A report released by the Small Firms Association (SFA) in Ireland has found that small businesses lost 3.9 million days in 2009 due to employee absenteeism, costing them up to €563m (AU$800m).
Avine McNally, Acting Director of the SFA said the research showed some marked differences across sectors and regions, with employees in smaller firms less likely to miss work than their counterparts in larger enterprises.
The national average for absenteeism is 8 working days but this rises to 10 working days when considering companies with more than 50 employees. For small firms, the average actually falls to 2.6pc or 5 working days.
In monetary terms, based on average earnings of €143 per day (AU$203) absenteeism costs small businesses with sick pay schemes an estimated €563m ($AU800m) per annum.
However, this does not take other costs such as the requirement to replace absent staff with other workers or overtime payments into account. If the indirect costs such as the effect on productivity and quality, the increased work pressure on other colleagues and the administration time in managing absence were all considered, the actual overall cost could be closer to €900m (AU$1.3b), commented McNally.
According to the report, stress was cited as one of the primary reasons for absenteeism. Stress can not only lead to lost days, but also a less productive workforce, faulty decision-making, and ultimately the possibility of legal action being taken against the company for negligence or constructive dismissal, she added.
Similarly, a recent study by VicHealth and Melbourne University found that depression resulting from job stress costs the Australian economy an estimated $730 million every year.
McNally concluded that, “employers should be aware that there are a wide range of factors that can influence employees’ attendance patterns and levels. These include good communication, training and development, working conditions, job design, team working and the creation and fostering of a culture and organisational morale, which encourages and recognises excellent attendance."
"Promoting employee health and welfare, tackling the issues surrounding stress in the workplace and management training for handling absenteeism, should assist in reducing absenteeism.”
Read the full press release from the SFA here.
Jamie Fitzsimons, Marketing Manager for Mitrefinch Australia advises, "Organisations need to have an effective means of measuring staff absence in place, enabling them to assess the extent of the issue and decide the best means of tackling the problem.”
The Bradford Factor is a widely-used formula for measuring an employee’s irregularity of attendance and the effects of absenteeism on a company. The formula draws on the assumption that regular, short spells of absence can cause more disruption to a business and result in higher costs than fewer, but longer spells of absence.
Mitrefinch’s Employee Time Management System (TMS) is built around The Bradford Factor, allowing employers to profile their staff by absence tracking. It measures how the work absences of individual employees are impacting your business - by recording the number of absences and the duration of each incidence and providing a ‘score’ for each employee. With this information readily and quickly available, management can deal with problem areas before they do any more damage to the organisation’s bottom line.
For more information on the Bradford Factor and how Mitrefinch’s Employee Time Management System (TMS) can assist with effective Absence Management contact Mitrefinch Sales on 1300 884 831 or visit us online.
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