How to Calculate the Cost of Absence
For businesses of all sizes, absence can be expensive. The CIPD estimates absence costs a company an average of around £554 – £557 per employee, per year depending on whether they are a manual or non-manual worker and these costs can quickly start to stack up within larger workforces.
Calculating Your Organisation’s Workplace Absence
Working out how much absence is costing your company can be a little complicated, but if you’re just starting to understand this cost, a useful place to start is the following calculation, called the Lost Time Rate:
Total absence (hours or days) in the period
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Possible total (hours or days) in the period
Then, simply take the average salary and work out the cost of the lost time.
When looking at how you can decrease this cost, it can pay to get a little more advanced.
Musculoskeletal disorders are one of the biggest causes of absence in both manual and office based roles, accounting for up to 44% of all work related ill-health in 2014/2015. Work related musculoskeletal disorders (WRMSDs) contributed to an estimated 9.5 million working days lost during the same period.
If you’re logging the causes of absence in your workplace, you can use the same equation to work out how much the lost time alone is costing your organisation through MSDs.
Well-being and Reducing the Cost of Absence
Many companies are now introducing well-being programs to help keep their teams fit and healthy and also enable them to get back to work more quickly.
Now we know how to work out the cost of lost time, it’s relatively easy to evaluate the areas which will see the most benefit from well-being programs and deliver a positive ROI for the company.
Because of the high cost of MSDs to organisations through lost time, any well-being program that can cut the length of that absence, or avoid it altogether, will demonstrate a much higher ROI than other programs.
Below are some examples of staff wellbeing programs and their comparative ROI:
| Dimension of Wellbeing Targeted | Sample Program | ROI/Result | Source of ROI | Impact |
| Treatment and prevention of physical ill health | Occupational physiotherapy | Estimated £11 return for every £1 spent through recorded decrease in absence and improved employee productivity | Back in Action UK | High |
| Promotion of better physical health | Free fresh fruit at work | 10% increase in job satisfaction | Investors in People | Low |
| Promotion of better physical health | Fitness program | 20% – 55% reduced healthcare cost | Norcal Wellbeing | Medium to high |
| Mental and physical ill health | Disease management | $3.80 saving on every $1 spent | Rand Corporation | Medium to high |
| Financial wellbeing | $20/mth discount on health insurance premium | 36% increase in biometric screening participation | Employee Benefit Research Institute | Medium |
| Social wellbeing | Lifestyle and management program | $0.50 saving on every $1 spent | Rand Corporation | Low |
| Environmental wellbeing | Upgrading workplace environment | 15% increase in productivity | Worksafe | Medium |
When used to treat and prevent MSDs, occupational physiotherapy can yield a high ROI, making it an essential well-being program for any company that struggles with high rates of absence due to MSDs.
To help you do the maths and see how occupational physiotherapy can help your organisation, we’ve built a calculator that will enable you to see how treating MSDs can help get staff back to work and prevent further absence in your company.
Simply enter your details below to see how much workplace absence is costing you and what level of return on investment you could see.
*Please note, these are estimations only and not precise measurements based on your individual organisation and its requirements.*
Step 1.
Enter Your Organisation’s Details to get the Cost of Absenteeism, Presenteeism and Your Potential Saving
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Next, learn roughly how much our service will cost according to how many employees you have.
Step 2.
Enter the Number of Employees to get the Estimated Annual Price of Back in Action UK’s Service
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Finally, learn a rough ROI figure and expected return for every pound spent on our service.
