Absenteeism impacts SME profits and productivity

The majority of the nation’s small businesses have lamented high absenteeism rates, claiming that it is influencing both their profits and their productivity.

Seven in ten firms reported that absenteeism was having a significant impact on their business, according to the research from HR and payroll firm Moorepay.

Whereas Office for National Statistics figures state that the average number of sick days for an employee is 4.3 days per year, nearly half of the small business owners questioned reported that staff take more than five days off annually.

For 14% of firms, that figure increased to seven days or more and in situations where key staff were absent, the impact on productivity was even greater.

The study also found that few firms are actively taking steps to address the issue, although nearly three quarters of staff believe that offering policies for flexible working, time off for family and other policies on absence would have a positive impact – potentially reducing absenteeism by up to 11%.

Nine in ten firms said they track absence yet around 40% said they use paper or spreadsheets to do so, meaning the process is open to human error.

Sick days and annual leave were monitored by 75% and 66% of firms respectively, but other reasons for absence were not tracked as well.

Nearly half of businesses said they did not offer flexibility surrounding medical appointments while 53% reported a similar situation regarding dealing with family issues.

Research from earlier this year suggested that staff sick days could cost the economy around £900 million, while the National Institute of Healthcare Excellence estimates that absenteeism in all forms costs upwards of £15 billion annually.

Despite this, many SMEs lack the ability to accurately assess how staff absence is impacting on their business given a lack of complete data.

While absenteeism occurs in every business for a range of reasons, it can have a profound impact on small firms, especially if means senior personnel are unavailable for work.

Where long-term unexpected absences are concerned, business finances can take a hit through reduced productivity and sales – however there are a range of alternative finance options that can provide a solution.

This can provide much-needed assistance with short-term cash flow issues and any other problems a business may be facing.


By Phil Smith


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