Skip to main content

What is the true cost of workplace absence?

By Adam Shelverton
Senior Rehabilitation Consultant

Employee absence cost the UK economy a staggering £14 billion in 2012 according to a CBI report published last year. Reducing the amount of down time employees have due to illness or injury would undoubtedly reduce this figure significantly but companies need to first understand the real cost of absence to their business.

In December 2013, the Office of National Statistics published their annual survey of hours and earnings for the UK and calculated the average weekly earnings for a full time employee (before tax) at £517, an increase of 2.2% on 2012 figures.

The average versus the true cost of absence

The average cost of absence per day equates to £103.40 but this is based on loss of earnings alone and does not fully reflect the true cost.  For a more accurate representation, employers need to also factor in:

  • sick pay
  • the costs of time and administration of managing absence at line manager level and above
  • cost of replacement – staff cover, overtime or agency staff
  • the cost of potential reduction in production/output
  • occupational health costs associated with absence management, treatment and rehabilitation
  • costs associated with amending or altering the workplace in order to help facilitate a return to work and accommodate potential disability– a requirement outlined by the Disability Discrimination Act (1995)

Some absence due to minor illness or injury is inevitable and for the most part can be managed by employees taking a common sense approach to self treatment.  Other illnesses or injuries, however, benefit from some form of rehabilitation intervention and the key is ensuring that those employees who need support services can access them quickly.

Early intervention dramatically improves return to work rates (RTW) but too often businesses do not appreciate the impact improving RTW rates can have on their bottom line.   Reducing the cost of absence for an organisation does not necessarily equate to increased spending however.  Smarter use of existing services, better visibility of absence trends and the purchase of employers' liability insurance, that has a quality rehabilitation programme built in, can have a huge impact.

For more information, take a look at QBE's Understanding the Cost of Employee Absence report

Your contact

Your contact

Adam Shelverton

Adam Shelverton

Rehabilitation Manager

Tel: +44 113 290 6321