Breaking the Absence Cycle

Hastee Pay CEO James Herbert explores how employers can act to stop 2018’s absence trends repeating year after year.

We all have to call in sick from time to time. The fact is, none of us are superhuman and no matter how well you take care of yourself, illness will inevitably strike at some point. The same can be said for lateness. We all like to think we’re better than that one friend who always manages to be late, even when you tell them to arrive fifteen minutes earlier than you intend to meet them. But the truth is, external factors out of our control can inhibit us from getting to our destination on time. As luck would have it, that destination is often work.

While those of us in senior positions do our best to be model employees, setting good examples for the rest of the workforce when it comes to attendance and punctuality, others aren’t always so eager to play ball. Fresh research from BrightHR has revealed the top UK employee absence and lateness trends of 2018 and employers should be taking notice and considering ways to combat these trends from impacting the business in the future.

New Year, New Flu?

The survey’s findings reveal that January was the most popular month for calling in sick in 2018 which isn’t hugely surprising considering various health problems are triggered or worsened by colder weather, as confirmed by the NHS. Yet January wasn’t actually the coldest month of 2018. Temperatures were lowest in February yet workplace attendance had risen from the figures recorded for January.

It’s interesting, then, that the same survey found 77% of employees had unused holiday left over by the end of 2018. In many businesses, annual leave runs to the end of January each year, which makes it surprising that January is the most popular month for absenteeism.

For most, paid time away from work is hugely important. Taking holiday is not typically the kind of benefit that you need to encourage people to take advantage of. If there are factors prohibiting workers from taking well-earned breaks from work – such as being too busy at work to think about booking leave or not being able to afford to anything meaningful with time off – those workers will inevitably reach the point of burnout, resulting in higher levels of absenteeism.

The study also found almost a third (32%) of workers have missed work because they have not had enough available funds to cover their commute. When was the last time you heard someone explain to their co-workers the reason they missed work was because they were too strapped for cash? Its likely workers would rather call in sick than admit to being in this situation.

January’s Blue

The notoriously frantic build up to Christmas doesn’t provide much opportunity to think about taking some time off for real rest in January. Not everyone gets to enjoy a break from work at Christmas and for those who do, it’s not necessarily a relaxing time.

With busy social calendars, lots to organise and more financial demands compared to any other time of the year, for many the festive period doesn’t provide much of an opportunity to recuperate. By the time January comes around, it’s often too late to book leave before the holiday calendar resets at the end of the month. Simply put, Christmas can increase stress, ravage our finances and then spit us straight into the beginning of another 12-month cycle of work and work-related pressure. In a flash,  it’s a whole month before we can think about booking any time off.

Hastee Pay’s 2019 Struggle is Real Report found that borrowing is higher in January. The study revealed that workers are five times more likely to use high-cost credit in January compared to December. Workers are nearly seven times more likely to use their overdrafts in January compared to December, four times more likely to rely on funds from a credit union and twelve times more likely to use a bank loan.

These findings highlight the lack of available funds workers have access to at the beginning of the year, and this financial stress can have a lasting mental impact – especially in January when many workers face a five to six week wait to receive their pay. This could add to the likelihood of absence in January. But our financial worries could also be impacting attendance throughout the year.

The Struggle is Real report also found that monthly paid workers are twice as likely to use short term credit compared to weekly paid workers. Absences could be tied to the fact that workers aren’t using the leave they’re entitled to because they can’t afford to do anything rewarding, such as a spa day to recharge the batteries if they do book time off.

Prior to the BrightHR report, a 2018 study by Glassdoor found that two in five UK workers (40%) took just half of their annual leave entitlement during one holiday year. If employers could provide more flexible access to earned pay, workers could have better control over their finances, reducing financial stress and reducing absenteeism.

Absent Funds

There can be various factors that drive lateness and absenteeism but Hastee Pay’s 2018 Workplace Wellbeing Study revealed a direct link between financial stress and workplace engagement. As a key driver of absenteeism, workers’ own financial burdens are hitting their employers in the pocket.

According to the report, 78% of workers rely on finance options to source money quickly between pay days, highlighting a widespread reliance on borrowing across the workforce. This isn’t just limited to lower paid workers either. Even those on high salaries rely on high cost credit month after month.

It’s staggering that in 2019 people in the UK have to risk losing their jobs because they can’t afford to get to work, despite the myriad of financial tools available to help people manage personal finances. It’s time for employers to step in and provide a solution. It’s in their own interests. Without a financially fit workforce, business productivity suffers.

The Workplace Wellbeing found almost a fifth (19%) of workers believe that coping with financial stress has diminished their workplace performance while more than a fifth (21%) admit to managing debt repayments during working hours. A quarter struggle to concentrate at work due to financial stress.

When one person isn’t functioning as effectively as they should be, the performance of the whole team can suffer. When business productivity drops, profitability soon follows and costs can even increase if employers choose to spend more on overtime or temps to restore productivity or cover shifts.

While paid leave is supposed to give workers opportunity to recuperate, it won’t make financial burden disappear. Workers who go on annual leave while stressed about their finances aren’t going to return to work worry free. Sustained financial stress combined with workplace pressures could lead to burnout and, inevitably, absence. Implementing flexible access to earned pay could not only reduce absenteeism and lateness, it can also improve workplace productivity.

The Future is Flexible

When it comes to financial wellbeing in the workforce, employers aren’t making any major efforts to help workers manage the burden, which means employers are risking business productivity. The Workplace Wellbeing Report found only 12% of businesses offer face to face financial advice and only 16% offer financial wellbeing programmes, although as you’d expect this is set to increase across the board in 2019.

In an age where businesses are increasingly embracing flexible hours and working arrangements, flexible pay is a sensible solution to promoting financial wellbeing and driving down absenteeism. A simple smartphone app that provides workers with access to a portion of their pay as soon as they’ve earned it can sit comfortably alongside traditional payroll processes. There is no impact to business cashflow or payroll processes and the funds withdrawn by workers are simply deducted from their pay packet at the end of the week or month.

From simply helping workers to avoid further borrowing to eventually finding their way out of debt by taking better control of their finances, flexible pay is a safe, responsible alternative to using high cost credit. Employers implementing flexible pay encourage workers to use the perk to cover unexpected bills and similar expenses that they would otherwise have to use high cost credit to cover. When it comes to recuperation and rejuvenation, they’re also better able to budget to enjoy some deserved time off to help recharge the batteries.

The Workplace Wellbeing Study found that 44% of workers are interested in being handed control of their own pay. Flexible pay could also aid recruitment and increase retention and engagement as 45% of workers are more likely to stay with an employer that can provide flexible payment.

All the evidence suggest that high cost credit is driving financial stress across all the levels of the workforce and is a contributing factor to absence. Flexible pay is the answer to creating a stronger, healthier, happier workforce that puts in the hours, but also one that bears the fruit of its labour in a safe, responsible and flexible way.