Costing Sickness Absence in the UK

Despite growing concern over sickness absence, organisations appear fundamentally ill equipped to form a comprehensive view of their absence costs.

The most usual method of estimation uses only the basic salary of the absent employee, and neglects other significant aspects such as salary oncosts, overtime, payments to replacement workers, and all management costs from both line management or HR functions. This applies even to 'leading edge' UK employers who have the most sophisticated information systems.

The study suggests that between 2 and 16 per cent of annual salary bills may be spent by employers on absence. Here are nine case studies, with a methodology for establishing the true costs of sickness absence, notes on managing the costs of absence, and a comprehensive bibliography of the literature.