The True Cost of Absenteeism On Your Business
September 5, 2017
Can you afford all your employees to be absent from work for 6.3 days each year? According to the CIPD, that’s the average number of days UK workers are missing from their jobs. Absenteeism is problematic for employers because it means paying wages for people who aren’t contributing. But there are other expenses that impact your business in less obvious ways. This article uncovers the true cost of absent employees, explains how prevention is better than cure and ways to manage absence.
The True Cost of Absenteeism
Absence costs UK businesses over £18bn per year. The average annual cost of absence per employee is £522 in the private sector and £835 in the public sector which has more comprehensive sick pay and higher rates of absence.
But absence also results in some or all of the following additional burdens:
• Wages to cover temporary workers or overtime to cover additional hours worked by existing employees
• Reduced productivity as the replacement worker gets up to speed
• HR and occupational health service costs in terms of time and/or money
• Additional claims on private medical insurance which can impact your renewal price
• Decreased motivation as other staff experience disruption and additional pressure
• Potential loss of new business depending on the role
• Project deadlines and client satisfaction may suffer as a result
Employees suffering long-term absence can experience decreased skill levels, social isolation, loss in confidence and depression. This often makes returning to work more challenging resulting in additional support.
It’s clear that, depending on the various factors listed above, the true cost of absenteeism can be significantly higher than the compensation costs mentioned above.
The Main Reasons for Absence
Coughs, colds and other minor illnesses are the main reason for short-term absence followed by stress. Long-term absence also tends to be caused by stress as well as acute medical conditions and mental ill health. 25% of organisations report that non-genuine absence is within their top five causes of absenteeism. And, in line with changing demographics – including an ageing workforce and more women in the workplace – home, family and carer responsibilities also cause non-attendance.
Prevention is Better Than Cure
The CIPD’s Absence Management Report states that, over the past year, 50% of organisations have increased their focus on employee well-being with just 8% doing nothing at all. A third of organisations have a well-being strategy with smaller organisations tending to act on an ad hoc or individual basis.
To develop an appropriate approach for your business, you need to understand the challenges your workforce face. For example, if you employ women in their 60s, in nine to five desk jobs with a high emotional load, your wellbeing plan will be very different to a business employing men under the age of 50 doing manual shift-work.
Dealing with Absenteeism
A written absence/attendance management policy is a must for businesses so employees and managers knows what is expected. Other useful tools to manage short-term absence include:
• A requirement for absent employees to speak to their line manager so workload can be planned
• Trigger mechanisms to prompt attendance reviews and identify when absence becomes problematic
• The provision of information and support to line managers to help them identify absence problems and deal with them effectively
• Return-to-work interviews that set time aside for managers and employees to discuss any problems that are causing absences and provide solutions where possible
For support with sickness absence, our free download will give you a helping hand.
Common approaches to managing long-term absence include:
• Return-to-work interviews including assessments to aid a return to work; this may mean that adaptations to the workplace or a phased return to work are required
• Health promotion is a great way to ensure employees have good work-life balance, understand how to minimise stress and identify and deal with other common health issues
• Providing employees with support such as counselling and physiotherapy can speed up employees’ return to work either paid for on an ad-hoc basis or via an Employee Assistance Programme
• Providing employees with planned leave to take care of family or reduced hours can alleviate the problem of unplanned absences
The legal position of absenteeism
One aspect to be aware of in relation to absenteeism is disability discrimination. Even short-term absences can be caused by an underlying disability and this area of employment law that requires careful treatment.
As the CIPD notes, when smaller organisations “need external advice or guidance on absence management … [they] turn to an HR consultant.” Dealing with a potential disability case is the perfect time to seek support.
Disciplinary actions and dismissals.
Sometimes, an individual may have high levels of absence that are not sustainable for the business to bear. This can be grounds for disciplinary action or for a capability procedure to be followed. Dismissal may be an option but only once you have followed the right protocols. Our blog post, How to Safely Terminate Employment gives you more detail about how to do this fairly.
If you need support managing any element of your absence management or employee wellbeing strategy, get in touch on 0330 555 1139 or at email@example.com.