Employee absence hits record-high in Kiwi businesses

Report finds workplace wellness is a priority for business, but increasingly comes at a higher cost

Employee absence hits record-high in Kiwi businesses

BusinessNZ and Southern Cross Health Insurance have unveiled the findings of their biennial Workplace Wellness Report and the data reveals that if you’ve observed a higher rate of absence in your workforce, you’re not imagining it.

The report found that the current rate of employee absence now stands at an average of 5.5 days per employee, equating to a total of 10 million working days lost annually.

This is the highest recorded since the survey began, with the next closest result 4.7 days in 2014 and 2018. The lowest recorded was 4.2 days in 2020.

“[It] shows businesses reporting a sharp spike in absences in 2022, because of Covid-19 and the resulting change in NZ’s sick leave regulations,” Kirk Hope CEO of BusinessNZ told HRD.

In 2021, New Zealand’s statutory sick leave provision was extended from five days to 10 days annually, however, this change has resulted in a substantial rise in costs.

“The cost to an employer for a typical employee’s absence in 2022 was $1,235 per employee, compared with under $1,000 per employee in previous years,” said Hope.

The report quantifies the amounts based on salary costs and replacement costs for absent individuals, such as temporary staff or overtime pay.

Employers step up despite cost

This survey provides for a deep understanding of what’s driving issues like workplace absence, the cost of absence, and what  employers can do to help people be as productive as possible, said Southern Cross Health Insurance CEO Nick Astwick, in a release.

Read more: Highest-paid health insurance CEOs ranked

“We all benefit when our people are physically and mentally healthy, and therefore fully engaged.”

The study indicates that organisations are actively prioritizing employee well-being with an uptick in businesses adopting workplace wellness programs, and 89 percent of surveyed organisations affirming their commitment to fostering a culture that encourages employees to stay home when unwell.

“Many NZ businesses continue to demonstrate a high degree of care and concern for staff, providing significant benefits and support, including access to the Employee Assistance Programme, flexible hours, working from home, wellbeing education, support for parents, and more,” said Hope.

Astwick agreed the strides businesses are making to look after employees in the workplace, and even beyond – in their homes and communities – are “impressive.”

“Some change has been legislated, for example increased sick leave, but the Workplace Wellness survey shows some business leaders are moving beyond the ‘rules’ and embedding good practice day to day,” he said.

Causes of employee stress

The survey identifies workload, long hours, and financial concerns as leading sources of employee stress.

“Both employees and employers are subject to stress stemming from financial concerns,” said Hope. “The report shows that this non-work-related source of stress has increased in recent surveys and is likely due to increased cost of living pressures experienced within the current inflationary, post-pandemic environment.”

But as businesses seek to balance operational, payroll and other costs, the data reflects a strong commitment from the business to continue to prioritise well-being as a key driver of sustainable success.

"Businesses are the backbone of the economy. They generate income, pay tax, drive innovation, and create opportunities for people to grow and sustain their whānau and communities, but they can't achieve any of this without supporting their people to be well,” said Astwood.

Despite the current rise in employee absence, Hope is hopeful for a subsequent drop in workplace absence in coming years “now that NZ has dropped the mandatory seven-day Covid isolation period and now that the pandemic is subsiding,” he said.

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