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Employers fail to take the measure on sickness absence, finds Aon Hewitt

David Woods , 23 Mar 2012

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Employers are failing to get to grips with the issue of sickness absence, with many unaware of current absence levels, according to Aon Hewitt.

The Aon Hewitt Benefits and Trends Survey, which polled 185 employers in the UK, representing a combined workforce of 650,000 employees globally, revealed employers are missing opportunities both to improve the health of their workers and to cut costs - mainly due to a lack of focus on understanding and measuring sickness absence.

A lack of integration between absence and healthcare strategies is compounding the issue: 13% of respondents view the components of their benefits programme completely separately, while another 36% say they are only loosely related.

A third (32%) of those polled said they did not know how many days employees are absent through ill-health annually. Of those who could give a figure, 60% were not very confident of its accuracy.

Companies are also failing to grasp the true cost of sickness absence to their organisation. 53% of respondents admitted that they do not measure the total cost of employee healthcare (ie, all health -related activities). A further 14% did not know whether their organisations measure the total cost of health.

Of those who do measure the total cost, many seem to be underestimating it. The vast majority of the survey respondents said that health costs their organisation less than £1,000 a year per employee. However, past research from Aon Hewitt has shown that the average cost of healthcare is usually between £2,000 and £3,000 per employee per year.

Two thirds of those who do not measure the cost of absence said they would like to measure return on investment in employee health.

James Kenrick, healthcare consultant at Aon Hewitt, said: “There is a widespread lack of knowledge among the UK’s employers about levels of absence through sickness and the wider costs of healthcare. This suggests a lack of focus on absence rates and on health generally. It is clear that there is a need for healthcare measurement and for tangible improvement on the current situation - but without an accurate picture of sickness absence and healthcare costs, employers will struggle to make and measure improvements.

“Employers who are not measuring rates of absence through sickness should start as soon as possible. In our experience, once management is aware of high sickness rates and the corresponding costs, it takes only a modest degree of intervention to bring rates down swiftly. The sorts of actions employers can put in place quickly, - and often at relatively low cost - include return-to-work interviews and triggered referrals for rehabilitation.”

 

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Some more figures

Peter Marno 23 Mar 2012

What I would add is that in all analyses I have conducted on quite large employee populations the 'low hanging fruit' figures show that well over 50% of the aggregate number of days comes from periods in excess of 10 days which, in absence terms, account for under 10% of the overall incidence - a variation on the 80-20 rule!

Pay-On-Performance System

Hillary Spicer 27 Mar 2012

We have been talking internally for sometime about offering a zero investment, pay-on-performance model. But most of our prospects don't know what their baseline absenteeism is and therefore we have no baseline to measure our performance against.

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