Organisations in the Transport industry spend more on employee absence than organisations in any other sector, according to data from wellbeing and performance experts 
An organisation¹ of 1,000 employees in the Transport industry spends an average of £2.62 million per year on employee absence. Employers in the Education and Oil & Gas sectors follow closely behind, spending £1.98 million² per year for an organisation of the same size.

Taking an average across all sectors, the annual cost of absence for a 1,000-employee organisation is £1.75 million. Organisations in Transport, Education, Oil and Gas, Healthcare, and Retail sectors all spend above average on their employee absence costs. Conversely, organisations in the Government, Construction & Civil Engineering, Utilities, Manufacturing, and Hospitality sectors all spend below the UK average.

The figures come from the new Impact of Absence Calculator, which reveals not only the direct costs of absence to organisations, such as lost working time and replacement worker fees, but also the hidden costs of poor workforce wellbeing that organisations often overlook. Its ‘lost productivity’ costing, for example, factors in time spent by managers administering absence, and the typical reduction in output from inexperienced replacement workers.

Table 1 – Total Annual Impact of Absence for an organisation of 1,000 employees by sector* (Unadjusted)

Table 2 – Total Annual Impact of Absence for an organisation of 1,000 employees by sector* (adjusted to include the average of 18.9% of unreported absences)

Alun Baker, CEO of GoodShape comments: “Absence, productivity, and effective wellbeing management are intrinsically linked, and the true financial cost of absence is not fully understood by most employers. It goes far beyond the direct costs of providing temporary cover and sick pay. In fact, most employers fail to record employee absences accurately, and on average, 18.9% of absences are missed. So, in today’s challenging economic environment, with the focus on improving productivity and driving sustainable business growth, addressing employee ill health and correctly capturing and addressing absence has never been more important. Without a ‘cost-benefit’ analysis though, it’s difficult for leaders to make the case for investment strategies to improve employee wellbeing and organisational performance.” 

Baker concludes: “Our Impact of Absence Calculator illustrates the potential value to be gained by accurately identifying the causes of absence, then taking targeted steps to make a measurable improvement. It provides leaders with the compelling case they need to confidently inform their board about where to invest.”

GoodShape’s Impact of Absence Calculator draws on two decades of real absence data collated from UK employers. It calculates results for specific industries and sectors and can be tailored to specific headcount, salary, duration of absence, and other factors. It reveals the direct and indirect costs of absence specific to an organisation, including lost management time, and provides separate estimates for mental health-related absences. Users also receive information on the cost of unreported absence and non-compliance risks related to ‘Return To work’ processes.

Impact of Absence Calculator