July 2018
Sickness absence is costing employers more in lost working time despite fewer employees taking time off sick.
In 2017, employees took, on average, 5.6 days off in comparison to 6.6 days the previous year, according to research by XpertHR. XpertHR’s study of sickness absence data, which surveyed nearly 300 organisations and a total of nearly 400,000 employees said it translated to 2.5 per cent in working time.
But employers lost £570 per employee on average last year, whereas the cost amounted to £455 per employee in 2016. XpertHR warned the figures were likely to ‘underestimate’ the full extent of the problem as employers tended to focus on salary costs alone when recording the financial impact of sick leave.
The cost of reduced customer service and missed business opportunities should also be taken into account when addressing absenteeism, the report recommended.
Charles Alberts, head of Health Management at Aon, said, “The true cost of sickness absence is significant, and sadly often under-estimated. Not only is there the direct cost of salary, but hidden factors include lost productivity, pressure on the remaining team members picking up additional work, and internal resource to manage the absence (HR, line managers), to name a few.”
Meanwhile, a recent survey from trade association Group Risk Development GRiD revealed that a significant number of UK businesses are not recording sickness absence at all, with 300,000 businesses failing to record or monitor staff absence. The lack of absence monitoring was found to be more prevalent among SMEs.
The GRiD research also found that businesses with a workforce of over 250 were found to suffer more with absenteeism, with over half (55 per cent) of large businesses believing they suffer from higher rates of sickness absence than industry average. Nearly a quarter believed this was due to lack of effective absence management policies.
Noelle Murphy, senior HR practice editor at XpertHR warned that many HR departments were unaware of the ‘true’ cost of absence and the reasons behind it.
“Better measurements of sickness absence and its associated costs should, in turn, make it easier to persuade managers to engage with absence management initiatives.”
Alberts added: “Good absence management starts with accurately recording each and every absence. Too many employers are unable to report on how much time they lose due to sickness absence and the reasons for these. Without this vital information, it’s near impossible to raise it as a Board issue, drive down absence, and target wellbeing interventions. Absence recording is one piece of a bigger puzzle but is a sensible place to start, and doesn’t have to cost an arm and a leg.”
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