Employers fear that staff "pulling sickies" could have cost business £1.75bn last year alone, with many firms worrying that up to 15 per cent of absence is not genuine.
An annual absence survey by the CBI and AXA PPP healthcare, published today (Monday), shows the cost of overall workplace absence remains worryingly high, despite numbers of days lost falling to the lowest level for at least 15 years.
The survey shows firms paid £11.6bn in 2002 to cover the salaries of absent individuals and the resulting overtime and temporary cover. This translates to an average cost of £476 per employee. The overall figure is only fractionally lower than the previous year, when companies paid £11.8bn.
The number of working days lost fell by 5.7 per cent in this survey, from 176 million in 2001 to 166 million in 2002. That is 6.8 days per employee or 2.9 per cent of total working time, the lowest figures recorded since the survey began in 1987.
The CBI believes rising labour costs is the reason why the total cost of absence remains high despite falling absence levels.
John Cridland, CBI Deputy Director-General, said: "Though employers believe most absence is caused by genuine minor sickness, there are serious concerns about the number of staff 'throwing sickies'. There are too many people who will happily spend the day off work at the expense of their employers and their hard working colleagues."
The report will be formally launched on Thursday at a major CBI conference, to be addressed by Minister for Work Nick Brown.
Absence has been falling since the survey began in 1987 as more firms find ways to cut absence levels and limit the financial impact.
The survey shows absence falling most significantly in firms where senior managers are responsible for absence management. These organisations lose an average of five days per employee each year compared with 7.6 where line managers have the responsibility. Return-to-work interviews were the most effective absence management tool.
John Cridland said: "Almost 19 million fewer days would be lost each year if firms with the worst absence rates could raise their performance to average levels. Firms can help reduce days lost by making senior managers responsible for absence management, but business also needs efficient health services so staff can recover quickly."
The gap between public and private sector absence is worryingly large. Public sector absence averaged 8.9 days a year and cost £637 per employee, significantly higher than private sector absence which averaged 6.5 days and cost £466 per employee.
The survey also shows manufacturing firms reported higher absence levels than service sector companies - 7.4 days lost compared with 6.5 days lost.
Manual workers have significantly higher absence rates than non-manual employees. Manual worker rates averaged 8.4 days per employee in 2002, compared with 5.5 days per employee for non-manual staff.
Larger companies reported higher absence levels than smaller ones. Firms employing over 5000 averaged 9.3 days per employee, while companies with less than 50 staff averaged 4.9 days. The CBI believes smaller firms have lower absence rates because of more frequent senior management contact and greater peer pressure.
This survey has consistently shown no lasting link between absence and region. Last year absence was lowest in Greater London (5.4 days) and highest in Yorkshire and Humberside and the West Midlands (7.8 days in each).
Dr Mark Simpson, AXA PPP healthcare Director of Occupational Health Services, said: "The lack of progress in reducing long term absence is deeply disturbing. It continues to account for around five per cent of cases and as much as one third of time off sick. Yet only half of people responsible for managing absence have ever been shown how to do it. When well established tools such as early assessment and rehabilitation can help people return to work, it seems an enormous waste not to employ them."
This annual absence and labour turnover survey has been conducted since 1987. This year's survey was conducted in January and February 2003. Respondents were asked to report on absence and labour turnover for 2002. Replies were received from 550 organisations; 545 responded to the full survey and five to a shortened follow-up survey. Organisations responding employ 1.4 million employees, approximately 6 per cent of the UK workforce.
The report 'The Lost Billions' will be launched on 1 May at a CBI Conference sponsored by AXA PPP healthcare and will be addressed by Minister for Work Nick Brown. Further details of the conference are available on 020 7828 0999.
For journalists the full report is available from the CBI press office. Others can order it from CBI publications on 020 7395 8071.