Marketing Mangager UK Kronos
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Absenteeism:The detriment to the UK economy and workforce productivity

8th Oct 2013
Marketing Mangager UK Kronos
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It was interesting to see the results of CBI/Pfizer’s recent Absence and Workplace Health Survey, which found that absenteeism is costing the UK economy a staggering £14 billion a year. Further research released from business advisers PwC shows sick days alone are costing British business almost £29bn a year because workers are taking more than four times as many days off work as their counterparts in across the globe.

Business implications

While well aware of the headaches of absenteeism, many managers do not have a clear understanding of the full costs of employee absence. Factors such as the cost of compensating employees who are absent, the additional expense to fill the gaps with overtime or temporary labour, the drain on managers’ time and lost productivity can average 35 percent of base payroll. Without visibility of these trends in absenteeism, UK businesses will continue to struggle to contain costs.

Employee absence can take many forms including holiday, sick time, late arrival and early departure, extended break like paternity/maternity and union negotiated leave. Each of these absence types whether planned, incidental, or extended carries with it its own costs, management headaches, risks, and productivity hits.

Workforce implications

Absence is a key issue that businesses often require help with, that actually costs real money and creates a lot of pressure on other members of the workforce within an organisation. It also significantly, and negatively, affects both productivity and employee engagement. 

Further negatives absenteeism can have on the workforce include low morale, overtime and HR costs.  When there is an unscheduled absenteeism, the HR department must act upon this immediately, trying to find a temporary replacement for the day, or work with departmental managers to re-assign existing employees to make up for the lost workload.

Management

Patterns of behaviour like extending the weekends with sick days, arriving late or leaving early and taking long breaks cannot be easily monitored or tracked manually and are often ignored by busy managers. This makes it very difficult for managers to actually manage their employees who are working, as they have to manage absence across the workforce as a priority. 

Without the systematic means to manage all forms of employee absence, businesses are failing to comply with government regulations, collective bargaining agreements and corporate social responsibility targets. This can lead to serious consequences like working time directive, non compliance and employee-relations problems that can result in low morale, poor employee engagement and costly turnover.

The latest CBI / Pfizer study highlights the fact employee absence kills productivity.  In fact, absence can account for between 20 and 40 percent of net lost productivity per day, found by a research conducted by proudfoot consulting. Businesses need to be able to shine a light on workers with attendance issues so you can take action and reduce the toll employee absence takes on an organisation.

In today’s fast-paced working environment, absenteeism can have widespread business and workforce implications which can be a real detriment to success. Employee engagement takes a huge hit due to absenteeism and organisations must address this to have a cohesive workforce. It is extremely important for managers to be able to manage all absence-related policies comprehensively so they can manage the impact these risks can have on your bottom line.

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Replies (2)

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By John Picken
08th Oct 2013 14:09

Nobody knows.

The PWC survey says that the cost is twice that found in the CBI survey. I've spoken with PWC and they can't explain this massive difference other than the use of 'different methodologies'. They gathered data from 2,500 employers whilst the CBI got 153 responses to their survey from HR managers.

In December 2012, the HSE said the cost was £12 billion.

The most recent survey by Wolverhampton Business School quotes a figure of £32 billion and suggests that the UK figures are much lower than Germany or France. However the methodology used of just asking managers if the company had a high rate of staff sickness and recording the response as either ‘yes’ or ‘no’, with no further statistical detail is an interesting approach.

Does it matter that nobody knows? Yes and no.

Yes in that how else can the collective impact of all the absence management initiatives undertaken by employers be measured and assessed? Knowing the real cost would positively influence government policy in this area.

No in that what really matters is the cost to each individual organisation, how they see it affecting business performance and what approach they want to take to manage their own set of circumstances. Why should it affect you that one survey is £15 billion lower than another? What changes have you seen in your own absence costs over the last 5 years and why? 

 

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By donr1
14th Oct 2013 00:37

Agree with John here, because all that most surveys tell us is what we either already know or have a pretty good handle on anyhow.

What is needed is real data broken down into the various kinds of absences.  I note the lead article talks about annual holidays..........well they are there by law and are best left out of the discussion due to the fact we cannot do anything about this other than change the law.  Therefore a survey specifically targeting the separate areas of sick leave/unauthorised absences/early departures/late starts would be more beneficial.  Then maybe we can apply the thinking in the associated article 'An Iceberg Sank the Titanic'.

Cheers.

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