Absenteers impact profitability of 70% of SMEs


Absenteeism is having a big impact on profitability say UK SMEs, according to 71 per cent of firms questioned in a survey.

The research found that 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 of small business owners said 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 believe the use of such policies could reduce the rate by 11 per cent or more.

Whilst the vast majority of firms 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, half, 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 and family issues.

“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,” explained 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.”