Businesses face higher costs associated with absence when the SSP changes become law, probably from October 2025. Here we provide 4 steps to prepare for this change.
While the odd sick day here and there is natural, and should be encouraged if their sickness is genuine, absence can be a huge problem for you as a business owner. In 2024, employee absence was average of 4.3 days.
Following the changes to Statutory Sick Pay (SSP) changes, there will be a significant increase to business variable costs. This is because SSP will be paid from the first day of sickness. One more reason to review your absence and invest in preventative measures.
SSP changes: SSP will be available from the first day of illness, removing the current 3-day waiting period. In addition, the current lower earnings limit (£125 per week) will be removed, making SSP available to lower paid employees. The rate of SSP will be set at either the flat rate in force from time to time (currently £118.75 per week) or 80% of the employee’s average weekly earnings, whichever is lower. You may need to budget for increased absenteeism as a result of these changes.
Managing and reducing absence is important
If left unchecked, employee absence can have a ripple effect on your business, affecting everything from productivity to morale. Here’s why it’s crucial to address this:
- Financial impact: With UK businesses losing over £100 billion to absence, absenteeism clearly has a significant cost. Lost revenue, overtime expenses, SSP for an extra 3 days, and the need for temporary replacements can very quickly add up.
- Operational efficiency: Absences disrupt workflows, delay projects and increase workloads for other employees, which can lead to stress and burnout in your team.
- Employee morale: Persistent absenteeism creates an uneven distribution of work, harming team dynamics and lowering employee engagement, especially if it is not effectively managed by the business.
Step 1: Review your polices
Have your policy and procedures reviewed to ensure it is legally compliant and comprehensive enough to manage all types of absence; duvet days, short term and long term. Our HR People have robust policies to suit your unique business: contact us.
Step 2: Track the absence
One of the most effective ways to monitor absence is by leveraging HR software. This type of software allows you to:
- Automatically record and monitor employee absence
- Identify patterns and trends
- Generate reports to quantify the impact
Having this data at your fingertips helps you to make informed decisions and address issues proactively.
Our HR People have links with several HRMS suppliers and will be happy to talk through their advantages. These really can be very cost effective, and the automatic workflow saves hours of HR administration.
Step 3: Understand the root causes of absence
A return-to-work interview is a simple but very effective way to understand why employees take time off. These interviews can deter unnecessary absences and provide valuable insights into underlying issues.
Our HR People can provide proven templates and guidance to help you to conduct these interviews effectively.
Top reasons for absence
The leading causes of absence are various, but each type below requires different management in order to reduce risk to your business:
- Minor illnesses like colds and flu
- Mental health challenges such as stress, anxiety and depression
- Long-term health conditions or disabilities
Understanding these reasons helps you to address the root causes and prevent unnecessary absences.
Step 4: Take action to reduce absence
- Cultivate a culture of well-being: Support physical and mental health through wellness programs and a positive work environment
- Promote flexibility: Offer flexible working arrangements to help employees to manage their work-life balance
- Encourage open communication: Create a culture where employees feel comfortable discussing issues without fear of reprisal
- Train your managers: A consistent approach is vital. Ensure managers are adequately trained on managing short-term sickness absence
- Address mental health proactively: Train managers to recognise stress and provide resources like mental health support programs
- Use data to guide your actions: Tools like the Bradford Score can highlight patterns of absence and inform targeted interventions
Need ongoing HR support? Our proactive retained package keeps you ahead of HR challenges, with predictable costs making budgeting simple. For a fixed monthly fee, you’ll have a dedicated HR Consultant and access to our wider team of experts. Contact us for more information.
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