Ellipse discusses the importance of SMEs staying on top of absence and how income protection products can help, following two sets research. Commissioned by Ellipse, Censuswide surveyed 1,005 employees and 504 SME decision makers in October 2016.
Typically an SME employee takes 4.8 sick days per year, costing an average of £217 per employee per day. That’s £1,041 per employee, per year and that’s just short term absence (figures from 2015 research). Apply this to an employee absent for a longer period, perhaps a month or two, and costs such as sick pay, replacement staff and lost productivity mount very quickly.
Yet despite these significant costs, many small businesses are unaware and unprepared to deal with sickness absence. Of course small businesses in particular have many pressures and priorities; and absence issues can add to these pressures, however the good news is that these can be easily be addressed.
The primary asset of most businesses is their people, so knowing where they are and how they are is a crucial first step. This might sound simple, but our 2016 research shows that many businesses are not doing this with 31% of small and medium sized businesses revealing they do not have a process for managing employee absence:
- 15% of SMEs do not record absence at all
- 12% will only make a handwritten note
- 4% just make a mental note
While 34% manually record absence in a spreadsheet, having at least some kind of process in place, it still isn’t a robust enough system.
For those who are better at keeping on top of absence, the time spent doing so can be significant. Holiday requests and return to work forms can pile up fast creating a mass of paperwork on your desk that can be hard to keep on top of.
Larger businesses have an advantage, as most have an absence management system to record and monitor and will also likely have dedicated HR people within the business. SMEs however don’t and tend to rely on manual processes and spreadsheets at best with our 2016 research showing 29% believe they don’t have a sufficient system to record holidays either.
In terms of administrative issues employers come across:
- 44% say they face problems such as approving duplicate holiday, delays in administering holiday requests and sometimes not knowing when people are on holiday
- 19% of SME decision makers do admit that sometimes mistakes are made which leave them short staffed
- These types of mistakes are also noticed by 43% of employees
Recording data online
Using an online management system to record employee holidays and unplanned sickness absence in one place, makes it easier to see what’s happening in your organisation and removes the paperwork.
Last year’s research also shows that of those companies using an online absence management system, 72% would recommend other small and medium sized businesses to implement one. A third (33 per cent) said that it had reduced sickness absence across their business, helping to cut some at least some of the short term absence costs we mentioned earlier, and almost half (47%) said it has reduced the administrative time taken by HR to manage both sickness absence and staff holiday.
Connecting absence management and income protection
Data also helps support and rehabilitate employees absent through ill health. Even though the financial benefits that come with income protection do not typically kick in until three to six months into the absence, most insurers now provide early medical interventions as increasing evidence shows how effective this can be in helping the employee to successfully return.
At Ellipse we have taken this initiative a step further by providing all of our Group IP customers with their own online absence management system, allowing them to accurately record absences (of all types) from day one.
Integrated with their income protection insurance, this automatically notifies us of a potential long term absence at an early stage and allows our case management team to monitor the data and intervene proactively to support an employer dealing with an absent employee. This includes treating the employee’s reason for absence with appropriate healthcare services and helping them return to work in a suitable time frame, benefiting the employers through shortening absence periods.
In a nutshell
It is clear from our research that many small and medium sized businesses are not great at managing absence. Given the business risks, we believe employers should be taking this more seriously. But as income protection insurers also have an interest in helping an employer manage absence better, employers can now turn to this traditional employee benefit for a complete solution which helps their business and provides important cover for their employees.
For more information, please read our full 2016 research report here: ‘Getting a grip on absence – how UK SMEs can manage absence better’.