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According to ONS data, in a private sector organisation with 50 employees the average cost of managing workplace absence comes to £4.8k per year. With huge cost implications, why are so many Manchester SMEs failing to tackle such a basic HR issue? The truth is, faced with limited resources and declining budgets, leaders sometimes view HR support as a luxury rather than a value-added service. In fact, if you don’t have the budget, you don’t have to commit to retained HR support. Pay-as-you-go HR services are ideal for accessing support and advice to manage one-off incidents, such as cases of persistent absence.
In reality, the way businesses choose to manage workplace absence has a direct effect on their employees’ personal motivation and productivity. When a team member is off sick or on long-term absence, the burden of their workload falls on their colleagues. Employees showing signs of repeat and persistent absence can have a hugely detrimental impact on team morale, motivation and happiness at work.
In this article, we explain the key changes to Statutory Sick Pay from April 2026 and how these will affect small businesses. We explore the big risks of poor absence management, the reasons for rising absence rates and how good people management practice can drive down costs.
Statutory sick pay is changing
In the first phase of reforms under the Employment Rights Act, from 6 April 2026 all workers will be entitled to either 80% of their usual earnings, or the flat Statutory Sick Pay rate, whichever is lower, from the first day of absence.
Currently, Statutory Sick Pay is only payable to workers who earn at least the lower earnings limit (LEL) on average and only once the worker has served three “waiting days” (days they would normally have worked but have been missed due to sickness). The new legislation will remove the requirements to earn the LEL and to serve three waiting days before receiving SSP.
The change presents challenges for businesses with employees on sick leave on the implementation date. Please get in touch for specific guidance for your business.
With these changes, it becomes even more important for employers to take steps to minimise sickness absence by taking charge of things within their control. This could include keeping a close eye on workload and working conditions to avoid burnout, implementing robust measures to prevent employees from feigning sickness and managing long-term absences to ensure a smooth and swift return to work.
Employee absence is increasing
The average duration of employee absence has been rising since 2020. In 2025, the UK recorded its highest level of absence in 15 years at 9.4 days per employee, compared to 5.8 days in 2020. This equates to a 4.1% loss of working time.
Watch our MD, Charlotte Dean, discuss the problem of high absence rates in this short video
Looking at the private sector, SME employees lose an average of 9.1 days to absence each year. Based on these numbers, new SSP obligations could place a strain on small business budgets. Can your business afford the rising costs?
The situation raises two big questions:
1. Why is workplace absence rising so rapidly?
2. Are businesses failing to manage absence effectively?
Let’s look at both these questions in more detail.
Are people getting sick more often?
According to the CIPD Health and Wellbeing at Work report, the top three causes of short-term illness in the UK are:
Minor illnesses, e.g. flu, stomach upset, migraine
Mental ill health, e.g. depression or anxiety
Caring responsibilities.
As for long-term illness, the top three causes are:
Mental ill health, e.g. depression or anxiety
Musculoskeletal injuries, e.g. back, shoulder, neck pain
Long-term health conditions.
Stress is the fourth most common main cause of both short- and long-term workplace absence. Mental health conditions are more common and more openly discussed today than five years ago. This is one of the reasons why we’re seeing businesses choosing to focus resources on employee health and wellbeing support. Investing in wellbeing support as a preventative measure makes sense, however, at P3 we realise good absence management practice can be equally as effective in reducing absence rates and maintaining a happy, healthy workforce.
Tackling presenteesim
A rise in presenteesim (people who attend work despite feeling sick, stressed or unwell) may also be affecting workplace absence rates, due to:
The spread of illness
The impact on colleague workload and morale when the presenting employee is unable to fulfil their responsibilities or their work quality declines.
Managers need to be able to spot the signs of presenteeism and act on them.
The risks of poor absence management
If your business has experienced a rise in employee sickness and absence over recent years, this could be as much to do with people management practice as illness and presenteesim. Failing to deal with employee absence exposes small businesses to unnecessary risks, in addition to the rising costs associated with sick pay. In short, the longer an employee is away from work, the greater the cost to your business.
Missing management skills
Managers need the skills to question and understand the reasons for each individual absence. They need to have the confidence to tackle persistent absence quickly, and to be clear and consistent in their approach. To do this, managers need to know their responsibilities and have easy-to-follow guidelines. For example, where a team member is persistently late starting work, the manager should have a conversation with the employee as soon as they spot the recurrence. Ignoring it will allow the problem to escalate. A 15-minute conversation today could nip it in the bud and help find a solution that satisfies both parties.
Cultural and reputational repercussions
Poor absence management may have cultural and reputational impacts that harm a company’s long-term ability to attract and retain talent.
If managers do not receive adequate absence management training and guidance, this could add to an employee’s reasons for being absent, forcing them to stay away from work for longer than necessary. At the same time, this may impact on colleagues who have to shoulder the extra responsibility and workload for longer. Likewise, if employees don’t have clear processes to follow when reporting an absence, managers won’t have the data to spot problems and issues.
Poor absence management recording
On the subject of data, effective recording of absence is an essential part of good management. As teams grow, online systems and tools show their value. Systems will grow alongside your business and allow more efficient monitoring and management. The data will tell clear stories over time, providing visibility of repeat absence and persistent offenders, allowing managers to identify issues and better support their teams.
Legal and compliance exposure
Every SME should have a clear, up-to-date sickness absence management policy and procedure to follow in the event of employee absence. If you haven’t begun to review and amend your policy in line with forthcoming Statutory Sick Pay legislation, you could be exposing your business to the risk of non-compliance. Managers must have access to current guidelines to properly support their team’s health and wellbeing.
All people managers need to:
Understand current absence management policy and procedure
Know their role in managing employee absence, what to do and when to act
Feel confident having difficult conversations about recurring absence
Recognise the signs of a struggling colleague and signpost wellbeing support
Have the tools to manage performance issues in a calm, effective manner.
Is your SME at risk?
When it comes to managing workplace absence, early intervention is key. Managers need to understand current legislation and know how to handle every instance of absence with consistency and confidence, not just repeat or long-term absence.
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