April 26, 2017

Could Low Absence Rates Pose a Risk to your Business?

Results from the CIPD’s seventeenth annual Absence Management survey in partnership with Simply Health show that the average level of employee absence for 2016 was 6.3 days per employee.

That’s lower than at the height of the Great Recession in 2008-09 (when typically absence rates fall as employees worry about job security), and is in fact the lowest recorded absence rate since records began in 1993.

Received wisdom says falling absence rates are good for a business, reducing costs and improving productivity – so how could low absence rates actually pose a risk to your business?

Absenteeism down across all company sizes and sectors

The reduction in average absence levels occurred across small, medium and larger organisations but is particularly notable in medium sized organisations with 50–249 employees.

Absence levels tend to be higher in larger organisations than smaller ones regardless of sector – possibly because absence is likely to be more disruptive and noticeable in smaller organisations where individuals feel less likely to be missed.

Additionally, sick pay schemes tend to be less generous, which may discourage absence or encourage a speedy return to work.

The decrease has also stretched sector wide, with the greatest drop in the non-profit sector and the smallest in the public sector where employees have typically had, on average, over three days extra absence each year compared with their private sector counterparts.

What’s caused absence rates to drop?

While the findings are good news for line managers up and down the UK, we need to understand the reason for such a dramatic drop.

Is it because health levels of employees have dramatically increased in the last few years? Or is the cause down to the increased focus on managing sickness absence in the workplace?

Here’s some possible reasons for the trend:

  • Better monitoring means it’s easier to spot patterns of absence, identify the possible causes and make the necessary improvements
  • There is now a wider recognition that absences can be because of issues in the workplace. Employers are more readily making changes to job design and focusing on employment relations, communication of information, quality of working relationships, and flexible working arrangements
  • Line managers are conducting return to work interviews after each period of absence, ensuring that a focused discussion occurs around the reason for the absence
  • The fit note was introduced in April 2010 allowing doctors to suggest ways that employees can get back to work sooner than they might have done under the old sick note
  • The Fit for Work Service was subsequently introduced in September 2015. It helps employers manage the impact of sickness absence on their business and it helps employees to get the support they need to get back to work quickly and safely

Another reason for low absence rates?

At first glance the figures revealed from the survey paint a positive picture which suggests a drastically improved approach to sickness absence by employers — but absence management experts warn that the improved statistics could be a result of ‘presenteeism’.

In other words, employees are taking fewer sick days because they are still attending work whilst they are ill.

A survey conducted last year by Canada Life Group reported that 90% of employees said they come into work when feeling unwell. More than a quarter (28%) feel their workload is too great to call in sick, a fifth (21%) reported financial concerns and 17% feel guilty for taking time off.

And as noted above, it is not unusual for absence levels to decrease during times of economic downturn.

Presenteeism poses a risk to businesses

With presenteeism becoming an increasing feature in many businesses, more studies into the reasons and impact on business productivity are being carried out.

Recent findings from a University of East Anglia study uncovered conflicting results: presenteeism isn’t purely down to ill health and stress, with increased employee motivation contributing to the desire to come into the workplace and causing employees to ignore physical and mental ill health.

However, presenteeism, for whatever reason, comes at a cost. One-in-three employers cite presenteeism as the reason for a drop in productivity, yet most employers are not tackling the issue of presenteeism or its negative and potentially long-term effects on the wider workforce.

Both absenteeism and presenteeism have a significant impact on businesses.

If employers start to tackle both aspects and build on the improvements above, it’s possible we may see some very different results in next year’s Annual Management survey.

For advice on employee absence contact Moorepay’s team of advisors – call 0845 184 4615 for more information.

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About the author

Donna Chadbone

Donna completed her post graduate studies in Human Resource Management (MCIPD) and then spent 7 years working as an in house HR Consultant in the corporate financial services sector. She has worked with a range of clients from the engineering, aerospace, manufacturing, service, leisure, education, construction and care industries.