Why managers must track employee absence
One-off sick days taken by employees to bulk out holiday time are presenting UK firms with a huge bill, says PwC – but there may be ways of controlling that cost…
New research showing that the pulling of “sickies” is costing companies £9 billion per year is a significant underestimate, according to the head of UK business-software firm Kronos. The provider of absence-tracking tools has urged companies to adopt accurate measuring technology to deter staff truants, following this week’s revelations from PwC.
Released on Wednesday, a report from the leading auditor showed that UK firms are losing billions of pounds due to around one third of staffers lying or exaggerating to take time off work. The study of 2,000 employees showed 32% of people pulled a sickie because they were hungover, 8% to watch a sporting event, 26% to avoid boredom with their jobs and 11% because… it was a Monday.
While the emergence of flu or a stomach bug tend to be standard excuses used by work-dodging staff, the study revealed some other startling smokescreens used to cover up wilful absence, including – somewhat improbably – a man who said he was starting the menopause.
Kronos director Simon Macpherson advised bosses that time-measuring tools to record absences can address the issue by flagging up unusual patterns. “The PwC report states that unauthorised absence is costing UK businesses £9bn per year,” he said, “but in reality this figure is likely to be much higher. Many organisations don’t accurately monitor or measure absence rates as they simply don’t have the technology or resources to do so.”
Macpherson added that companies are only harming themselves if they fail to accurately record staff sickies, as the problem can demoralise those who keep clean sheets and dutifully turn up.
“Factors such as the cost of compensating employees who are absent, the additional expense to fill the gaps with overtime or temporary labour, the drain on managers’ time and lost productivity can average 35% of base payroll,” he stressed. “Without full visibility of absence patterns, UK businesses will continue to struggle to contain costs,” Macpherson explained. “The impact also stretches beyond just financial implications. As well as putting extra pressure on other members of the workforce within an organisation, employee absence significantly – and negatively – affects productivity and employee engagement.”
PwC says that if the costs of genuine and imagined illnesses are combined, UK businesses have actually enjoyed a reduction in losses from £29bn a year ago to £23bn. However, random sick days are clearly still an issue for British workers, as they represent a significant proportion of the overall absence bill. On a global scale, UK workers have almost triple the amount of sick days as staff in the Asia Pacific (2.8 days) and almost double those in the US (3.8 days).
PwC head of human resources consulting Jon Andrews said: “Our research shows that when it comes to reducing absence levels, carrot rather than stick is the best approach. Having a flexible working culture can go a long way to breaking the cycle of people feeling that they are entitled to days off outside of their holiday allowance and encouraging better employee engagement. The change in law that means anyone now has the right to request flexible working should help more people achieve the work-life balance they need without impacting on organisations’ productivity.”
By the same token, he added: “Organisations need to get better at recording and monitoring absence patterns so they can pinpoint issues and tackle them. Team targets for projects should also encourage positive peer pressure and a sense of ‘we’re in it together’. Too many organisations are blindly unaware of how much absence is costing their bottom line.”
For further thoughts on related matters, check out this CMI blog on ethical behaviour in the workplace.