Absenteeism costing UK business £32 billion a year, with workers taking almost double the number of ‘sick’ days as US counterparts, says PwC

26 Apr 2011 10:31 AM

UK workers have an average (median) 10 days unscheduled absence from their jobs each year, around twice that of their counterparts in the US (5.5 days) and Asia-Pacific (4.5 days), but on a par with Western Europe (9.7 days). Sickness accounts for around 80% of absence, which also covers jury service and compassionate leave.

With the average UK salary around £25,000, absenteeism is costing British business approximately £32 billion per annum, far more than previous studies have suggested. This figure is also likely to be conservative, as it reflects direct cost of absence and does not take into account potential replacement costs and lost productivity.

Richard Phelps, HR consulting partner at PwC, commented:

“Absenteeism is a malaise for British business. With sickness accounting for the lion’s share of absence, the question for employers is what can be done to improve health, morale and motivation. The line between ‘sickie’ and ‘sickness’ can be blurred, with disenchantment at work sometimes exacerbating medical conditions or preventing a speedy return.

“One might assume the perceived US work culture of long hours and short holidays could lead to higher stress and sick rates. Our data suggests otherwise, or perhaps demonstrates that strong employee engagement and commitment can override workplace pressures. For a variety of reasons, there seems to be a hunger among workers in US and Asia to go the extra mile.”

PwC’s analysis suggests more flexible labour laws in the US and Asia could also play a part, with a sense among workers that there is more at stake if they are not committed.

Richard Phelps, HR consulting partner at PwC, commented:

“Keeping staff engaged is arguably the biggest part of the battle, but you also need clear policies in place to make it less appealing for people to take unwarranted leave, while protecting those people with genuine illness.

“There’s also a question of whether UK employers should be investing more in the health of their workforce. US firms tend to take greater responsibility for staff well-being, whether providing gyms in the workplace or access to councillors.”

Absence levels, and how employers approach the problem, vary significantly for different industries. According to PwC, technology companies have the lowest absence rates of any sector, at 7.6 days.

Richard Phelps, HR consulting partner at PwC, commented:

“Technology firms are often innovative in all that they do, including keeping employees committed. Intellectual capital is hugely important for these businesses, so making sure they get the best out of their people and avoid unnecessary absence is a priority.”

Banking and finance is just behind technology, with absence averaging 7.8 days.

Richard Phelps, HR consulting partner at PwC, commented:

“People who work in financial services tend to be highly motivated and for some roles even a day’s unexpected leave can have a significant impact on results and reward. There simply isn’t the culture for absenteeism - come rain or shine, people get into work”.

The research highlights the impact workplace culture can have on absence. PwC’s data shows the public sector has the highest absence levels, averaging 12.2 days. Absenteeism is also a problem for retail and leisure, at 11.5 days.

Richard Phelps, HR consulting partner at PwC, said:

“While sometimes absence from work is unavoidable, once people see colleagues frequently taking unscheduled leave, absence becomes less of a dilemma and more of a right. Breaking the cycle can be hard. Retailers take a robust approach, with pay docked almost immediately. With retail resignation rates substantially higher than other sectors, some could argue this is hindering morale. But with a largely unskilled, often temporary staff base, boosting engagement is extremely difficult.”

PwC’s research comes at a time when the Government is conducting a major review of sickness absence. The independent review is focusing on combating long-term absence, which makes up 40% of the UK’s sickness rate according to PwC’s figures, and for which the State and the taxpayer stump up most of the costs.

Richard Phelps, HR consulting partner at PwC added:

“Short-term absence – which we classify as 5 days or less – can all too often spiral into long-term sick leave, and similar issues are often at play. The root cause is frequently a problem at work, so until this is treated you’re not going to get the person affected back in their job.”

PwC’s absence research is based on data gathered from 2,000 companies by its Saratoga team, the recognised leader in the measurement and benchmarking of human capital activity. A range of quantitative and qualitative tools are used to identify risk and o evidence best practice across an organisation.