Truth or Myth? Absence doesn’t cost if the employer isn’t paying sick pay
Despite the fact that you may not have to pay the employee when they are off, there are often unnoticed costs to the business when an employee is absent.
How to determine the cost of absence
The best way to think about how much an absence is costing your company, is to follow the Labour Relations Agency’s advice of focusing on how your company functions when someone is away.
– Do you have to hire temporary staff?
– Are deadlines missed?
– Do customer satisfaction rates suffer if there is no one at all ? Or there is no one sufficiently trained to cover the absence period?
– Do your other staff members get upset at the increased work load?
If you answer yes to any of the above 4 questions, then absence costs your business money, even when contractual sick pay is not being paid.
Temporary staff usually cost more to pay per hour than permanent staff. Further, their lack of experience can mean that productivity will drop. The inconvenience to other staff members also causes a drop in productivity. In addition, drops in customer experience may occur if tempers are frayed. As the saying goes ‘time is money’ and when time is wasted, so is money.
In 2014 the CIPD reported that the average number of sick days per employee has dropped to 6.6 days per year, which is still thought to cost an average of over £600 per employee. In 2011, this cost the UK economy £17bn in total with £2.7bn of that being spent on non-genuine illnesses.
Already in 2013, the revealed the top cause of absence in the UK as stress, only slightly overtaking musculoskeletal problems in 2nd place. Unfortunately, these statistics do not necessarily show us that the reason for a drop in absence is a healthier workforce. This is due to presenteeism – employees coming to work despite illness due to a higher workload and pressures to keep their job. Allowing your employees to continue in this manner will only work to increase long-term absences. This is due to mental health stresses and unresolved physical illness.
There are many causes of absences and therefore a range of ways to decrease absence. The best way to find a solution that works for you is to monitor your absence. This will highlight the top causes for absence in your company. Moreover, this could teach you valuable lessons on what your employees need to become healthier and happier.
Although the average cost of employee sickness in the UK has dropped from 2011 statistics, there is still a large variance between the different sectors. This highlights the difficulty in gaining helpful information for the more practical sectors such as facilities management or production.
If you would like a company absence diagnostic and further information on how to measure your absence, please get in contact with Honeydew – the team behind Absencehub.com. It will save you time, money and problems in the future.