Absenteeism is hitting UK SMEs where it hurts

Seven in ten small businesses say high absenteeism rates are impacting their profitability and productivity.

Absenteeism is having a big impact on profitability say UK small and medium enterprises (SMEs). This is according to 71 per cent of firms questioned in a survey commissioned by HR and payroll specialist Moorepay.

The research finds many UK SMEs are experiencing higher than average absenteeism in their business. According to the Office for National Statistics, the average number of sick days for a UK employee is 4.3 days a year and yet almost half (49 per cent) of small business owners say staff take more than five days off each year. For 14 per cent this figure rises to seven days or more.

Yet with higher than average sick days and the impact on profitability, few firms are taking positive action to reduce absenteeism in their business. This is despite the fact that many feel introducing policies around absences, flexible working, time off for family or medical reasons and return to work programmes can have a positive impact on reducing absenteeism. Almost three-quarters (72 per cent) believe the use of such policies could reduce the rate by 11 per cent or more.

Whilst the vast majority of firms (91 per cent) do track staff absences this is often paper or spreadsheet-based leaving it open to human error – 39 per cent log absenteeism in this way. Many have little insight into the true picture of absenteeism by failing to track the multiple reasons for time off work. Whilst days off sick and annual leave are commonly monitored by 75 per cent and 66 per cent of SMEs respectively, other reasons for absence are less well tracked. Training, compassionate leave, medical appointments, sabbaticals and duvet days are only reviewed by 55 per cent, 51 per cent, 50 per cent, 28 per cent and 22 per cent of businesses respectively.

Despite the business impact of absenteeism, many SMEs have no policies or processes in place to manage or reduce absenteeism in their business even though they recognise this can have an impact on the rate of absence. For example, almost half of businesses don’t offer flexibility around time off for medical appointments (46 per cent) and family issues (53 per cent).

‘According to NICE, the National Institute for Healthcare Excellence, it is estimated that absenteeism costs the UK economy £15 billion a year. And yet, many SMEs have inaccurate or incomplete data on staff absences and are unable to accurately assess how much it is costing their business,’ explains Lisa Gillespie, director of HR services at Moorepay.

‘Those that recognise the business and financial implications are often spurred on to take action. Having insights into absenteeism and taking positive steps to reduce it can have a huge impact on business productivity and therefore profitability – something no business can afford to ignore.’

Further reading on absenteeism

Owen Gough, SmallBusiness UK

Owen Gough

Owen was a reporter for Bonhill Group plc writing across the Smallbusiness.co.uk and Growthbusiness.co.uk titles before moving on to be a Digital Technology reporter for the Express.co.uk.

Related Topics

Absence and Absenteeism

Leave a comment