How much is Sick Note Culture costing you?

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How much is Sick Note Culture costing you?

On July 23, 2013, Posted by , In Blog,Resources for Employers, With No Comments

The cost of Sick Note Culture…

It could be as much as several weeks for pay per employee or 6% of your payroll costs!

These are dramatic numbers and set against this background, the Government is about to launch a review into sickness absence with a focus on getting people back to work as quickly as possible and to reduce long term absence.

Of course anyone waiting for the Government to fix this, or any other business problem could be in for a long wait.  So what can employers do?


Remarkably, little more than a third of organisations monitor the cost of sickness absences to their business.  Knowing the cost, the causes and having systems in place to tackle the issue could save companies several week’s worth of pay per employee every year.  In the current economic climate with input costs rising and margins under pressure this is an area employers cannot afford to overlook.

Key to addressing sickness absence and its impact on business is to understand the scale and nature of the problem.

Average lost time per working year across manufacturing industry is just over 3%; rising to over 7% if you look at manual workers in the paper and print sectors; part of which make up a good portion of the packaging industry.  In simple terms that’s somewhere between 7, and a staggering 16 days per employee per year on average.

When you start to consider cost average, figures can be misleading owing to variations in pay and the costs of covering absence but an average of over £600 per year per employee is equivalent of the pay rises many are seeking.

Sickness absence can be broken into short-term sickness and long term absence.  The main causes of short-term sickness are the typical colds, flu, migraine and stomach upsets along with minor physical strains usually hands, necks and back.  Amongst manual workers long term absence is more often caused by acute problems such as heart attacks, strokes and cancer along with chronic back pain and stress.  Significantly when considering non-manual workers stress jumps to the top of the list for long-term absence; with workload, management style and relationships at work cited as the most common drivers.

Bearing in mind the revelation that little more than a third of companies monitor the cost of sickness absence this information could be quite shocking for some employers.  Clearly there is a need for systems to manage and more importantly minimise sickness absence.

There are a number of approaches to managing sickness absence but perhaps the most important first step is monitor and I would suggest publish the rate and cost of absence in the same way that many companies publish data on lost time due to accidents.  Simply making everyone aware of sickness absence and its cost and impact on the business will deter many from “throwing a sickie”; particularly if it is in the context of the general state of the business, i.e. x costs are up, margins are down and these are the areas we need to reduce costs.

The return to work interview is cited as the most common and widely regarded as the most effective approach to managing sickness absence.  These need to be structured and have specific aims in terms of understanding the nature of the sickness, the cause and what can be done to avoid it in future rather than little more than a chat.  Clearly if someone is not fit to work and risks infecting other people they should not be at work, but I won’t be alone in believing there are those who are a little too willing to stay away from work with minor ailments.  Employers must avoid harassment or victimisation but I believe the employee should understand the impact of their absence.

Other approaches include disciplinary procedures for unacceptable absence, attendance reviews and restricting sick pay.

When considering longer term issues the use of occupational health specialists can be invaluable, including looking at changes to the working environment, hours or duties to assist a speedy return.  Of course when you consider the significance of causes such as stress and back pain to the overall total it is clear that managing these risks, through good health and safety practices, may well have a bigger impact on reducing absence than the various approaches after the fact.

There is no one “size fits all” answer to reducing sickness absence, as the government review will no doubt conclude, but this is a significant area of cost that employers must address.  The starting point surely is monitoring and publishing the scale and cost of current absence levels.

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