Awareness of the huge impact of sickness absence is growing in senior management circles, fuelled by shock statistics such as last year’s CBI/Axa Absence and labour turnover survey, which pointed to a £13 billion dent in the nation's coffers. But while the issue may be creeping up boardroom agendas, the techniques needed to tackle the problem lag some way behind. It’s true that most organisations are taking steps to address absence sickness – the problem is that few are taking their efforts far enough to generate meaningful management information and minimise the long-term impact.

In fact, approaches to absence management are still often constrained by HR disciplines that have their roots in administrative procedure rather than high-level management strategy, and by people management philosophies that rely on instinct rather than process. Many small organisations, for example, have no formal processes in place to monitor absence – or if they do, they often get overlooked when more immediate business concerns take priority. As a result, companies miss tell-tale attendance trends and have no credible records to fall back on if they need to address absence issues with individual employees.

While medium and large-sized organisations are more likely to have procedures in place to collect data, the quality can still be patchy. That’s particularly true of manual systems – relying on busy line managers to submit paper forms and HR administrators to key in data accurately is hardly a foolproof process.

And even where companies do capture absence information, they don’t always use it to the best effect. Historically, HR departments have tended to take an operational approach to most kinds of employee analysis, aggregating figures and comparing them to historical trends or industry benchmarks. But that only gives an indication of relative performance. What really matters is how absence impacts the business – or what Webster Buchanan Research calls Workforce Business Impact analysis.

The principle behind this kind of analysis is that some kinds of absence hit a company harder than others. In part this is down to job function and seniority – it’s usually easier to replace a receptionist or database marketing administrator with temporary cover than to fill the shoes of a product manager or relationship-based salesperson. It’s also a function of speciality: the person who keeps your ageing software applications up and running may not command a high salary, for example, but they may well have skills and specialist knowledge that are hard to come by elsewhere. And it’s also connected to the impact each job has on day-to-day operations, something that varies during different business phases.

Even relatively straightforward business impact analysis can throw forward some useful indicators. Analysing the cost of covering absent employees – whether through overtime payments or hiring contractors – can help identify the most sensitive areas. But the findings can also be placed in a wider business context. How is absenteeism in a particular department affecting productivity? Is absenteeism lowering customer satisfaction, perhaps because a senior sales person has been replaced with a less experienced colleague or reduced staffing has disrupted deliveries?

This kind of comparative analysis provides organisations with a context to develop more meaningful absence management initiatives. Traditionally, employees with the worst attendance records tend to be targeted, but in many cases colleagues with a marginally better record will actually be having a bigger impact on business performance – and they’re the ones that should be tackled first. Likewise, if you’re going to drill down into the root causes of absence peaks – to find out, for example, whether poor line management or workload surges are causing problems – then you need to be directing your scarce people management resource towards the teams that matter most.

The biggest problem many organisations face is getting hold of the raw information they need to draw these kinds of conclusions – and as with other forms of analysis, process automation is a good way to start generating it. Time and labour systems can be deployed in both traditional shop floor environments and professional service organisations to collate data direct from employees, but elsewhere it’s usually down to line managers to update the records. While paper and spreadsheet-based systems might be adequate for smaller companies, they require manual oversight by an administrator and usually some element of rekeying, both of which drain resource. That’s why mid-sized and larger organisations are increasingly turning to manager self-service applications, which give managers access to the central HR system over the Internet or company intranet to enter and analyse data. Many systems offer drop-down menus to categorise the type of absence and reason, helping standardise data entry and making it easier to analyse aggregate data.

These applications can also be useful on a day-to-day basis to identify immediate absence problems, particularly in showing when new instances of absence are part of a less obvious broader trend. Some applications allow organisations to set parameters based on what levels of absence are acceptable during a given period, using relatively simple gauges of days lost or more sophisticated metrics such as the Bradford factor, which focuses on the frequency of occurrences of short-term absence. Whenever parameters are breached, managers and HR are electronically notified.

Applying broader business metrics to disciplines such as absence management in this way helps puts human capital performance management on a board-level footing with financial performance. It's only when they're armed with the right knowledge that organisations can apply business resources more shrewdly to tackling people-related issues.