Absenteeism costing UK business £32 billion a year, says PWC

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.”

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PwC’s analysis suggests more flexible labour laws for employers 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.

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.”