Absenteeism costs industry pounds 13bn a year

Low morale, boredom and stress are behind an alarming rise in absenteeism, which is now costing British industry a massive pounds 13bn a year in wasted salary bills alone. Taking into account the hidden costs of lower productivity and loss of customers, the hit to business is even higher, according to the Industrial Society.

Public sector and voluntary organisations have seen absence rates rise 25 per cent since the last Industrial Society survey in 1994, suggesting workers are taking on average one day in 20 as sick leave.

The organisation's latest research into the problem published today arrives at its pounds 13bn base figure by assuming that the average employee is paid just over pounds 70 a day and is absent for 8.26 days a year. Accordingly, it covers just wasted salary bills and does not include falls in productivity, the cost of employing temporary staff, overtime bills, damage to the morale of colleagues and loss of customers.

The survey of personnel and human resources managers at 327 businesses and other organisations also reveals what the society calls "a strong discrepancy" between what employees say is the reason for their absence and what managers think is the true cause. Low morale, boredom and the "Monday morning blues" are among the hidden problems, and the society notes that managers may be behind many of them.

About 46 six per cent of employers are not measuring the cost of absenteeism, and even some of those who are trying to do something about it do not seem to be going about it in the right way. Organisations with attendance bonuses have higher absence rates, particularly if they employ manual staff.

By contrast, employers who accommodate working from home, flexible hours and flexible annual leave enjoy lower-than-average absence rates.

Tony Morgan, chief executive of the Industrial Society, said the scale of the problem was clear when the hidden costs were taken into account. "Organisations should be monitoring absence rates carefully, identifying the true costs and causes, and looking for solutions. Employees need to know that absence is taken seriously and that employers want to help."

He added that managers should be trying to create a culture of trust at work so that such matters as stress and family responsibilities could be discussed openly.

He also called for greater use of flexible working practices as a way of combating the problem. "With the growing number of women in the workforce, and our ageing population, the issue of caring responsibilities can only grow in importance."