What is the Issue?
In May 2018, the CIPD[1] conducted their annual health and well-being survey. They suggest that a mean figure of employee absence for a small and medium company (SME) currently stands at 6.6[2] days per employee per financial year (see Figure 1). This figure has remained consistent since 2010 and shows no real or immediate signs of improvement. The cost of absence was estimated to range from £554-£1050 per person per year. Thus, for example, if an SME employees the maximum under the definition, 250 employees, the cost to the company exceeding £138.5K - £262.5K per financial year5
[1] CIPD (2018) Health and Well-being at work Survey Report.
[2] This figure does vary depending on industry, the highest being public sector, local government and health. 5 £250K is reported by GLA Economics: London’s Business Case for employee health and well-being.
Absence Costs
The cost to a company for absence is not simply the financial cost highlighted, although direct cost is the easiest to measure i.e. decreases in employee absence metrics are proportional to increased savings and productivity. Only 8% of companies are said to make this connection and therefore measure this. Absence affects employees in other ways too, I suggest that there is a strong connection.
- Lowers morale – cover for absent colleagues provides increases to workloads. If an employee becomes aware that ‘pulling a sickie’ has happened – watch morale tumble. If the absence is stress related, this stress is felt by those remaining at work.
- Leads to mistakes and accidents – it would stand to reason that increased workloads and higher numbers of priorities lead to mistakes, this in turn leads to reduction in stakeholder trust, increasing stress and compounding the presenting issue. Wellness programs can address health and Safety concerns in the workplace.
- Damages productivity – projects, deadlines and deliverables suffer.
Future Trends
In the future, companies are looking more likely to have to increase their spending on employee well-being programs as workplace stress increases. For those companies that have increased spend and have provided wellness programs, they see return on their investment in terms of:
- Reduced absences
- Reduction in staff turnover
- Reduced accidents and injuries
- Increases in employee satisfaction
- Reductions in recruitment costs Increases in productivity
There is evidence through case studies that suggests return on investment can range anywhere from £2-34 for every £1 spent[1], a return realized in year 2/[2] from the active date of the introduction of wellness and well-being programs.
[1] Healthy Work – Evidence into Action 2010 page 46 Figure 9.
[2] October 2018
