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Absenteeism and the cost to businesses

Absenteeism is a problem for most companies in the UK and has a particularly significant impact on small to medium size businesses.

Reducing absenteeism can have a significant impact both directly and indirectly. There are various tools which can be implemented to help reduce absenteeism such as: –


 Return to work interviews – proven to be effective, but may not tackle the main causes of absenteeism.

– Flexible working – a contributor to absenteeism can be down to the poor implementation or no flexible working policies which can lead to increased levels of short-term absence.

– Better reporting and recording – key to allowing management to analyse the data and identify trends and anomalies to support management of absenteeism. Employers should measure and report on a number of factors such as dates, length of absence and more.


The Government’s Fit for Work service, which rolls out in 2015 is intended to help cut sickness absence costs for employers. However, some believe that the changes will leave small firms out of pocket. The previous scheme supported business by allowing the recovery of SSP from HMRC, with 70% of this fund being utilised by small and medium organisations. However, the scheme was abolished in April 2014 after reports suggested that it offered no incentive for employers to reduce their absenteeism.

The new Fit for Work service will provide occupational health (OH) assessments and assist employees to return to work when they have been absent for 4 weeks or more. Whilst small businesses are the least likely to have access to OH services at present; the government hopes that financial loss to firms from the end of the recovery scheme will be offset by a reduction in lost working days. There will also be an exemption from income tax of up to £500 per year for each employee on medical treatments recommended the new Fit for Work service or an OH service arranged through the employer.

The Fit for Work service is expected to be fully operational late 2015.

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