In their Sickness absence report 2023 SD Worx calculated direct absenteeism costs for the private sector based on the payroll data of 800,000 employees. Katleen Jacobs is a legal consultant at SD Worx and collaborated on the report: “The direct cost of absenteeism last year was €1527.63 per full-time employee.
To work out the figures, we multiplied the average number of non-performing hours due to absenteeism per full-time employee by the average hourly wage across all sectors. By multiplying that amount with your total FTEs, you get a pretty accurate estimate of direct absenteeism costs for your company”.
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“Direct absenteeism costs last year amounted to 1527.63 euros per full-time employee”
- Katleen JacobsRising absenteeism trend continues
“Unfortunately, both short-term absenteeism along with medium and long-term absenteeism is continuing to rise over the years”, Katleen continued. “And a number of other absenteeism trends also persist. For instance, frequent short absences are especially problematic among young employees. In turn, older workers are more likely to drop out for longer periods. “Sectors with demanding physical work and limited flexibility experience much higher absenteeism”, adds Bart Teuwen, absenteeism expert at Mensura. “Workers in those sectors are almost twice as likely to be absent as office workers”.
The figures in the Sickness Absence Report are based on the latest SD Worx payroll data: anonymised data on more than 800,000 employees from over 23,000 private Belgian companies. It covers workers over 18 years of age who have been employed for more than 6 months, excluding students and temporary workers. The HR service provider examined both short-term sick leave (< 1 month) and medium-term sick leave (> 30 days and < 1 year).
Few companies calculate absence costs
This means a company of 100 employees is looking at over €150,000 in direct absenteeism costs. Talk about an eye-opener!
Katleen: “In sectors with high salaries, this is obviously higher, because that 1,500 euros is an average across all sectors. To calculate the exact cost for your company, you can use more specific figures for your sector or company size. But even leaving that nuance aside, the amount is a pretty realistic indication of the impact of absenteeism on your costs. Or: how much you can save if you get your absenteeism rates down”.
Bart: ”Despite this, far too few companies are continuing to dwell on their absenteeism. When I ask during a keynote whether anyone knows their company's absenteeism figures, only a few hands go up in the air. Calculating the cost, that’s something really very few companies do”.
Replacement up to half more expensive than labour costs
In the wake of those direct costs follow a great deal of indirect costs too.
Katleen: “It’s true: the rest of the team has to work overtime, or you look for replacements - on an interim basis, for example. Or you are already systematically building in excess capacity”.
Bart: ”Some large companies have a mobile team to cover absences. In healthcare, for example, they work a lot with what are known as 'butterflies'”.
Can these indirect costs also be quantified?
Bart: “To include all indirect and non-measurable costs, according to the literature, you would have to multiply your direct absenteeism costs by 2.5. This means you quickly end up with staggering amounts. Replacements via interim or overtime hours are up to half as expensive as regular staffing costs.
In addition, there are numerous non-measurable effects of absenteeism. Just think of the reduced quality and faltering service, frustrations within the team and with clients, a damper on your employer image and so on”.
Katleen: “Especially with frequent short-term absences, non-measurable costs weigh heavily. You may end up in a downward spiral of even more absenteeism or even turnover. For this reason, be sure to give adequate attention to the staff who help absorb the work of the absentees”.
Benchmarks put your numbers in perspective
Absenteeism can never be completely ruled out. How do I know if my organisation's numbers are acceptable?
Katleen: “Benchmarks tell you whether your absence rates are in line with other organisations within your sector or of similar order of magnitude. An important note here: they tell you nothing about your absenteeism problems per se. Suppose you score just slightly better than your sector average as a healthcare player, can you rest on your laurels?”
Bart: “Absenteeism benchmarks put your numbers in perspective, but most importantly, you have to dig deeper into your own data. Is the absenteeism mainly among blue or white-collar workers? Are specific departments more affected than others? Do newcomers drop out more than experienced employees? And so on. You then set a target: what absence rate is achievable for our organisation? And how are we going to achieve this?”
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“Communicate absence figures as well as the cost. That informs people about the financial impact”.
- Bart TeuwenPut absenteeism on the social consultation agenda
What message do you have for organisations struggling with high absenteeism costs?
Katleen: “Stop letting it run its course and break the taboo. Start talking to managers and put out other 'feelers' in the workplace. Cut across departments and staff groups that record high levels of absenteeism. After all, it is the signals from the floor that will inspire action”.
Bart: “Communicate the absence figures as well as the cost figure to your team. This informs people about the financial impact on the organisation. This avoids pointing fingers at people, but to take them on a path to solutions. The engagement you create this way is in itself a buffer against absenteeism. And finally, we are entering a new legislature of social consultation. Put tackling absenteeism on the agenda of your Prevention and Protection at Work Committee (CPBW)”.
