By Daniel Hunter
More than two-thirds (68%) of small and medium-sized enterprises (SMEs) owners worry business productivity and revenue would be negatively affected if a member of staff was unable to come to work for more than four weeks, according to research conducted by AXA PPP healthcare.
Despite their concerns, just three in ten owners say they have no plan for managing employee sickness.
Glen Parkinson, SME Director at AXA PPP healthcare said: “SME owners recognise the potentially significant risk of lost productivity and revenue due to prolonged employee absence. Busy SME owners need to think about developing a system for managing employee absence to help mitigate unexpected costs such as recruiting temporary cover and potential business losses due to the temporary loss of a skilled worker.”
Three-quarters (74%) of those surveyed considered their employees to be critical to the success of the business, whilst 39% cite their employees as the business’s most important asset, ahead of products and services (23%), premises (13%) and equipment (11%).
Despite acknowledging the importance of their employees, the research suggests that these business owners are under-investing in systems that could protect employees and their business in the event of ill-health. On average, only 6% of SME expenditure after wages went towards employee benefits that could not only reduce sickness and improve absence management, but also boost business productivity and revenue. Currently only 14% of SME businesses offered employees private medical insurance and 18% had an occupational health scheme in place to protect employees. Both schemes support employees in the management of their health, thus reducing absenteeism in the workplace, and are widely acknowledged as being cost-effective, compared with the financial impact a business can incur if they don’t have a plan for long-term employee absence.
Mr Parkinson continued: “The spend on employee wellbeing versus their value as an asset to a small business is significantly out of balance. Absence due to sickness costs UK businesses an estimated £29bn each year.** SME owners can take measures to reduce this risk by being proactive in managing employee absences.
“We understand that small business owners have a million and one things to think about when running their business and health provision for their team can be easily overlooked. However, investing in employees’ wellbeing outweighs the cost in terms of productivity, morale and wellbeing.”