Absence can cost your business in many ways.
In the first part of our series on the risks of absence, we explored how poor absence management can result in many operational problems for your business.
In this installment, we’ll discuss the heavy financial cost of poor absence management.
The financial cost of absence, in numbers
How much is absence costing your company?
According to one study, each individual day of unplanned absence will cost your company approximately £107.85. Most employees take around three days off sick each year. So cumulatively, unplanned absence costs UK employers around £29bn a year.
Then there are the hidden costs of absence. If someone cannot work, you may have to pay an employee overtime to fill the gap. Employees tend to be 30% less productive when covering colleagues. And according to Britain’s Healthiest Workplace survey, lost productivity costs the UK economy £73bn a year.
Our recent research also indicated that 55% of companies don’t know the cost of absence.
The negative absence ripple effect
So if unplanned absence brings so many financial costs, should your absence management policy be to reduce absence as much as possible?
This approach to absence management can contribute to negative company culture. If your team feels like absence must be avoided at all costs, a culture of wariness and distrust can creep in.
This can lead to presenteeism: Because they don’t want to let the team down employees may continue to work even when they are unwell. It can also lead to absenteeism: Rather than taking the leave to which they’re entitled, employees may choose to use their annual leave instead of sick leave.
It’s the negative absence ripple effect. The long-term results are burnout, spiraling stress rates, and a higher staff turnover. Few can thrive in a company with such a toxic culture. And if your employees can’t be their best, how will your business ever grow?
Absence is not a four-letter word
Cultural changes don’t happen overnight. But a good place to start is by changing your attitude towards absence.
Show your employees that you trust them with absence, and they’ll trust you right back. In time, you can transform your company culture into a culture of mutual trust – a place where innovation can happen and where everyone can be at their best at all times.
It can start with your absence management system. By making it easier to book leave, a good absence management system can destigmatize absence, helping your employees avoid burnout while you can boost productivity by fighting presenteeism.
This is what Dentons, the world’s largest law firm, achieved with the Edays absence management system. They now have a clear picture of absence patterns and trends across their entire organization. They can see what’s working and what isn’t, and intervene whenever necessary to address absenteeism, presenteeism, and burnout long before they become problems.
“The data-driven evidence Edays gives us will lead to more nuanced decision making aimed at supporting our employees’ health and wellbeing and improving their overall experience of working for the firm.”
Stay tuned for part three…
What’s your absence risk profile?
If you take a trailblazing attitude to absence management you can reduce costs while enjoying unparalleled efficiency and productivity through championing a positive company culture.
Head here to get your free absence risk profile report, and discover the powerful relationship between good absence management and reduced financial risk.