Focus on wellbeing can help reduce sickness absence

Effective absence management is good for a company's bottom line as well as its employees. Yet many businesses are in the dark when it comes to the impact of sick leave on their business.

Although 85% of employers record the sickness absence of their staff, only 63% measure the knock-on effect this has on the business, according to new research by Group Risk Development (GRiD).

The industry body for the group risk sector warns that counting sick days alone is not enough as it doesn't allow the employer to spot issues, make any strategic changes to mitigate the impact or, ideally, prevent it in the first place.

"It's surprising that some employers do not record absence at all, but concerning that so many don't appreciate the benefit of understanding how staff absence affects their organisation," said Katharine Moxham, spokesperson for GRiD.

"It is possible to manage sickness absence effectively, and prevention is always better than cure."

Number-crunching on absence data really highlights how much employee absence can cost a business, says Alasdair Hobbs from Shropshire-based HR consultancy Human Results.

"For example, a company employing 100 staff, with an annual turnover of £5,000,000 and a profit of around £3,000,000, would be making £30,000 profit per employee," Hobbs told Shropshire Live.

"An absence rate of eight days per person, per year, would require the hiring of four people just to cover these absences, plus the extra costs of further cover requirements, along with the possibility of paying existing staff overtime or using interim staff.

"The cost could range from £110,400 to £276,000. But a reduction of absent days from eight days to seven, per person, would save £22,000 -- nearly enough to pay one person's salary, for an entire year."

Managing absence due to sickness requires effective people management policies, which may be helped by a focus on employee wellbeing, says HR organisation the CIPD, which notes that most absence is genuine.

Employee health and wellbeing should be a core element of any HR strategy, but CIPD research shows that half of UK organisations don't have a formal wellbeing strategy.

GRiD also advocates employers working with their employee benefits providers and advisers to determine the best methods to manage staff absence and to support staff back into the workplace.

"This works at both a macro level when analysing data and trends but also at individual employee level when helping specific staff to make a safe and successful return to the workplace," Moxham added.

"There's a lot of support available to help with absence management within health and wellbeing benefits, and especially within group risk benefits (employer-sponsored life assurance, income protection and critical illness). It makes sense to utilise it to the full."