Dealing with staff absences and sick leave in SMEs
Is absenteeism impacting your bottom line? If so, you are not alone. Sick leave costs small companies around £3,500 a year, while larger SMEs are looking at a hefty £40,500 per annum on average.
These figures come from a study conducted by AXA PPP healthcare, which showed that micro-businesses are in fact much better at dealing with sickness absences than larger organisations. Smaller companies have an average of 5.2 employee sick days a year, but for organisations employing between 100 and 250 staff, this number rises to 6.8 days.
The cost of staff illnesses
At the very least, short term staff absences will likely lead to reduced output, loss of productivity and lost sales. However, where a long-term absence is involved, the costs are much higher. This is because many companies operate sick pay policies where they provide full pay to the absentee for a set number of weeks, followed by a period of half pay.
Add to this replacement staff salaries, as well as recruitment and training cost for replacement workers, it becomes clear just how crippling sickness absences can be for all businesses.
In fact, given small businesses usually have little working capital on hand, it isn’t uncommon to find that these unexpected costs result in finance gaps which need to be addressed through cash loans (like those provided by the well known Wonga brand if you click the link.) Although high street banks offer different types of cash loans, many find it hard to access credit from banks and turn to alternative lenders instead.
The benefits of a tighter-knit group
So, what can larger SMEs learn from their smaller counterparts to improve sickness absences? According to AXA PPP healthcare, smaller companies benefit from having a tighter-knit group. There is more trust and better communication between bosses and employees in these organisations.
Trust issues are more likely in larger firms, with 60 per cent of employers sceptical about the wellbeing of their absent staff. More than one in three even confesses to checking social media platforms to snoop on those who are off work sick.
Such moves can create an unhealthy work environment, leaving employees who are actually ill feeling nervous to take a day off work. A continuing lack of trust between bosses and workers can also lead to stress, which ultimately results in higher absenteeism.
Establishing a fair and consistent sick leave policy
To deal with the issue of sickness absence, SMEs need to establish a fair and consistent illness policy which complies with the laws that deal with health and safety, disability and general employment legislation. Even if you are fed up and would like to discipline or dismiss an employee for ill-health reasons, bear in mind that you may have responsibilities under employment law to explore alternative solutions.
All businesses, regardless of size, have legal rights and obligations when it comes to dealing with staff absences. To help SMEs understand what these are, the public body Health and Safety Executive (HSE) has published a guidance note on managing sickness absence and return to work for small businesses.
This note also contains practical information on what you can do as an employer during your employee’s absence.