Workplace absence costs UK £12.2 billion

Workplace absence cost the UK economy £12.2 billion in 2004, with concern that £1.7 billion of that cost is due to staff “pulling sickies”.

According to a new CBI report, workplace absence cost the UK economy £12.2 billion in 2004, with concern that £1.7 billion of that cost is due to staff “pulling sickies” rather than absence resulting from genuine ill-health.

The latest annual CBI-AXA Absence Survey, published today, shows that absence cost £495 per employee in 2004 compared with £475 per employee in last year’s survey.

The overall cost of £12.2 billion has increased from £11.6 billion in the previous survey. These figures represent the cost of covering salaries for absent staff, the resulting overtime and temporary cover, and lost service or production time. The survey of over 500 organisations also shows that 6.8 working days were lost per employee in 2004.

The total number of days lost to absence across the UK economy fell by 4.5 per cent to 168 million in 2004, from 176 million in 2003. That brings total absence back in line with the level seen in 2002 (166 million days). The CBI believes rising labour costs and growth in average earnings are the reasons why the total cost of absence has increased despite the lower absence level.

The survey also reveals that organisations fear as many as 23 million – or 14 per cent – of the 168 million working days lost to absence last year were a result of unwarranted absence, or staff “pulling sickies”. This represents a cost of £1.7 billion, broadly the same figure recorded in the previous survey.

Three-quarters of respondents suspect that some employees take illegitimate long weekends by calling in sick on Fridays or Mondays, with 74 per cent of organisations saying there was a link between patterns of absence and the unauthorised extension of the weekend. Two-thirds said there was an increase in absence around Bank Holidays.

Genuine minor illness – such as flu – was the main cause of absence across the economy in 2004. The second most significant cause of absence was stress among non-manual workers, and recurring illnesses, such as back pain, among manual workers.

The survey, which has been conducted every year since 1987, also shows manufacturing firms reported higher absence levels than service sector companies in 2004, with seven days lost per employee compared with six days lost.

Manual workers have significantly higher absence rates than non-manual employees. The average for manual workers was 8.4 per employee in 2004, compared with six days per employee for non-manual staff.

Larger organisations reported higher absence levels than smaller ones. Those employing over 5,000 staff averaged 8.3 days per employee, while companies with less than 50 employees averaged 4.5 days. The CBI believes smaller firms have lower absence rates because it is dealt with by senior management. When senior managers are put in charge of absence, 2.3 fewer days are lost per employee compared with absence dealt with by line managers.

Eighty-seven per cent of organisations are taking action to reduce absence and return-to-work interviews are the most common absence management policy. Two-thirds of respondents have a stress management policy and 60 per cent have rehabilitation schemes in place.

The survey also shows that while long-term absence accounted for just six per cent of all absence cases in 2004, it was responsible for 34 per cent of total time lost through absence.