Revealed: The true cost of employee sick leave

Everyone gets sick; it’s a fact of life. Employers want to be sympathetic when staff members aren’t well enough to work and give them the opportunity to rest and recover. But a supportive approach can’t negate the cost of employee sick leave to your business.

Industry research has found that employers spend the equivalent of 2-16% of their team’s salaries on staff absences each year. This cost is especially significant during the winter months, when absence rates are typically higher; according to WhosOff data, staff sick leave peaks in January.

Is there anything your company can do to limit the financial impact of sick leave? WhosOffice has some ideas:

Create a formal sick leave policy

Effectively managing sick leave starts with helping your workforce to understand when they should and shouldn’t be working. Without a sick leave policy, you may find team members take off more time than they need – or even come into work when they should be recovering.

Formalising your sick leave policy can help your business to manage absences flexibly, depending on the issue. For example, if someone is well enough to work but their health condition means they can’t easily travel to your office, your sick leave policy can permit them to work from home. This approach is helpful when managing injuries or mobility issues, allergies, minor contagious illnesses such as colds, chronic illnesses, and later-stage recovery from serious conditions or medical procedures.

However, it’s also worth outlining when staff should NOT come into work – for example, within 48 hours of vomiting. This avoids an employee feeling fine but then passing an illness to multiple team members, causing a much bigger staffing shortage.

Deep dive: should companies be encouraging staff to call in sick more often?

Be clear about sick pay entitlement

Often, employees come into work when they’re unwell because they’re worried about the financial impact of calling in sick. You can avoid this by sharing your policy for how staff absences impact their salary.

Legally, UK employees are entitled to Statutory Sick Pay in certain circumstances. However, many companies choose to offer additional entitlements – such as up to five days off sick per calendar year on full pay.

While it may seem counterproductive to offer increased sick pay entitlement when you’re trying to reduce the cost of staff absences, being a supportive employer has beneficial advantages. If an employee is able to take 2-3 days off, it prevents them trying to “push through” their illness and ultimately having to take more time off for a worsening condition. Also, a culture of trust makes people more loyal to your business, reducing costs in other areas such as staff recruitment.

Establish set processes for calling in sick

If a member of your workforce is genuinely too ill to do their job (even from home), you need to know about their absence as soon as possible.

Most firms have a procedure for reporting absences – for example, contacting line managers or HR by telephone or email. However, many companies don’t have a follow-on process for ensuring all colleagues and customers or clients are made aware of someone’s absence.

It’s critical that your business understands the full impact of sick leave as quickly as possible, to create workarounds. For instance, if the person off sick was due to have meetings that day, those meetings need to be rearranged. Equally, if a colleague was waiting for them to approve a piece of work, they can consult another team member and keep that work progressing.

A poorly member of staff won’t always remember to turn their out of office on, which means their inbox may still be filling up with requests from people expecting a reply. The sooner people know about an absence, the quicker they can adapt their plan accordingly.

Find ways to fill staffing gaps quickly

Some jobs have enough flexibility to manage short absence periods without too much impact. But your personnel may be pivotal to operational functionality – so when they go off sick, their department can’t function properly. In sectors such as education, healthcare, and transport and logistics, alternative staffing arrangements are a priority for successfully managing sick leave.

Many companies have found the quickest way to fill staffing gaps is to invest in people management software with an HR module, so events like employee sickness can be centrally recorded.

By integrating HR and employee scheduling, you can see the exact impact of someone’s absence on your shift plan. More importantly, you can send an open shift opportunity alert to all relevant staff members who aren’t working that day – so a colleague can step in and pick up their workload.

Review absence rates to identify concerning patterns

While unplanned absence rates are low amongst most employees, there may be one or two professionals within your organisation that take significantly more time off sick. To manage the impact of extended illness on your business, your team needs to understand what’s happening and why.

There’s usually a good reason why people are taking long periods of sick leave. Chronic mental and physical health conditions, serious illnesses and major injuries can all impact someone’s ability to work.

Read more: supporting employees with mental health conditions

Keeping track of people’s progress and recovery will help you to support their recovery. For example, if someone is unlikely to be in for the next month, you can arrange temporary cover to maintain productivity in their absence. Online software also enables you to document essential information such as employee fit notes.

Occasionally, staff members abuse the system and “throw a sickie” on a regular basis. Tracking unplanned absences using people management software will provide the evidence you need to follow up with that employee, so you can pursue disciplinary action if needed.

Keep a close eye on staff sickness with WhosOffice

As we’ve already mentioned, integrating staff sick leave with other operational data can help your company to assess and manage the impact of last-minute absences.

WhosOffice shift planning software includes employee leave and HR features, so you can log sick days alongside your staff schedule and ensure all unplanned absences are fully documented.

Start your free WhosOffice trial to track staff absences and reduce their impact on employee productivity.