Aggressive tactics to cut sickness absence don't pay

Over-zealous management of sickness absence may be counterproductive and cost as much time and money as the absences it is designed to reduce, new research has indicated.

Professor John Treble, an economist from Swansea University, has challenged the figures presented by employers' organisations such as the CBI, which claim that worker absenteeism costs business more than £10 billion a year.

Arguing that absences cannot be controlled without cost to the employer, Treble has compared the cost of the absence with that of personnel managers' efforts to minimise it - something that the CBI does not take into account.

"In effect, the CBI measure inflates absence costs by ignoring the extra expense that is incurred in reducing absenteeism," Treble said.

Using figures from France, Treble compared the cost of absence prevention with the cost of lost production caused by absence. "It turns out that these two figures more or less cancel each other out, implying a net cost close to zero," he noted.

Treble's research also found that firms operating "just-in-time" practices have significantly higher absence costs. By failing to hold large quantities of semi-finished product, such companies are more likely to experience disruption to the production flow if workers are off sick.

"Not all businesses operate in the same way, which means that absenteeism may have more financial impact on some than on others," he added.

Research on UK sickness absence is promised, but these finding suggest that draconian sickness absence management policies cost firms as much as they recoup, if they are effective at all.

Melvyn Coles, Joseph Lanfranchi, Ali Skalli and John Treble, "Pay, technology, and the cost of worker absence", Economic Inquiry, August 2006.