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Report into the cost of absence
14/06/2006
Majority of companies remain clueless about cost of absence
A new survey published today reveals that many UK companies are clueless when it comes to how much long term absence is financially costing their business.
As World Cup fever focuses attention on staff taking an occasional ‘sickie’, the report – published by ICAS, Europe’s leading employee assistance and Well-being company – revealed that a staggering 68% of the UK companies surveyed are failing to calculate or even estimate how many thousands of pounds absence costs them each year.
Ninety-two per cent of organisations said they measure absence levels, which supports the growing awareness amongst businesses that they need to address absence and fits with the fact that most have put measures in place to help employees return to work. However, less than one fifth of them calculate the financial cost.
Stephen Galliano, Chief Executive of ICAS, said: “It is remarkable that over two thirds of organisations do not know or are even able to estimate what absence costs them. Some of the largest companies are losing tens of millions of pounds each year, without being aware of the figure. In any other area of a business, being ignorant of such large losses would raise serious questions.”
Although the CBI estimates the cost of absence to the economy as a whole, ICAS argues that individual companies need to keep track of their own losses. “Initiatives to tackle absence need to show reductions in absence and how effectively they get people back into work,” argues Stephen Galliano, “but it is just as important to prove a return on investment. It is the clearest way to value employee assistance programmes, return to work schemes and occupational health initiatives.”
The ICAS survey, which researched absence amongst its client organisations, also revealed that: · GP advice is one of the biggest barriers to getting an employee back to work. · NHS waiting times are also a big barrier. For example, if a GP refers someone for counselling or cognitive behavioural therapy, it can take up to three months to access the help. · Mental health plays an important part in nearly all cases of long-term absence regardless of the initial cause. · Where organisations did already calculate the cost of sickness absence, the average figure was £731 per employee per year, compared to the £531 reported by the CBI. · The average rate of absence was 6.95 days per employee per year.
Leonie Nowland, Head of ‘Return to Work’ services at ICAS, explained what lies behind the issue of GPs’ advice being a barrier. “GPs can delay someone’s return to work by signing a sick note without tackling the underlying causes of stress. In the meantime, being off work can itself contribute to mental ill health. Part of the problem is the often subjective nature of any assessment about readiness to return to work. The employee waits for the GP to say they are ‘better’, whilst the GP is also waiting for the patient to report an improvement. GPs unwittingly exacerbate the cycle of absence. Much more constructive is for the employer and GP to work together with the patient to create a return to work programme, where work can form part of their recovery. Long term absence is as damaging for the employee as it is for the company, so it is in everyone’s interest to find a way to help employees return to work.”
Centrica plc, takes absence very seriously, as taking care of employees has an enormous impact on the company’s bottom line. The company has 35,000 employees in the UK and has an occupational health team as well as using external support from ICAS. David Flower, Chief Occupational Physician, explained why tackling absence matters: “Long term sickness absence is miserable for the individual but it is also costly for the company. That’s why we take action from day one of an absence, identifying the problem, the likely impact and the most appropriate intervention for the individual.”
Measuring the financial cost is an intrinsic part of David’s work. “Like any other department we have to save more than we spend, so we demonstrate value by measuring the cost of the problem against the cost of the intervention. We do it very successfully and that’s why we can justify our proactive and comprehensive programme of prevention, intervention and return to work initiatives. For example, when we piloted a preventative backcare programme, the result was a 57% reduction in sickness absence amongst gas engineers in the subsequent six months. Crucially, we were able to prove a 15-1 return on investment.”
Notes to editors
1. For a full copy of The ICAS Absence Survey, to arrange interviews, for written case studies or further information, please contact Carole Scott or Gail Buckle at BOTTLE PR on 01865 882988. Email:carolescott@bottlepr.co.uk or Email:gailbuckle@bottlepr.co.uk
2. Research methodology: ICAS invited 487 client organisations to take part in an email survey, between November 2005 and January 2006. A 27% response rate generated 133 respondents, representing a total employee population of 748,284 people, of which 53.67% were male and 46.33% were female. All industry sectors were represented covering the spectrum of organisations operating in the UK economy and were a reflection of the spread of organisations invited to take part. Private sector organisations represented 81% of respondents and public sector organisations 19%.
3. About ICAS: ICAS (www.icasworld.com), established in 1987, has grown into one of the world’s leading providers of employee support and well-being services.
They have operations in 17 countries (spanning Europe, Africa, and South America) and strategic partnerships in North America, Australasia, and Asia Pacific, delivering services in English and local languages 24 hours a day, 365 days a year.
ICAS provides companies and organisations, across all industry sectors, with assistance and support on a broad range of behavioral and practical issues affecting an employee’s ability to perform their best at work. This includes assistance in managing stress, improving attendance and developing people.
ICAS leads the field in crisis management support and has unparalleled experience of dealing with critical incidents and large scale disasters throughout the world. By adhering to the same clinical and account management protocols in all offices, clients receive a consistent and highly professional standard of service from wherever in the world they make contact. This also allows organisations to benchmark employee performance indicators across multiple sites or borders, and act accordingly.
ICAS directly supports over one million employees in over 600 companies worldwide. Clients include companies, large and small, from both public and private sector.
- © ICAS