Staff Absenteeism is having a big impact on profitability say UK small and medium enterprises (SMEs). This is according to 71% of firms questioned in a survey commissioned by HR and payroll specialist Moorepay.
The research found that many UK SMEs are experiencing higher than average absenteeism in their business. According to the Office for National Statistics, the average number of sick days for a UK employee is 4.3 days a year and yet almost half (49%) of small business owners said staff take more than five days off each year. For 14% this figure rises to seven days or more.
Yet with higher than average sick days and the impact on profitability, few firms are taking positive action to reduce absenteeism in their business. This is despite the fact that many feel introducing policies around absences, flexible working, time off for family or medical reasons and return to work programmes can have a positive impact on reducing absenteeism. Almost three-quarters (72%) believe the use of such policies could reduce the rate by 11% or more.
Whilst the vast majority of firms (91%) do track staff absences this is often paper or spreadsheet-based leaving it open to human error – 39% log absenteeism in this way. Many have little insight into the true picture of absenteeism by failing to track the multiple reasons for time off work. Whilst days off sick and annual leave are commonly monitored by 75% and 66% of SMEs respectively, other reasons for absence are less well tracked. Training, compassionate leave, medical appointments, sabbaticals and duvet days are only reviewed by 55%, 51%, 50%, 28% and 22% of businesses respectively.
Despite the business impact of absenteeism, many SMEs have no policies or processes in place to manage or reduce absenteeism in their business even though they recognise this can have an impact on the rate of absence. For example, almost half of businesses don’t offer flexibility around time off for medical appointments (46%) and family issues (53%).
“According to NICE, the National Institute for Healthcare Excellence, it is estimated that absenteeism costs the UK economy £15 billion a year. And yet, many SMEs have inaccurate or incomplete data on staff absences and are unable to accurately assess how much it is costing their business,” explained Lisa Gillespie, director of HR services at Moorepay. “Those that recognise the business and financial implications are often spurred on to take action. Having insights into absenteeism and taking positive steps to reduce it can have a huge impact on business productivity and therefore profitability – something no business can afford to ignore.”
The value of UK fraud hit a 15-year high of £2.11bn in 2017 as more companies made it a priority to tackle wrongdoing, according to a new study. Accountancy firm BDO examined reported fraud cases worth more than £50,000 and found that the total number rose to 577 in 2017, compared with 212 in 2003. The average amount stolen in each incident rose to £3.66m, up from £1.5m in 2003. The biggest rise was in the financial services industry, where the total value of fraud rose to £899.7m last year, compared with £214.9m in 2016. Numbers of reported cases almost doubled to 100 last year, compared with 58 in 2016. The report also found fraud cases on the rise in the retail sector. The number of cases rose from 16 in 2016 to 29 in 2017 and the value from £4.2m in 2016 to £337.3m last year, largely because of one big case. The value of fraud detected in the public sector fell to £368.5m last year, compared with £1.37bn in 2016. However, the 2016 number was distorted by a £1bn value added tax fraud case. Kaley Crossthwaite, partner and head of fraud at BDO, said that more companies were uncovering and reporting fraud.
Companies, charities and public sector organisations were also being more proactive about recovering assets through the courts. “A significant amount of fraud still goes unreported but the figures suggest that people are more willing to come forward to report it,” she said. “There is an expectation that fraud will be reported and there is a real drive to ensure that the police are doing something about it — rather than a company simply firing a fraudster, for example. Bribery and fraud are also becoming more of a priority and shareholders expect corporates to have policies and action plans in place,” she added. Employees were behind the most fraud in 2017 with £474.3m siphoned off in this way. Tax fraud cost £351.8m. Money laundering, management fraud in financial accounts and corruption were other common problems. A number of high profile financial sector frauds have been prosecuted through the courts in the past year. The cases include the jailing of two former HBOS bankers and four associates for a £245m fraud perpetrated from the bank’s Reading branch between 2003 and 2007, which “ripped apart” small businesses. The fraudsters spent money on prostitutes, yachts and luxury holidays. Two city traders Georgy Urumov and Vladimir Gersamia were also jailed for a £141m fraud against Russian bank Otkritie.