What is the cost of sick leave to a business?

Providing employees with sick leave can prove to cost the organization substantially in terms of financial resources as the worker on sick leave is paid while at home. This also includes those employees who may be away from work to attend a family member who is unwell. Nowadays professionals at the workplace are beginning to take doctor notes as their companions so as to be able to take some days off as businesses as well as companies do greatly overlook that area in their corporate mandate. However, with more advanced accounting systems emerging these days and vigor financial analysis being undertaken during audits, it is almost impossible to overlook such occurrences as the more frequent they become, the more the business loses money. Businesses that have no allocation of resources to cater for sick adequately to realize during harmonization into the end year financial results that a lot of resources were spent for services not rendered.

A wise business owner is one who will ensure that he has installed a system in place that will be able to track all the illnesses of the employees who work in the organization and this will provide the management with an idea of how the workers use the leaves they are granted. Once proper measures have been instituted in the company structure to alleviate this problem, the indulgence in unauthorized leave of sickness will be curtailed, translating to reduced cost of sick leave.

Stock Photo by Sean Locke www.digitalplanetdesign.com

The usage of the fake doctor notes by company staff has become a major trend in the workplace, and this is another cause for concern as staff can easily maneuver across the procedural requirements for attaining such permission and go unnoticed.

For small businesses the cost of sick leave may make their products uncompetitive as they will be forced to pass it down to their consumers. This in turn has a negative effect on their ability to attract new clients as their products will compete unfavorably due to the higher price in comparison to larger firms that can accommodate such an expenditure without passing it down on their products. For instance a small restaurant owner will feel the cost while a large multi-national company will not even flinch as the money foregone to pay for workers on leave is insignificant to what they are making.

As much as the cost of sick leave is hyped as being burdensome on business people, this argument is not entirely true In reality a good number of businesses have confessed that it barely raises their normal expenditure by one percent. But a worrisome habit of people in the workplace more recently is faking their sicknesses so as to get a reprieve from toilsome work.

Often during managerial policy making in businesses, there tends to be a lot of focus on strategic issues while paying blind attention to cost cutting inefficiencies that seem insignificant, but are a source of loss of money that could have been directed into producing.

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