The Professor of Management at the Sacred Heart University in Luxembourg, Marcus Muller tackles, for HR One, the issues and the impact of absenteism, well-being and happiness at work in Luxembourg. 

What are the main trends when it comes to employee well-being at work?

Based on my conversations here in Luxembourg, there seems to be a tendency to confuse employee well-being with employee wellness. Recently, a CEO suggested to me that he did not want his employees to feel “like they were at Club Med”. One of the most robust findings in the organizational siences is that people who feel better perform better, that is more engagement, creativity, resilience, organizational citizenship as well as better social skills, mental and even physical health.

In this context “making employees feel better” does not mean to provide a beach environment with a deck chair. Instead, research has consistently shown that workers and employees perform better when they do not feel the need to balance work and life but can have a life at work, that is feeling respected and recognized, having some degree of say in what they do and how they do it as well as opportunities to learn and progress. One of the results of our recent study on the drivers of absenteeism and engagement here in Lux was that people tend to compensate what they perceive as poor work conditions with extensive positive experiences from their private lives. The bigger the perceived gap between work and private lives, the higher absenteeism and the lower work engagement.

 

Absenteeism has been rising and, therefore, high on the agenda of companies here in Luxembourg. What is your view on the discussion?

First of all, absenteeism is not an isolated organizational phenomenon. Our research data suggest that absenteeism is a slice of a much bigger pie, namely disengagment. That means, increasing employee engagement will, in turn, reduce absenteeism. In economic terms, Luxstatistics estimate the annual cost of absenteeism to companies in Luxembourg to around €400-500m per year. When our research team applied an economic algorithm to our research data translating disengagement into foregone shareholder value, we arrived at a statistical figure of around €15,000 in unrealized value per employee and year due to disengagement. That means 25% of the average annual salary in Luxembourg, €1.5m for a 100 employee company, €6bn for Luxembourg’s entire workforce of around 400,000, and more than 50% of Luxembourg’s outstanding debt of around €11bn. Overall the percentage of disengaged people in our study was at a level of 85% which is close to Gallup’s most recent engagement survey data for Luxembourg in 2013 (87% disengaged employees) even though the methodology for measurement was different. In conclusion, organizations’ fight against absenteeism may be compared to trying to catch a mouse while missing out on the elephant in the same room.

 

What do you think are the main challenges for organizations then to address disengagement and absenteeism?

It seems most companies are still very much driven by the paradigm of Taylorism. The focus is on operating companies as efficient systems – managers control, employees execute! One of our study results was that too much perceived “Control” seemed to be the single most important driver of employee disengagment in Luxembourg. In fact, one of the participants added a hand written note to his paper survey stating “you cannot run a 21st company with the management methods of the 1980s”. I agree with that person, the focus today should be on people, no longer on systems. In a complex global world, no management team alone has the capacity to run a company. The contribution of as many employees’ creativity, network & expertise as possible is required to sustain success. In a world where almost anything can be copied in the short-term, a network of engaged employees interacting productively on a daily basis could be described as the last source of creating a long-term competitive advantage. That is why employees should feel enabled and empowered instead of over-controlled.

Change is all around us. Every time we open our eyes, the world is different. Nonetheless, it is part of our human nature to feel somewhat wary when it comes to “change”. Change is perceived by most of us as awkward and risky. To many  executives their current management style may feel like an old slipper, maybe smelly but comfortable. Therefore, changes tend to happen to a larger extent in those firms and industries where management teams feel they have no other option. For example, big firms with significant going concern issues or start-ups under constant pressure to innovate. In many other cases, the urge to change is not strong enough to drive, rethink and implement new policies, procedures or job designs due to managements’ risk assessment – in one word: they are approaching a cliff but the abyss is not yet in sight!

 

What would be the next steps for a company in Luxembourg to improve employees’ work well-being, absenteeism & engagment?

From my perspective, there are three potential “show stoppers” to innovation in that field: lack of awareness, lack of determination to act and lack of expertise. All three factors seem to be based on one common denominator: financials! Today’s organizations are run by the “numbers guys”. Unless you can convert employee feelings into values providing cost/benefit analytics such as ROI, people and any organizational measure related to improving work conditions will only be considered from a cost and expense perspective. In fact, that may be one of the main reasons for the organizational focus on absenteeism here in Luxembourg – it can be easily converted into numbers! When I presented the results of our economic analysis in terms of lost shareholder value due to disengagement to management boards, the reactions were pretty mixed and digital. Senior executives either questioned my professional qualification and mental state downgrading our conclusions as nothing but an academic exercise. The alternative reaction was a sense of urgency to change, but how and what? Change requires internal ambassadors who are mandated, enabled and empowered to drive the process, for example HR. In my experience, employees have most of the answers, it is mainly about the right methodology to collect them in a structured approach facilitating implementation. In some cases, external consultants may be necessary to provide initial guidance. On the other hand, time and again I have been impressed with HR professionals in Luxembourg who come across as extremely dedicated, creative problem-solvers but often lacking senior management support.