust sickness absence procedure. Documented meetings will track how an organisation has dealt with an issue. This is really important if ultimately dismissal occurs with a potential employment tribunal claim lurking in the background. An employer needs to show they have been fair and reasonable.
In 2015 1.5 small and micro sized businesses must face implementing pension auto enrolment. It seems according to the media that many employers are not ready for pension auto enrolment. A Pension Regulator report shows that half of micro businesses do not even know when they are meant to be compliant. This is despite the wealth of information out in the public domain. Many small businesses have by now been informed by letter when their staging date will be and are given ample notice to comply.
A recent article in the Independent newspaper http://www.independent.co.uk/news/business/sme/small-talk-many-employers-face-penalties-over-pensions-autoenrolment-9778756.html states that employers are sleepwalking their way past a legally binding deadline. This year 12,000 small businesses with 62-89 employees should have complied by 1 July 2014 but asked for a three month postponement which they are legally entitled to do. However, apparently many have still not complied and will face a fine by the Pension Regulator.
Research done by NOW pensions highlights that many small businesses are approaching advisers very close to their staging date or even after the staging date has passed, which is far too late. Furthermore a survey done by Sage payroll software of IFAs showed that many of their clients don’t see auto enrolment as their top priority and only 1 in 5 businesses are aware of the process. This is despite an extensive government advertising “I am in” campaign using top celebrities such as Theo Paphitis to spread the word.
Auto Enrolment is the Government’s flagship legislation to solve the country’s £28 billion pension black hole. It began in October 2012 initially with very large companies some of whom have struggled despite the resources available to help them comply such as Finance Directors and HR departments. No matter what employers and small businesses think about the process they must put a workplace pension in place or be at risk of huge fines. Unfortunately many do not have the know how, resources or time therefore early intervention is key to falling foul of the Pension Regulator.
The Pension Regulator is policing the system. Once a pension scheme is in place and auto enrolment has been undertaken an employer must confirm via a compliance tick list and submit that to the Pension Regulator within five months. If companies fail to implement the auto enrolment process they will be tracked down and dealt with very harshly. Small businesses with the many costs they face, can ill afford to shell out unnecessarily.
The Pension Regulator recommends starting the process 12 months before the staging date and this is very good advice. There is a lot of work to do – finding a provider whether that is for a private pension or NEST the government run scheme, setting up administrative processes and consulting with employees. My experience is that many small businesses and employers are burying their heads in the sand, but it is the elephant in the room and will not go away.