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What’s the cost of staff absence?

13 Sep 2017
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In association with Westfield Health

The amount of staff absence and the impact it has on productivity for businesses is regularly researched and reported in the business press. CIPD’s 2016 Absence Management Survey Report stated that the average level of employee absence across all sectors was 6.3 days per employee, with manual workers taking 2.1 more days on average than non-manual workers.

They also report that the median annual cost of absence per employee is £522, although there is considerable variation both within and between sectors. In the public sector, where absence rates are highest, the median annual cost of absence in £835 per employee.

Median figures are all well and good, but what does that mean to you? Absence rates vary significantly between industries and the overall impact will depend on your number of employees.

Using Westfield Health’s tool, you can calculate the total cost of absence to your company. The more information you have to hand, the more accurate your answer will be. If you don’t have the data available, the calculator will use industry averages to work out the result.

The tool will also work out the potential savings that could be achieved through reducing your absence. With this in mind, employers need a clear plan for how their absence reduction is going to be achieved.

The introduction of a strategy which focuses on improving employee health and wellbeing along with a few simple initiatives can help employers to take a preventative approach to these issues. In time, this strategy can deliver significant benefits including reduced absenteeism, greater productivity and improved staff morale, engagement and retention.

Developing the most effective strategy for your workforce can be daunting. And, if successful, it can be a challenge to implement and evaluate your strategy effectively.

So having access to a support system to help you choose, implement and evaluate a health and wellbeing strategy could make a real difference. This can be achieved by following a five step process.

Step one - formulating your health and wellbeing strategy: Consider your corporate goals, your current health and wellbeing issues and objectives, and your statutory obligations. Identify possible solutions for your workforce that will help you develop your plan.

Step two – winning the business case: It’s crucial to develop a business case that outlines the purpose of your health and wellbeing strategy, the resources required to deliver your plan and the results you hope to achieve.

Step three – choosing your supplier(s): With so many different suppliers on the market there’s a lot to consider when choosing who to work with. Use a checklist of points to consider when searching for your preferred health and wellbeing provider.

Step four – staff engagement: A great employee wellbeing strategy needs to be effectively communicated if it’s to succeed. Employee engagement will ultimately help you to achieve your health and wellbeing objectives.

Step five – measuring performance: You need to be able to evaluate ROI in order to assess the impact of your strategy, whether your measurement of success relates to financial impact or the overall wellbeing of your employees.

A number of resources, to help companies through the process and provide comprehensive guidance, are available to IoD members by viewing the Health and Wellbeing toolkit documents on iod.com/healthplan.

IoD members can access exclusive health cash plans and health related benefits from Westfield Health, the IoD’s preferred providers of Health Cash Plans.

0114 250 2385

Westfield Health

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The views expressed in blogs such as the above are those of the author and do not represent the views of the Institute of Directors.

Fiona Lowe

Fiona Lowe is Director of HR at Westfield Health, a not-for-profit provider of health and wellbeing services to companies and consumers. Since 1919, we’ve been helping hard working people stay at their fit and health best and now have over 400,000 policyholders. As a fellow of the CIPD Fiona has worked in the field of HR for 20 years and has a good working knowledge of proactive and successful absence management. 

Over the last ten years Fiona has worked with Senior Leadership teams to develop and implement the corporate strategy and deliver the people strategy. In August 2013 a key highlight was supporting the business to achieve Investors in People Gold. This was achieved through a sustained programme of continuous improvement in all areas of people management and development, and embedding the company values throughout the people plan.

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