Absenteeism costs $1.3 billion

4 Dec 2013

An estimated 6.1 million days of work absences cost the New Zealand economy approximately $1.3 billion last year, according to the first Wellness in the Workplace survey to be conducted here.

Wellness in the Workplace is a joint study undertaken by the country’s largest health insurer, Southern Cross Health Society, New Zealand’s largest advocacy group for enterprise, BusinessNZ and specialist injury management provider, Gallagher Bassett.

The nationwide study of around 97,000 staff was carried out in June 2013 in order to benchmark absence levels among employees.

Phil O’Reilly, BusinessNZ Chief Executive, says Wellness in the Workplace is the most comprehensive assessment of where New Zealand stands in terms of the connection between absenteeism, sickness, costs and related practices in the workplace.

“It draws a line in the sand on workplace health and wellness. While parts of the puzzle have been found from time to time – until now, no one has put the pieces together to see what the picture looks like,” says O’Reilly.

And that picture is fascinating:

  • The average absence level per employee was 4.5 days, at a typical cost of $837, amounting to around $1.3 billion across the economy in 2012.
  • Average absence days in the public sector stood at 6.6, compared with 4.3 in the private sector. In addition, median costs per absent employee in the public sector averaged 110% more than in the private sector.
  • Manual employees take an average of 5 days, compared to 3.5 days for non-manual.
  • Absence costs vary by size of organisation and sector. SMEs average fewer than 4 days per year, larger enterprises average well over that number.

Peter Tynan, Southern Cross Health Society Chief Executive, says it’s vital policy makers and employers have an understanding of the impact absenteeism has and what the key drivers are.

“Now that the true cost of absenteeism has been quantified we have a broad indicator of the cost savings that could be achieved if employers can reduce the extent and duration of employee absences,” he says.

While non-work related illness and injury is by far the most widespread driver of employee absence, followed by caring for a family member.

“What the results tell us is that employers need to identify what lies behind absences and therefore consider what other support it may be appropriate to offer their workers to improve attendance,” says Tynan.

For example, with caring for a family member such a common cause of absence, O’Reilly says employers could consider offering flexible working options such as working from home, or part-time hours as a way to reduce levels of absenteeism.

Click here to view the full Wellness in the Workplace 2013 Survey summary report.