Employee absence at highest levels in 6 years, employers becoming more suspicious - survey

If it feels like your colleagues are taking more leave than normal, it might be because they are. 

New data from Southern Cross Health Insurance and Business New Zealand released on Tuesday found an increase in people taking their entitled leave. 

The study found while businesses are increasingly focusing on employee health and well-being, they are also facing significant cost pressures.

"The results make it clear most organisations are prioritising wellbeing, but there's no escaping they are doing so in very challenging times, where the cost of living and inflationary pressures throughout the economy are almost universally New Zealanders' key concerns," Southern Cross Health Insurance CEO Nick Astwick said. 

"It's important to acknowledge how pressing these financial issues are, as they dictate the way we respond. As always, business leaders keep an eye on costs, as we should, but we mustn't lose sight of the support our people need to enable them to be at their best. This support may come at a cost to businesses, for example providing extra wellbeing days, training and development and health insurance.

"That said, good health is priceless. This includes mental, physical, and social health, so I am encouraged by some of the key findings in this year's report," he said. 

The findings show employers are increasingly taking a proactive stance on workplace wellness in their day-to-day operations, with 89 percent of organisations surveyed taking steps to create a culture that endorses staying home when you're sick. 

The study also found more and more organisations have processes in place to support employees suffering from stress including employee assistance programmes, flexible working, diversity and inclusion policies and practices, mental wellbeing training and support for parents juggling working from home and caring for children.

Balancing legislated change, corporate commitment, and cost

Astwick said the strides businesses are making to look after employees in the workplace, and in their homes and communities, are impressive.

"Some change has been legislated, for example increased sick leave, but the Workplace Wellness survey shows some business leaders are moving beyond the 'rules' and embedding good practice day to day."

But Astwick said employers increasingly believe workers are taking sick leave when they're not actually sick, with it moving from the number 13th reason for absence to the seventh in the latest survey. 

"It's possible this is one scenario where 'quiet quitting' comes to the fore, with some people making the most of the ability to take time out, just because they can, in addition to working strictly within their allotted hours," he said.  

Astwick added, "The survey showed an increase in people taking leave, to which they are entitled, of up to 5.5 days per employee. This is equivalent to nearly 10 million working days per annum across New Zealand. Given the legislative change in 2021 to 10 days [sick leave] we'll be interested to see whether this increases in coming years."

It's the highest rate of absence recorded since the survey began and the first time the overall result has been more than a working week. The next closest result was 4.7 days in 2014 and 2018. The lowest recorded was 4.2 days in 2020. 

The survey found most companies offer the legislated 10 days per year (accumulated up to a maximum of 20 days), at 80.5 percent of all businesses surveyed. However, 12.2 percent of respondents offer more than 10 days per year. 

 "While having people know they will be supported to stay home when sick is the right message to send, the resulting challenge for businesses in both increased cost and absent staff is substantial for any business to sustain," Astwick said. 

The report also highlights a significant increase in the cost of absence per employee which now stands at $1235, amounting to $2.86 billion per annum. This compares to previous years' Workplace Wellness survey results of between $600 to $1000 per annum with a total of $1.85 billion reported in 2021.

"Factors such as legislation, an expanding workforce and a natural rise in income have also contributed to this, but the money has to come from somewhere. I'm sure there are many leaders who, like me, are having to make some tough calls on operational costs and investing in future plans," he said. 

Causes of employee stress

The survey identified workload and long hours as the leading contenders for work-related stress. While outside the workplace, one of the standout findings is the increase in employees' stress related to 'financial concerns'. Whereas in 2018, 'financial concerns' stood at 41.3 percent across all enterprises, it is now sitting at 62 percent.   

Astwick said it comes as businesses are facing increasing pressure to keep up with benefits such as competitive salaries, health insurance, subsidised transport or free healthy food.  

"Eventually something has to give. There's only so much that businesses can do to absorb these costs before having to pass these on to customers or cutting them loose."

Business is doing the wellness mahi

Astwick said the biggest takeaway from the report is the obvious improvement in the way businesses and organisations are trying to care for their teams and acknowledge the ways they like to work.

"Nearly all organisations see having the opportunity to work from home, where able and appropriate, as a positive move. Many employees are happier to have more flexibility. This is a really interesting area," he said. 

"It's something we offer at Southern Cross, but we have found some employees feel isolated working remotely and struggle to collaborate well. The latter can have a material impact on overall organisational productivity. There's a lot to be said for the genius idea uncovered around the water-cooler. I believe flexible working warrants further exploration."

At the end of the day, Astwick believes New Zealand businesses are on the right track and fully cognisant of their need to support their people.

"Businesses are the backbone of the economy. They generate income, pay tax, drive innovation, and create opportunities for people to grow and to sustain their whānau and communities, but they can't achieve any of this without supporting their people to be well."