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.
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.
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.
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.
Neil Pickering, Marketing Manager, UK and Northern Europe at Kronos