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Gap between public and private sector absence rates hits new high

Absence from work cost the UK economy 13.2 billion last year as the average employee took almost seven (6.7) days off sick, while the gulf between absence rates in the public sector and the private sector grew to a record level, new research revealed today (Wednesday).

The latest CBI / AXA Absence Survey showed that average absence levels across the public sector stood at nine days, which is 55% higher than the 5.8 day average of the private sector. The private sector improved its absence levels over 2007, while the public sector stood still. 1.4bn of taxpayers' money could be saved if public sector organisations matched the private sector average.

The survey also revealed that of the 172 million days lost to absence in 2007, more than one in ten (12%) are thought to be non-genuine. These 21 million "sickies" cost the economy 1.6bn and two-thirds (65%) of employers think that some staff are using them to extend weekends. 60% said that fake sickness was used to extend holiday, and a third of employers (34%) suspect that sickies are used for special events like birthdays and major football games.

Long-term absence (20 days or more) also continued to be a serious concern for firms. Although only 5% of absence spells became long-term, they accounted for a massive 40% of all time lost, costing 5.3bn. Long-term absence accounted for half (50%) of all time lost in the public sector, but under a third (31%) in the private sector.

Susan Anderson, CBI Director of HR Policy, said:

"Everyone agrees that sick people need time off work. But employers face two serious and expensive challenges - dealing with bogus sick days, and helping those with long-term illness return to work when they are fit to do so.

"People who awarded themselves sickies to enjoy the recent sunny weather or to extend a weekend away are acting unfairly, leaving their colleagues to pick up their work, and costing taxpayers and employers over a billion pounds a year.

"Those with long-term illnesses need time to recover - nobody expects anyone to be at the office checking their emails the day after a heart bypass. But in many cases, like those involving stress or back pain, firms that keep in touch with employees and offer flexible working have been successful at reducing long-term absence levels.

"A fresh, proactive approach to managing long-term absence could help stem the flow onto incapacity benefit - which currently costs 12.5bn a year for 2.5m people - and help employers to retain skilled employees, many of whom will find that work can improve their health and outlook.

"But we really have to question if there is a medical explanation for the higher levels of long-term absence in the public sector. Low morale, poor management and a culture of absence are at least partly to blame."

Absence levels varied greatly across organisations, and there were 9.3 days of difference between the best and worst performers. The survey showed that, while a certain level of absence is both acceptable and inevitable, absence can be managed and reduced through a mixture of 'carrot and stick' policies, like offering medical insurance, health support or flexible working, whilst also having formal absence management processes, such as not paying sick pay for the first three days of absence.

In 2007 the average direct cost of absence was 517 per employee - or 3.1% of payroll - which includes lost production and the expense of covering absence with temporary staff or overtime. The CBI also estimates that indirect costs, such as lower customer satisfaction, add another 263 per employee per year. When these indirect costs are added to the direct cost, the UK lost 19.9bn to absence in 2007.

The absence gap between manual and non-manual workers continued to narrow, with averages of 7.6 days and 6.1 days respectively. Sectors with the highest rates included the public sector (9 days) and utilities (7.6 days), while IT, professional services, and hotels, restaurants and tourism recorded the lowest with 4.5, 4.2, and 4 days respectively.

In the public sector, the highest absence rates were found in health/social care services (12.6 days) and police & probation services (9.9 days), while education saw lower overall levels (7.5 days). Some suggest that higher public sector absence can be explained by organisation size or the prevalence of manual staff, but figures in the CBI / AXA survey show this is untrue. There were individual examples of superb performance across different types of public sector organisations, which suggests that the right policies can make a difference.

Organisations that recognised trade unions saw three days more absence than in non-unionised workplaces - 8.1 days against 5.1 days. This correlation between higher absence and unions is found regardless of organisational size, or whether employees were engaged in manual labour.

There were strong regional differences in absence levels across the UK. The North West and Yorkshire & Humberside lost the most days in 2007 (8.9 days each), followed by Wales (7.6), West Midlands (7.5), South East (7.4), South West (7.2), Scotland (6.8), Eastern (6.7), East Midlands (6.6) and Northern England (6.5). The regions with the lowest levels were Southern England (5.6), Northern Ireland (5.7) and Greater London (5.9).

Dudley Lusted, head of corporate healthcare development at AXA PPP, said:

"Short-term absence shouldn’t be an issue for employers who have a positive workplace culture where people are treated fairly and believe they have a future.

"Long-term absence – which is mainly due to stress, anxiety and depression and to back pain and other musculoskeletal disorders – is still a big problem, accounting for forty per cent of lost working time.

"The NHS, which continues to struggle to deal with people suffering from these conditions, is partly to blame, but arguably the bigger culprit is ineffectual management that lets people drift rather than helping them to get better.

"It’s ludicrous to pay people not to work when the tools to deal effectively with these debilitating conditions, through early intervention and treatment, are so well established and readily to hand; it’s no accident that employers who provide access to this have lower absence rates than those who don’t."

Minor ailments, such as colds, were named as the most significant cause of short-term absence, while back pain came second. Non-work-related stress, anxiety and depression was the most significant cause of long-term absence among non-manual staff.

Illness was easily the most common reason for absence, but over half of employers said staff taking time off to deal with home and family responsibilities was a cause of absence. A third of employers said staff took time off to wait for medical appointments, which highlights the need to make GP opening hours more flexible.

Indeed, asked what three steps the government could take to help employers reduce absence, 56% of respondents also asked for more flexible GP hours and 60% wanted a better partnership between GPs and occupational health professionals. More than two-thirds of employers want them to prioritise the introduction of capability-focused medical certificates. “Fit notes”, as some have dubbed them, would help an employer understand what duties an employee can perform, helping them to make arrangements where possible for an earlier or phased return to work.

More than two thirds of organisations (69%) said they have a well-being policy, which encourages staff to lead healthier, happier lives. 70% felt that 'praise for a job well done' is the most important factor in raising staff morale. However, while 68% of private employers believe morale is good or satisfactory in their organisations, only 54% of public employers agreed.

14 May, 2008

Notes to Editors:

1. The annual absence and labour turnover survey has been conducted since 1987. This year's survey was conducted between January and February 2008. Respondents were asked to report on absence and labour turnover for 2007. Responses were received from 503 private sector companies and public sector organisations who together employ more than one million employees - equivalent to 3.6 per cent of the UK workforce.

2. If you are a journalist and wish to obtain a copy of the report, please contact the CBI Press Office on 020 7395 8090 or email paul.platt@cbi.org.uk. Non media should contact Robert Don by emailing robert.don@cbi.org.uk.

3. The CBI-AXA Absence Management Conference 2008 is being held at the Inmarsat Conference Centre, London, on Wednesday May 14. Media wishing to attend the CBI-AXA Conference should visit http://www.neilstewartassociates.com/bn122/

4. The CBI is the UK's leading business organisation, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. No other UK organisation represents as many major employers, small and medium-size firms or companies in the manufacturing or service sectors.

5. AXA is a world leader in financial protection. Its UK healthcare arm, AXA PPP healthcare, is one of Britain's leading medical insurers and today helps employers to develop and introduce strategies to manage workplace health and wellbeing through health audits, health screening and workplace health surveillance, medical and dental cover (in conjunction with its sister company, Denplan), and occupational health, attendance management and employee support services. For more information please visit www.axappphealthcare.co.uk. Contact: press office 01892 505 230.

Media Contact:

CBI Press Office on 020 7395 8090, or out-of-hours pager, 07623 977 854.

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