Sick leave costing the economy $1.3 billion

Kiwi staff racked up more than 6 million sick days last year, costing New Zealand businesses and the economy more than $1 billion, a new report reveals. What can be done to combat the issue?

Sick leave costing the economy $1.3 billion
Employees taking sick leave doesn’t just impact on Kiwi businesses, it hurts the country’s economy, too, according to the first Wellness in the Workplace survey to be carried out in New Zealand.

Results from the survey showed an estimated 6.1 million days of work absences cost the economy around $1.3 billion last year.

The nationwide study of 97,000 staff provides a comprehensive assessment of where New Zealand stands regarding the connection between absenteeism, sickness, costs and related practices in the workplace, and organisations are being called on to address the issues raised.

“Now that the true cost of absenteeism has been quantified we have a broad indicator of the cost savings that could be achieved if employers can reduce the extent and duration of employee absences,” stated Peter Tynan, CEO of Southern Cross Health Society who co-sponsored the survey.

He added the results showed that employers need to identify what lies behind absences and “consider what other support it may be appropriate to offer their workers to improve attendance”.

For example, while illness and injury were the primary drivers for an absence, this was followed by taking time off to care for a family member.

“This sends a strong indication that employers don’t just need to think about the health of their employees, but also the health of their families,” Tynan stated.

The survey shows, however, that only a quarter of businesses state employee wellbeing is a top priority. But the report states making it a priority could prove beneficial to organisations.

“Given the recent difficult economic climate, it is perhaps no surprise that for many enterprises other priorities take precedence over employee wellbeing. But as the economy improves, New Zealand’s long-term problem of finding staff with the right skill sets will self-evidently increase,” it states. “Taking employee health and wellbeing seriously may help to entice new staff and discourage staff from leaving.”

Other key findings from the report include:

•The average rates of absence for 2012 was 4.5 days, at a typical cost of $837, amounting to around $1.3 billion across the economy.
•Average absence days in the public sector stood at 6.6, compared with 4.3 in the private sector. In addition, median costs per absent employee in the public sector averaged 110% more than in the private sector.
•Manual employees take an average of 5 days, compared to 3.5 days for non-manual workers.
•Absence levels are higher in the public sector (6.6 days) than in the private sector (4.3 days).
•Employers believe “sickies” account for five per cent (303,000 working days) of all working time lost at a cost of $283 million to the economy.

To view the full report click here.

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