Britain's £13bn absence bill could be cut by better leadership


Workers taking time off sick cost the British economy more than £13bn last year – but if senior managers and HR were more prepared to muck in and take a lead the bill could be cut dramatically, new research has suggested.

The latest annual CBI / AXA Absence Survey of more than 400 organisations also found that absence levels were 30 per cent higher across public sector organisations than in the private sector.

A total of 66 million days lost across the public sector alone, at a cost of £3.4bn to the taxpayer, according to a new survey.

If the public sector reduced its absence to average private sector levels £1.1bn of taxpayers' money would be saved – enough to pay for nearly 60,000 extra nurses a year, said the CBI.

The total number of days lost through absence across the UK economy fell in 2005 by four million to 164 million days. This is the lowest level since the survey began in 1987.

However, based on the current rate of change in the public sector – from 8.9 days in 2002 to 8.5 days in this year's survey – it would take 30 years for it to reduce its absence rates to the average six days lost per employee in the private sector.

The suggested that a "culture of absenteeism" still exists in too many workplaces, said the CBI and AXA.

As many as 13 per cent of days lost to sickness in 2005 were considered non-genuine by employers – in other words staff "pulling sickies" – at a cost to the economy of £1.2bn.

Nearly three quarters of employers believed that unauthorised absence could be linked to Mondays and Fridays and almost two-thirds thought staff may be taking unauthorised extensions to holidays.

Nearly half (40 per cent) considered special events, like the forthcoming football World Cup, were a likely cause of unwarranted absence.

A yawning gap of almost nine days still remained between the best and worst performing organisations – and if the worst could raise their performance to the best, the overall cost of absence would fall by £5.4bn, calculated the research.

The cost of absence, which included covering salaries of absent staff, paying overtime and providing temporary cover, rose to £531 per employee last year, compared with £495 in last year's survey.

CBI deputy director-general, John Cridland said: "The huge cost of absence to the economy shows why so many CEOs declare that their people are their most important asset.

"Hard work by companies to manage absence is clearly paying off, with overall absence coming down. But so much more can still be done," he added.

"Employers live in the real world and recognise that the majority of absence is due to genuine, minor illnesses.

"Nobody wants staff to drag themselves into work when they are genuinely ill. But there is clearly concern that a culture of absenteeism still exists in some workplaces and this must change," he continued.

"With excitement inevitably building towards this summer's World Cup, employers may well be worried that staff will grant themselves unauthorised days off to watch matches," he added.

Contentiously, the survey found that organisations that recognise trade unions had higher rates of absence – 7.6 as opposed to 5.5 days.

This was particularly true for the public sector and was irrespective of size: all but the very smallest unionised organisations have higher rates.

Last year's survey by the CBI and AXA provoked a furious response from unions, which accused the employers' body of failing to factor in all the unpaid overtime workers did – was more than the absence bill – into their calculations.

Recognising a union in itself was not automatically a barrier to reducing absence, however, stressed the CBI this time round.

Manufacturers that recognised unions had only 0.6 days higher absence than those that did not, whereas organisations in the public sector with union recognition had absence 2.9 days higher than those without.

Since the survey began in 1987, the gap between absence levels among manual and non-manual workers had narrowed, it added.

The gap stood at five days in the early 1990s and is now half that. But it is manual staff that have made all the gains while absence for non-manual employees has remained broadly static for a decade.

Absence levels are higher in manufacturing than in the service industries, although it is manufacturers that have successfully reduced numbers of lost days while service sector levels have not changed – days lost to manufacturing have fallen from seven days in 2004 to 6.3 last year and services remained on six days.

There was still a marked difference in rates of absence between large and small organisations.

Larger ones, employing more than 5,000 staff, averaged 7.4 days' absence per employee, whereas smaller ones with fewer than 50 employees averaged just 4.2 days.

The most likely reason for this difference was because more small firms put senior managers in charge of absence, and staff had a greater awareness of its impact.

For the first time in the survey, HR managers were found to be the most effective at dealing with absence. Where they were in charge rather than line managers, nearly two fewer days were lost.

The survey revealed, too, that managers may not be using the most effective policies to manage absence.

The policies that had the most impact were waiting a period of days before paying sick pay, offering bonuses for good attendance and providing early access to medical care through private medical insurance.

Cridland continued: "Absence is best managed with both carrot and stick – schemes that reward the good attendees work best together with those that deter the worst offenders."

Rehabilitation services, which include flexible working, counselling, training and treatment, are now offered by 84 per cent of organisations – up 24 percentage points on the previous year.

Dudley Lusted, AXA Head of Corporate Healthcare Development said: "Short-term absences caused by genuine illness should not pose a problem for those workplaces where employees are well motivated and are both encouraged and supported to give their best.

"Long term absence, on the other hand, is largely a medical issue and is dealt with best by early intervention and active management."