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Organisations Still in the Dark Over True Cost of Sickness
21-07-2008
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*One in three employees don’t even bother to measure sickness costs at all*
Even though three-quarters of UK employers agree that the real cost of sickness should be assessed in terms of lost revenue, only one in ten organisations interviewed for a new research report launched today, go beyond measuring just the wage bill for people who are absent. Surprisingly, one- third (33%) don’t even bother to assess sickness costs at all.
The survey, Absence Management – ten years on, commissioned by HR and payroll software provider MidlandHR and people solutions provider FirstCare, polled 164 senior UK business people on how their organisations manage absence. Many of the questions in the new report were first asked in a MidlandHR survey back in 1998
Whilst the percentage of those who agree that the real impact of sickness should be measured by lost revenue has risen from 61% in 1998, to 76%, the number of organisations that practise what they preach has barely moved – up by just 3% to 10% in ten years.
In addition, only a small number are taking into account the indirect costs of absence. Despite the vast majority (95%) of respondents saying they maintain formal records of sick leave, only 16% track the effect of sickness on customers, while just over a quarter (29%) monitor the amount of time taken to manage the issues caused by and relating to sickness.
Lawrence Knowles at MidlandHR comments: “The CBI this year estimated the average annual cost of sickness at £517 per employee, based on the numbers of days of sick leave. However, when indirect costs such as reduced client satisfaction and productivity losses were taken into account the CBI estimated that this rose by another £263 per employee to £780. In the commercial sector, this has a huge impact on profitability and the bottom line, while in the public sector, it inflates the cost of delivering services.
“A big problem is that the vast majority of UK business leaders are still very much in the dark over the real cost to their organisations of absenteeism.”
Commenting on the research, FirstCare managing director Aaron Ross said: “Complex organisational structures, multiple sites and wide, varying job roles mean that recording absence data consistently can be challenging. This has a knock on effect to a company’s ability to assess the true impact of workforce sickness. Using technology to track this in real time not only relieves managers and HR professionals of the administrative burden of absence reporting but helps identify its causes and patterns, so remedial action can be taken, for the good of employers and employees alike.”
“If more business leaders could see how much profit is lost through absenteeism they may draw a very different conclusion of the impact. The comparatively small improvement in the numbers that properly measure the effects of illness is really not good enough, especially now that moniopting and reporting technology, together with professional medical counselling is readily available.”
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