How illegitimate sick leave affects SMEs


The fact that Aussies love the beach is undisputed worldwide. What is concerning, however, are the potential business impacts, with a survey of 2000 adults, undertaken by Finder.com.au, revealing that one in seven (14%) have cashed in their sick leave to get some sun and hit the waves. 

Every time an employee decides to fake an illness or miss work for an illegitimate reason, the business feels the effect of it. While to the individual it may seem like just a few hours, the business is losing money for an unproductive reason and if it happens enough within SMEs, these hours add up.

14% of Australian workers equates to over 1.6 million adults, each racking up a cost of around $380 per day. This absenteeism adds up big time. In fact, when you do the maths, that’s an enormous $645 million blow to the economy.

If we examine the demographic breakdown of this data, we can see that women (15%) are slightly more likely than men (12%) to fake an illness and go to the beach. Even more interestingly, despite their reputation for traditionalism, 8% of baby boomers are guilty of it too. However, this is compared to an enormous 20% of generation Y and 15% of generation X.

While some businesses do encourage and allow for the use of sick leave under personal or carer circumstances, the assumption is almost never that personal leave should be wasted on a beach day. However, many have made this mistake before and lost their jobs for it (you only have to google “Employees fired for Facebook posts” to come across some winners – here’s a good one to start you off).

Small businesses, especially ones with employee counts of under 100, certainly feel the absence of their staff when they’re away. One day away from work is approximately eight hours and the business loses not only money, but productivity and efficiency whenever this happens.

At the end of the day, sick leave is for being sick. Instead of using it and costing small businesses millions of dollars, Australian businesses would be much better off if Aussies used their leave the way it was intended.

A few ways to help conquer this issue:

  • Encourage employees to take out income protection insurance. However, depending on the policy, waiting periods can range from 14 to 720 days.
  • Remind the team to read the fine print of their employment contracts. If done in a non-threatening way, this should remind them of the personal and professional risks of wasting sick leave.
  • Promote team rapport by suggesting initiatives such as flexible work hours, offsite strategy days or the option to work from home if feeling unwell.

About the author

BessieBessie Hassan is a Money and Travel Expert at financial comparison site, finder.com.au.