Surely it won’t make any difference if I take a few days of sick leave. That’s what people often think when there is talk about the costs of sick leave. Individual employees cannot always appreciate their value as a factor in the company’s productivity.
Every year, Finnish employees are absent from work for an average of 5–7 days due to illness. Sick leaves are a burden on entrepreneurs, and they cause problems, especially for SMEs. One person’s absence can paralyse the company’s entire business. However, nobody usually thinks about the costs when things are going well.
Sirpa Arffman and Ulla Juuti, specialists in personal risks at Pohjola Insurance, provide answers to some common questions about sick leave and companies.
Why do people downplay the costs of sick leave?
Sirpa Arffman (SA): Absence due to illness is not discussed enough. It’s not that the costs are downplayed; people avoid the topic altogether. It pitches employees and employers against each other. Employees rarely have a grasp of the costs that sick leave causes. Often, employers don’t know either.
The costs of sick leave remain unclear if there is no monitoring model to highlight the costs, and the matter is not discussed in the workplace. The average costs are not discussed, and they do not reveal the true price of absences due to illness.
Does it matter if one employee is absent due to illness?
SA: The idea that one employee doesn’t make a difference is wrong. We all have our own roles in the work process, and we all bring something to the table. The kinds of workplaces where people are ‘just doing their job’ are a thing of the past. If the importance and responsibilities of a role or job are not made clear, the employee will inevitably undervalue their input. Every day of sick leave makes a difference.
Did you know that the costs of absences due to illness vary, depending on the sector, salary level and other costs? For example, the costs of production equipment continue to mount, even if the equipment is not in use. On average, one day of sick leave costs a company about EUR 350, and each employee in Finland is absent for an average of 5–7 days due to illness every year.
Can individual employees affect the rate of absence at a company?
Ulla Juuti (UJ): For many people, the work piles up while they are absent, and they get it done when they return. Everyone is responsible for looking after their working capacity, but the work community can support everyone’s occupational wellbeing through fair and equal treatment. This applies to behaviour as well as sharing work and expertise. Even simple things can help. When was the last time you talked to colleagues you barely know to ask them how they are?
Did you know that self-certification procedures reduce the company’s costs when employees can be absent without requiring a medical certificate?
How can the employer reduce the rate of absence due to illness?
SA: Companies can affect the rate of absence due to illness by improving working conditions and occupational wellbeing. They can also pay attention to enhancing the efficiency of the treatment process. It all comes down to management and organisation. Companies need to have a genuine interest in working capacity, and they must have tools for monitoring absences due to illness and providing tangible data on the costs of sick leave.
Did you know that the most apparent costs of sick leave are the company’s fixed operating costs, insurance premiums, payroll costs, occupational health care costs, substitute employee costs, machinery/equipment costs, and internal recruitment? It is more difficult to judge the costs of degraded quality, complaints, deteriorating co-operation and the value of other intangible capital. It is important to get treatment quickly, as it will speed up your recovery and benefit both you as an entrepreneur and your employees. With medical expenses insurance, you shorten absence due to illness.
What is the bad management that leads to sick leave?
UJ: Some absences due to illness are actually due to bad management. Employees may feel as if supervisors do not care, and that the structures and operating methods in the work community are unfair. Preventive measures and active development reduce the rates of absence due to illness. Some personnel react and are keen to take sick leave when they feel that it is possible, whilst others work long hours and end up taking sick leave due to the excessive workload.
Did you know that the company’s senior management is responsible for advancing occupational wellbeing? The occupational health care service can help if necessary, so the employer and occupational health care service should work closely together. The money invested in working capacity and occupational wellbeing will be recouped several times over.
How can supervisors reduce the rate of absence due to illness?
UJ: The company’s operating methods need to be the same for everyone, and every member of personnel needs to be aware of them. Some supervisors see to this as part of their normal daily routines, but others find it more difficult to discuss issues. Not everyone is brave enough to discuss matters related to working capacity, because these issues may feel too personal. The tools available to supervisors for reducing the rate of sick leave include providing feedback, thanking colleagues, and demonstrating encouragement and care.
Did you know that an increasing rate of short-term absences is a sign of problems in a company? If the company does not intervene at an early stage, the problems could eventually lead to a total loss of working capacity.