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Advantages of Absence Management for Employers

By: J.A.J Aaronson - Updated: 23 Nov 2010 | comments*Discuss
Management Employees Advantage Benefit

Absence management is an important task for any employer. Clearly there are many reasons for employee absence; the list of potential ailments that may cause employees to miss work is almost as long as the list of individuals of working age in the UK. In the vast majority of cases, employees' absence is perfectly justifiable.

People get ill, and businesses must bear the cost of this to some extent. However, it is possible to mitigate the risks posed to your business by excessive absenteeism – and, indeed, it is possible to develop management strategies that will help you to cope with standard levels of absence, regardless of the size of your business.

Financial Advantages

When looking at the advantages of absence management for employers, it is important to first look at the costs associated with absenteeism. It is relatively easy to quantify the basic financial cost suffered by businesses across the UK; although the exact figure differs on a sector by sector basis, it is estimated that the total cost of absence to the UK economy is somewhere in the region of £12 billion per year.

Figures of this size can seem unrelated to the concerns of the average small business, but the costs to these organisations are very real. Most companies, particularly those which operate on a smaller scale, do not keep accurate records of staff absence.

Management of this problem is impossible without analysis of figures for your business, but on a general basis it is estimated that employee absence can cost employers up to around 16% of their annual payroll budget. As such, an effective management strategy that cuts absence by even one third, will benefit the company massively; this reduction in sick days can free up more than 5% of your payroll budget.

If you employ 10 people at an average of £20,000, this is equivalent to over £11,000 once National Insurance Contributions have been taken into account. Clearly, £11,000 is a significant reduction in expenditure for a company of this size, and this reduction is easy to achieve through effective management.

Indirect Benefit

It should be noted that the costs of absence are not always direct, and not always solely financial. As such, the benefits and advantages of absence management stretch well beyond the financial realm and into those of productivity and morale. When employees are not at work, the motivation and productivity of the workforce as a whole can suffer.

Again, these effects are all the more pronounced in small organisations. This is particularly true in cases where those who are absent are in managerial or supervisory positions; not only does confusion frequently ensue, but employees who report to the absent individual can frequently feel as if there is little reason for them to work as hard as they could.

In turn, these factors can reduce productivity and morale in a self-perpetuating cycle.

As can be seen, the advantages of absence management for employers are manifold, both for the financial health and the culture and atmosphere of the organisation. As such, you should ensure that absence management is a central plank of your Human Resources strategy.

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