AMERICAS — Mining industry faces a growing cost in

According to Statistics Canada, absenteeism will cost Canadian employers more than $10 billion in 1993. Two out of three employers that A. Foster Higgins surveyed at the end of 1992 also indicated that disability management has become one of the greatest concerns facing Human Resource professionals today.

As a result, the Canadian-based consulting firm focused its 1993 survey on casual absences, short and long-term disability, and Workers Compensation issues. The results confirmed that the level of concern is well founded, particularly for the mining industry.

Overall, 860 employers, representing 12 industry sectors (including a mining and construction sector) from extremely small to employers with thousands of employees, responded to the survey.

The survey results indicated that the average amount of time lost to casual absence for the overall population is about 5.5 days per employee, per year. That represents almost 2.3% of payroll, which is higher than the average payroll cost of the provincial health care plans and higher than the actual cost of most other government-provided plans. In addition, there are costs for short and long-term disability plans, for Workers’ Compensation, for those covered by it, and for all the hidden costs associated with lost production.

About 40 companies in the mining and construction sector participated in the survey. Based on their responses, the average number of days of casual absence for unionized employees, of those companies that knew, was about 6.5 per employee, per year.

Even more startling is the fact that 60% of this sub-group did not know the level of union member absenteeism in their respective organization. This probably means that absenteeism is a much greater problem than the overall results suggest.

We also discovered that the mining industry is less likely to have a formal policy related to absence control. Overall, 67% of companies have one, compared with only 51% for the mining and construction companies, and if we look specifically at unionized mining employees, only 33% are covered by a formal absenteeism policy.

There may appear to be good reasons for not having a formal policy. However, our current labor costs make competing in the global marketplace difficult and any reduction in labor costs through effective absenteeism management can only strengthen a company’s competitive edge.

About 30% of all respondents believe that casual absenteeism has a serious or very serious impact on productivity. By contrast, 44% of mining and construction sector companies also feel this way. This suggests that the mining and construction sector has its own set of problems. If we look at unionized employees in isolation, 20% of all respondents are concerned about lost productivity, compared to 30% of employers in the mining and construction sector.

The primary aim of an effective absence control policy is to return a disabled worker to the workplace as quickly as possible. Part of that policy should be to contact an absent employee quickly, to offer whatever resources are available, and to secure any information that will aid in the recovery process.

The attitudes of senior management towards employees has been proven to have a dramatic impact on employee responses to many corporate initiatives, including continuous improvement policies, productivity in general, and many morale issues, just to name a few.

Absenteeism is no different. If employees do not truly believe that they are valued by their superiors, then it is not likely that they will respond positively to management’s concerns about quickly returning a disabled worker to the workplace.

According to the survey, however, only 25% of respondents contact employees during the first week (only 16% within the mining and construction industry), and 64% do so after a “reasonable” (not defined, but intended to mean “no fixed policy”) period. About 75% of mining companies contact employees after that same “reasonable” time period, but 29% do not even contact union employees at all (compared to 10% for all union employees). Traditional relationships with unions may be driving a lot of these responses, but how long can the industry afford to accept such inefficiency?

In addition to casual absences, the survey also produced a curious mix of responses to other questions on short-term disability. For example, only 27% of all respondents feel that short-term disability absences (that is, absences of up to, say, 26 weeks in duration) have a serious or very serious impact on productivity. (Within this response, only 16% feel this way concerning unionized employees — 9% with respect to mining union employees). On the other hand, as many as 62% of all mining and construction companies believe a greater effort must be made to intervene earlier and in a more effective way. This is the highest ranking of all 12 industry sectors, and is tied with the government service sector.

What this suggests is that Canadian employers are recognizing the major impact absenteeism has on the bottom line, not to mention the toll on human lives, and are just beginning to look for effective solutions to combat this serious and chronic problem.

Final results of the Foster Higgins survey will be published by the end of August. For more information about the survey, contact Rick Osborn at (416) 867-4461.