The best way to claw back UK business’s lost billions

We’re often told that one of the main things holding back UK business is the productivity gap – that we produce less per capita than our international competitors.

The Office for National Statistics (ONS) stated that in 2019, for instance, UK output per hour worked was lower than the US and France.

The national picture may bother you. But I suspect like many HR leaders or business owners, you’re more concerned with the concrete as opposed to the abstract: what about our company’s productivity gap?

UK productivity among the lowest of the G7, finds ONS

Solving the UK's productivity puzzle

How workers can manage both health and productivity

Here is another ONS stat to consider: the total amount of time lost to UK companies and public sector bodies through sickness in 2021 was 4.6 days per worker per year.

That breaks down to nearly 12 million lost days in construction, 11 million in transport, and more than 31 million in healthcare. Discounting Covid, this adds up to lots of absence; in 2018 – so pre-pandemic – that was over 141 million days. In 2021, it was over 149 million.

People get sick and are unable to work from time to time, but for businesses, it can be a challenge to organise and plan the resources necessary to work around this, and stay on track.

Employees are also entitled to annual leave, rest and the opportunity to come back to work refreshed after a deserved break.

But when absence and leave mounts up, occurs during busy periods, or conflicts with other team members’ absences, there is clearly a need to manage this effectively for a positive experience for both employees and their managers.

After all, people can be unwell in ways that aren’t physical, too. Deloitte (December 2020 figures) says poor mental health costs UK employers around £45 billion each year, a number made up of absence costs of around £7 billion, ‘presenteeism’ costs of up to £29 billion, and lost turnover costs of around £9 billion. In 2018, ONS figures suggest that 17.5 million days were lost to work-related stress, depression or anxiety.

If you don’t know what’s going on with absence, and what absent team members might be going through, then these problems could harm not just your bottom line due to lowered productivity, it could also harm your employees’ wellbeing.

Data insights among edays’ customers during 2022 showed absence gaps that can so easily lead to a deterioration in employee wellbeing.

The average length of absence due to mental health was over two weeks (14.42 days), for example – and the average sickness absence, while not as extensive, could still hamper your organisation’s overall productivity, at 3.2 days.

These numbers make it clear to me that to close the national productivity gap and the average UK business productivity gap, we need to be on top of tracking exactly how many days you’re losing to sickness and mental health issues, and supporting employees effectively to enable them to return to work. Not doing so can quickly mount up to a larger problem.

A key HR process that remains far too un-automated

Too many companies either use pen and paper or spreadsheets to log absence and leave. As a result, many organisations that are good at knowing exactly where they stand with stock levels and cashflow end up struggling with knowing precisely enough what their human resource is at any one time.

One option, which would need to complement supportive and robust HR line management practices, is to consider innovative industry HR technologies to help – enabling you to have the accuracy, detail and the ability to identify and analyse patterns among your employees.

For example, if there is a member of the team who is struggling, taking a lot of days off sick, and you are too distant from their day-to-day to see that, you might be risking seeing a valuable member of the organisation walking out the door.

A better approach: collate intelligent insights to spot patterns and alert you to possible hidden issues like this. Doing so means you get real data on who’s available to do what and when, but you also get a chance to intervene gently and sensitively nice and early.

Done right, I’ve seen this open a confidential dialogue with people to see if there is a way to support them to get back on track.

For example, checking in with an employee after an absence from work is good practice, as is having honest, empathetic conversations.

Both help to contribute towards positivity surrounding employee wellbeing and allow for actions to be taken or guidance to be provided where necessary.

Software that helps to support and enable people managers and HR to manage and make informed decisions and offer greater insight into people and how they work, should be investigated.

If you’re still using spreadsheets or paper to record absence and leave manually, you’re risking inaccuracy, lack of detail and poor visibility; and so those open conversations, the reasons behind absences, and your ability to be supportive will be diminished.

Making your war for talent a lot easier

Yes, the UK’s productivity gap is an issue, but we can’t start addressing the gap until we get full visibility into where we really stand with our people.

The good news is that by using smart insights to help you analyse workforce leave and absence patterns will just give you that. It will also help you become a much better employer and offer employees the right support or guidance where needed.

This, at a time when the war for talent in the UK shows no sign of abating and UK businesses continually struggle with double-digit vacancies, seems to be a step well worth taking.

Chris Moseley is co-founder and CTO of edays