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Can innovative pay reduce sick days?

A new HR strategy introduced by logistics company Europa Worldwide Group has reduced the number of employee sick days by one-quarter

Turning over £90m, Europa sought to reduce its average 4.4 sick days per person with the introduction of a new sick pay policy six months ago. Following almost 2,100 days taken sick in 2014, mainly in its bigger warehouse sites and requiring costly agency staff to be called in, Europa launched its ‘five-day non-sickness pot’ at the start of 2016.

Although the new scheme will ultimately cost Europa more, the view is that it is part of a long-term strategy in which senior staff have committed to invest. Europa’s HR and facilities director, Carl Potter, described how crucial it is to the business’s success in a competitive market that its large number of staff can be relied upon.

He said that while the number of sick days taken was commensurate with UK averages, Europa was suffering too many sick days for an organisation of its size and with its level of aspiration. He explained how senior management had analysed figures establishing that nearly two-thirds of the 600 staff would have benefited had the scheme been introduced in 2015; of these, 33% would have enjoyed the entire bonus amount.

The bonus pot equates to an extra five days’ pay for each staff member, with one day’s extra pay for each of up to five sick days not taken; for example, three days’ extra pay will be received if only two days are taken off for illness in any one year.

Should an employee be off work sick for more than five days, they will lose their entitlement to any pay from the pot; however, they can still benefit from sick pay for a period of five to 10 days. There are no negative repercussions for staff members who suffer a protracted period of illness.

This new approach from Europa is designed to motivate staff to work in a positive way to reduce the number of costly sick days and help spread the message that Europa is a unique, desirable, forward-thinking and aspirational employer that encourages large numbers of employees to benefit from bonuses and be the best in the business. Further HR changes are due to be incorporated in the future, including a more engaging, practical and positive staff appraisal process.

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