Sickies Costing Businesses $33 Billion - Report

Australian employees are taking almost 10 sick days per year, costing businesses a record $33 billion in payroll costs and lost productivity, a new survey has found.

The 2014 Absence Management Survey, produced by Direct Health Solutions, a firm that specialises in reducing workplace absenteeism, found that employee absenteeism had risen to seven per cent, the highest level since 2010.

The survey researched absenteeism levels across 103 medium and large sized employers across Australia, in the public and private sector, and found that employees are taking on average 9.5 days of sick leave per annum.

“Following 3 years of declining absence levels, this year the survey reveals absenteeism levels  jumped from 8.9 days to 9.5 days per employee per annum” Managing Director of Direct Health Solutions, Paul Dundon, said.

Dundon said the research found the  cost of absenteeism has also risen to over $3,230 per employee per annum. The true cost of absenteeism to Australian business is over $33 billion per annum, or around eight per cent of payroll. The average cost of absence per day rose to $340, up from $308 in 2013. The median cost per day was $350.

Absence levels were highest in Travel, Tourism and Hospitality (11.9 days). According to Dundon, absence levels are high in the travel and hospitality sector due to the high level of casual and part-time labour. Transport and Logistics workers took on average 11.6 days per annum, and Telecommunications and Utilities workers took 10 days.

Absenteeism is costing the Public Sector over $6 billion per annum, as absenteeism levels rose from 9.3 days to 9.7 days.

“The reality is, absenteeism levels in the public sector seem to get higher each year, and this is supported by the Federal Government's’ own reporting released in October,” Dundon said.

“It is clear that private sector help is required, and closer engagement with unions is necessary to achieve improvements.”

According to Dundon, absenteeism levels are understated and incorrectly recorded in over 50 per cent of organizations, at least.

“When we reviewed the survey data, we found more than half of respondents were under-reporting their absence levels. In many cases, employee data was understated by half, so we had to clear that up with respondents,” he said.

To ensure employers understood the impact and cost of absenteeism to their business, companies need accurate recording and measurement systems in place, according to Dundon.

“When a person is absent from work, the impacts are much wider than the financial cost alone – it significantly impacts customer service, sales, staff engagement and their wellbeing. The extra workload created by absenteeism falls on staff, resulting in higher stress levels, poor health outcomes, and greater absenteeism – it is a vicious circle,” he said.

Dundon said it appeared that the “sickie culture” was alive and well – over 70 per cent of respondents indicated that absenteeism is caused by an entitlement mentality.

The research found that absenteeism was two days higher among respondents who strongly agreed that they had an entitlement culture in their organization.

“Entitlement mentality is a complex issue, however part of the reason we have an entitlement culture in Australia is the fear management have in managing sick leave – it is seen more as an entitlement to take, rather than a safety net provision when one has an unexpected family emergency or personal illness,” Dundon said.

“Many employers report that people taking a sick day a month were a major issue they were facing, and this was the most disruptive and difficult to manage.”