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Wednesday, February 8, 2023
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Telford-based HR specialist says good absence management is good for bottom line as well as staff

Many of us don’t appreciate the true cost of staff absences, but good absence management can seriously help your bottom line – and your staff.

Alasdair Hobbs
Alasdair Hobbs

That’s the message from Shropshire-based employment solicitor, Alasdair Hobbs, who says some number-crunching really opens people’s eyes to how much employee absence can cost a company.

Mr Hobbs, who runs HR advisors, Human Results, in Telford, said: “We work with a wide range of businesses in Shropshire and further afield, helping them improve their absence management.

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“Many of our clients are surprised when they work out how much absenteeism is costing their business – it can be a significant hidden cost.

“For example, a company employing 100 staff, with an annual turnover of £5,000,000 and a profit of around £3,000,000 would be making £30,000 profit per employee.

“An absence rate of eight days per person, per year, would require the hiring of four people just to cover these absences, plus the extra costs of further cover requirements, along with the possibility of paying existing staff overtime or using interim staff.

“The cost could range from £110,400 to £276,000. But a reduction of absent days from eight days to seven, per person, would save £22,000 – nearly enough to pay one person’s salary, for an entire year.”

Mr Hobbs said it was vital for firms to invest in training to ensure managers could deal effectively with both short-term and long-term absence.

“Studies have shown that after a couple of weeks’ absence, one out of five employees will stay off work for an indefinite amount of time, or they will leave their job eventually,” he added.

“If businesses want to mitigate some of this risk, it is essential to determine the extent of sickness and what kind of support is required.

“Managing absence over a long period of time can be a challenge and managers often need to have a high level of skill, understanding and capacity when it comes to implementing HR policies.

“This is especially the case in more delicate circumstances. Even with the best possible intentions, a manager may not have the interpersonal skills to handle the complexities that are associated with absence over the long term.”

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