Healthy workplace, healthy business
A recent study by the Federation of Small Businesses (FSB) suggests that small employers lose around £3,000 each year through employee sickness absence.
With other business costs currently surging, this is money that most small businesses can ill afford to lose, but it’s a number that is really brought home when you consider what it takes to cover the cost.
For example, a business with an 11% net profit margin would need to generate £27,000 in additional sales just to pay for its annual sickness absence bill.
And absence is not the only cost.
There are other ‘hidden’ costs that many businesses do not properly measure, understand or even know exist and, therefore do little, or nothing, to address.
Sickness absence is clearly visible and relatively easy to understand and quantify. Outcomes, such as reduced effectiveness or productivity at work, or increased staff turnover are more opaque but equally real.
The hidden costs
Research indicates that the total cost of sickness in the UK is £29 billion each year with workplace stress alone costing the UK economy around £3.7 billion annually.
Furthermore, it’s estimated that 15 million workdays are lost to poor mental health and a further 28.2 million are lost due to musculoskeletal conditions.
Presenteeism and Leaveism
As ‘presenteeism’ is a term that many small business owners may not be familiar with, they may be unaware of the impact that it has on their business.
Put simply, presenteeism is a situation when an employee comes to work when they probably shouldn’t be due to ill health. This means they are not working anywhere close to their full potential, are not as productive as expected and are likely to be making more mistakes.
According to the organisation Work in Mind, presenteeism typically costs UK businesses twice as much as absenteeism. Based on FSB figures, this means as much as £6,000 each year, on top of the £3,000 they can ‘see’ as sickness absence.
Presenteeism is joined by another largely ignored phenomenon of ‘leaveism’. This is where employees are devoting time outside of their contracted hours (e.g., annual leave, after work) to complete work assignments.
It also covers employees choosing to take holiday days rather than call in sick.
Whilst difficult to identify and measure, it is recognised as a major factor in employees electing to seek alternative employment and all the associated costs of replacing an employee.
The numbers vary depending on the research, but around 25% of UK employees report having a physical health condition that affects their performance at work and over half of those who are suffering from stress cite out-of-work issues (e.g., family, relationship, ill health, personal finance) as the cause of their workplace stress.
Any business can identify and act on absenteeism, but employees ‘hiding’ the issues that are preventing them from enjoying their work means increased staff turnover and reduced productivity.
In addition, the true cause of ‘visible’ sickness absence may not be properly understood.
That said, it is thought that every £1 spent on healthy workplace initiatives means a benefit of between £2 and £32 in returns due to improved staff health, increased productivity, increased engagement, reduction in staff absence, and easier recruitment.
Research by Deloitte indicates an average return of £5 for every £1 spent.
This is why so many businesses are now actively engaging in healthy workplace initiatives, programmes, and activities.
According to the Chartered Institute of Personnel and Development (CIPD), only 6% of businesses report that their health and wellbeing activities have not resulted in positive benefits.
How can you improve your workplace health?
Through the Healthy Workplaces Programme, which ATN Partnership has taken time to look into in Kent and Medway.
Thanks to central government funding, which has been secured by Kent and Medway councils, businesses across the region can now access help, guidance and support in creating a healthier working environment.
The support is completely free of charge and can also lead to recognised accreditation as a ‘healthy workplace’.
Grace Eldridge, Workplace Health Coordinator in the Public Health Directorate said:
“The programme is free, completely funded by Kent County Council and Medway Council and is open to all businesses with three or more employees who are based in Kent.
Essentially, we aim to ensure that the workplace environment, policies and practices create an ideal environment and culture for fit and healthy employees, both physically and mentally.”
The Kent and Medway Healthy Workplaces Programme has been running for around two years and allows businesses to attain recognition as a bronze, silver, gold, or platinum workplace, endorsed by the Department of Health and Social Care.
Beyond the free support and advice, businesses also receive free attendance on recognised mental health courses and guidance on developing policies for aspects such as ‘smokefree’ and substance abuse support.
Niyi Idowu, Partner at ATN Partnership, said:
“Attracting, retaining, and simply getting the very best from team members is a challenge for all businesses, regardless of size. Sickness absence is a really easy thing to monitor and quantify, and it’s easy to then act to help people.
“But it’s the hidden costs that really hurt - not just financially. If people don’t feel able to talk about things, the things they really need help with, then it impacts everyone.”
To find out more about this programme, you can contact Grace Eldridge, at Medway Council and Kent County Council on 01634 333768 or email her at firstname.lastname@example.org.
Link to Health and Wellbeing at Work 2022 survey