Reducing absence rates at DENSO

Citation

Davis, L. (2008), "Reducing absence rates at DENSO", Strategic HR Review, Vol. 7 No. 1. https://doi.org/10.1108/shr.2008.37207aaf.009

Reducing absence rates at DENSO

Rewards

Reducing absence rates at DENSO

Short case studies that demonstrate best practice in rewards

Lissa Davis, compensation and benefits manager at DENSO, shares how the company achieved a reduction in employee absence rates.

Two years into its new reward strategy, DENSO, a car air conditioning systems manufacturer based in Telford in the UK, is reaping the benefits of taking a pro-active approach to sickness absence. In that short time, the organization has successfully reduced employee absence rates from 7 to 5 percent and has a comprehensive set of initiatives planned to ensure this healthy trend continues.

Health-related sickness absence is one of the biggest concerns for British business today. It is estimated that the average level of health-related absence currently stands at 8.4 days per year, per employee, which is equivalent to 3.7 percent of working time lost, while the average cost of absence equates to £659 per employee per year (Chartered Institute of Personnel and Development, 2007). The increased pace of today’s working environment has affected the daily workloads of the majority of employees forcing them to cope with longer working hours, increased demands and greater pressure to achieve.

Sickness absence can have a serious impact on the bottom line making it an issue high on the agenda of most human resource professionals, managing directors and conscientious line managers. Employers who do not take stress or health issues in the workplace seriously can leave themselves open to the risk of legal proceedings and compensation claims from employees. Moreover, “duty of care” responsibilities have forced employers to look in detail at their healthcare strategies and ensure appropriate measures are in place to look after employee health and well-being before a costly lawsuit or litigation proceedings wipe pounds off the bottom line and damage credibility.

DENSO gets serious about health management

With these issues in mind, it is crucial that employers understand how the implementation of a strategic health management program can make a real difference – showing staff that their health and well-being is of importance. Prior to 2005, the only benefit that DENSO offered employees was access to a pension policy. There were two schemes in place – both were contributory and offered employer contributions, but at different levels. The company recognized the need to reduce sickness absence within the organization and wanted to introduce a valuable benefit that could be provided to all members of staff regardless of age, level or length of service with the organization.

In April 2005, DENSO implemented a healthcare cash plan for every member of its 1,450 strong team, from healthcare provider HealthSure. It worked with a benefits consultant who recommended HealthSure as a provider that would enable it to offer a tangible benefit that its associates and their families would find useful. It was important that it was something the company could offer to everyone in every area of the business, not just more senior personnel.

The plan covers key areas of everyday health and well-being and provides money back towards a check-up at the dentist, eye-test at the optician or appointment at the physiotherapist, while also providing employee assistance programs to help meet duty of care requirements. The feedback following its introduction has been excellent. Everyone seems pleased to have a benefit that they can really use, particularly getting cash back on the optical and dental treatments. Employees also have the option of upgrading the plan to include different benefits, such as access to maternity and paternity grants.

A comprehensive approach to healthcare

When DENSO looked at best practice, it discovered that employees are away from work as a result of personal issues. It is relatively easy for an organization to tackle work-related issues, but it is much trickier when it comes to personal matters, which is where the employee assistance program, provided as part of the healthcare cash plan, comes in.

The company recognized that stress-related sickness is often a culmination of a number of issues, including work and personal problems – the thinking was if it could help staff to resolve those personal issues quickly, it would be good for them and good for the company. As part of the employee assistance program, a helpline provides employees with 24-hour, 365 days a year telephone counseling.

The healthcare cash plan, compliments the other health services the organization now provides for staff, including occupational health nurses and doctors, a physiotherapist and counseling services that cover areas such as cognitive behavior therapy. DENSO also made the decision to cover the tax liabilities due on the healthcare cash plan, therefore making it a truly free and accessible benefit to all members of staff.

Employee welfare is key to the workplace ethos at DENSO. It understands the detrimental effect that sickness absence can have on a business and why it is becoming more important for organizations, to look after the health and well-being of their most valuable asset – their employees. While some sickness cannot be prevented, it is important to realize that fast and easy access to professional healthcare and advice can be a decisive factor in reducing time away from the workplace.

Looking to the future

Over the course of the next five years, DENSO plans to steadily expand its benefits package, in-line with the needs and requirements of employees, at the same time as honoring its key environmental and social responsibilities. It recognizes that being a green employer has shown to improve a brand and therefore attract potential employees, because people want to work for organizations with environmental policies. It may also help to increase motivation and engagement through a shared set of values, reduce labor turnover and improve the health of the workforce. The company believes that promoting sustainable travel as part of an organization’s green policy is not a luxury as it brings many benefits to a business as well as to the health and job satisfaction of employees.

According to the Chartered Institute of Personnel and Development, around three quarters of UK employees now consider it important to work for a company that has an active policy to reduce carbon emissions. DENSO has a multi-cultural workforce and is keen to build a comprehensive benefits package that will appeal to all of its employees, irrespective of culture or language. It has plans to introduce a “Bike to Work” scheme along with identifying ways for each employee to reduce their carbon footprint by utilizing government green initiatives.

Moving forward, the company wants to work towards reducing its sickness absence levels further. It hopes to achieve this with the introduction of two new salary sacrifice schemes combined with a “Give As You Earn” incentive, while there are also plans to provide employees with a total reward statement.

About DENSO

DENSO is a global supplier of advanced automotive technology, systems and components. It operates in 32 countries and regions with more than 112,000 associates. Global consolidated sales totaled US $30.6 billion for fiscal year ended 31 March 2007. In the UK, DENSO employs 1,450 people at its Telford manufacturing site. Website: www.denso-europe.com