According to the Sickness Absence Review published this week, there are 150 million days lost to sickness absence each year.
Employees that work for smaller firms are generally happier and less likely to take time off - or 'throw a sickie' - with recent research from the Federation of Small Businesses (FSB) showing that on average employees in smaller firms will only take 2.4 days off per year, compared to the national average of 7.7 days.
However, smaller firms are more disproportionately affected by employees that go on long-term sick leave than bigger businesses and proportionally the costs are higher.
The FSB has welcomed many of the recommendations in the review. The proposal to introduce an independent assessment service that will be free of charge for small firms to use after four weeks of sickness absence is a welcome one.
Many small firms become frustrated when key employees are signed off work for months at a time and would welcome free advice on how to get that person back to work. It is important to recognise that good work is good for people and with support, sickness absence needn't be long-term.
The FSB also welcomes the suggestion that there should be targeted tax relief for medical treatments or vocational rehabilitation that aim to get people back into work or to retain them in a job.
Small businesses have told us that the time that it takes to get access to NHS treatments can be a problem and so some may choose to pay for private treatment to ensure that they get key staff back in work sooner. Making this a more attractive option through offering tax relief could help encourage businesses to do this.
But, on average sickness absence costs a small business on average about £1,500 per year. For some, it can be as much as £5,000.
You might say that £1,500 isn't really a lot of money in the grand scheme of things. But, to a business with a tight cash-flow, it is. This is why we have some concerns that the review recommends that the current method of recovering the cost of Statutory Sick Pay (SSP) is removed.
On average, members of the FSB are micro-businesses - meaning that they have fewer than 10 staff. If they've got a person off for a prolonged period of time, they would probably have to pay someone else to come in to cover the work as well as paying SSP. This fails to take into account adding the cost of training, possible loss in productivity and potentially missed deadlines.
Businesses currently claim some of the costs of SSP back through the Percentage Threshold Scheme. This existing scheme is not ideal, it is complicated and confusing, does not allow the full amount to be recovered and is not well understood. So, because of that many businesses will ask their accountant to do so - costing more money.
However, if this recommendation is taken up they won't be able to recover anything at all. The FSB understands that for larger businesses the recovery of SSP is not a big concern as many are able to offer occupational sick pay anyway. However, for the smallest firms these costs really add up and during difficult economic times, they really need a quick, simple and effective way of recovering the costs of SSP. Not only will this help cash-flow but will also give them more financial freedom to perhaps invest in vocational rehabilitation and manage sickness absence more effectively.
The FSB has called for an easier system to be introduced - something in line with the way that a business would claim back statutory maternity and paternity pay - and we were disappointed that this was not something that was included in the report.
Sickness absence is another one of those complex pieces of employment law that businesses have to deal with. Through introducing a small employer's relief we believe that it would make the administrative burden easier as well as helping businesses better manage sickness absence.
We need to make sure that small businesses are not hampered but are given all the support they need to get the economy moving again.