Warehouse Management Systems - United Kingdom Warehousing ...

32 Absenteeism
The cost of absenteeism is a serious hindrance to higher
profits for many organisations. Richard Colver of Willis
Employee Benefits Limited discusses its implications and how
controlling absenteeism could help your organisation
Health
scares
The incidence of absenteeism is a real
cause for concern for many organisations.
The cost to industry averages out
at £659 per employee per year up from
£598 in 2006. This equates to 8.4 working
days lost per employee per year a figure
which then rises the more staff you have.
(2007 CIPD survey on Absence
Management)
The situation is probably worse than this as
the cost of £659 per employee is primarily made
up of Occupational Sick Pay and Statutory Sick
Pay. Less than half of the organisations responding
to the CIPD survey included any element of
cost for overtime, replacement labour, lost
orders etc.
If all indirect costs are added in, market
commentators and indeed the Unions suggest
that the actual cost to the business
could be up to three times this figure. The
true cost of absenteeism places a serious
burden on productivity, profitability and staff
engagement and retention.
What does this mean to me
Let’s put this into context. You are a 500
employee company with a wage roll of
£7,000,000 and an average salary of
£14,000 per annum.
Based on a working year of 240 days
and the absence rate discussed above the
cost to your business is 4,680 days productivity
lost at a cost to the business
of £273,000 purely in terms of sick
pay. This is before we add in the indirect
labour costs, loss of profit, loss of
productivity, employers liability claims
etc.
The Traditional Response
The traditional organisational response to
absenteeism has been through a framework
of insurances, facilities, providers and
departments that have evolved over the
years to take into account each new set of
rules or demands.
Consider a work related accident leading
to a back injury or a stress anxiety problem.
How many of the bodies listed below will
become involved in the issue
• Occupational Health
• Personal Accident/Disability
• Employers Liability
• Group Income Protection
• Employee Assistance Programme
• Human Resource Dept.
• Private Medial Insurance
• National Health Service
• General Practitioner
• Health and Safety Dept.
• Group Life Assurance
• Group Critical Illness
• Ill Health Early Retirement
• Legal Dept.
January 2009
www.ukwa.org.uk April 2008