The cost of sickness absence to a small employer

Key takeaways

The cost of sickness absence to employers is the pay for time not worked plus the cost of covering or delaying the work. The ONS reports that UK workers lost an average of 4.4 days to sickness in 2024, a 2.0% absence rate. In a small team, the backlog and cover usually cost more than the sick pay itself.

• 4.4 days per worker were lost to sickness in the UK in 2024 (ONS).
• 2.0% of working hours were lost to sickness or injury in 2024.
• Statutory Sick Pay is £123.25 a week or 80% of earnings, whichever is lower.
• Managed outsourced teams include sickness cover in the rate.

How much sickness absence should you plan for?

According to the Office for National Statistics (ONS), the UK sickness absence rate was 2.0% in 2024, with 148.9 million working days lost, an average of 4.4 days per worker. Absence varies by role and person, so use your own records where you have them and the ONS figure where you do not.

• In-house vs outsourcing: which model is more cost-effective?

What does sickness absence cost an employer?

Absence costs in three ways: pay for time not worked, the cost of cover, and the cost of work delayed or lost. Employers must pay at least Statutory Sick Pay, currently £123.25 a week or 80% of average weekly earnings, whichever is lower, for eligible employees; many pay full company sick pay for the first days.

• Pay: statutory or company sick pay for days not worked.
• Cover: overtime, temps or a manager stepping in.
• Delay: backlog, slower replies, missed sales or bookings.

• Holiday and sickness cover for small teams

What does a worked example look like?

A £28,000 employee costs about £138 per working day in employment costs. At the ONS average of 4.4 days, full company sick pay costs about £610 a year. If a colleague covers at overtime rates of about £25 an hour for half those hours, add around £410. Missed replies or bookings come on top.

Across a team of five, that is roughly £5,000 a year before any lost sales, and one longer absence can multiply it.

Why does absence hit small teams hardest?

In a team of one or two, there is no one spare to cover. The work stops, or the owner does it. Customer-facing work suffers most, because enquiries and calls do not wait. That is why cover, not sick pay, is the main cost for small businesses.

• Key person dependency: when one person holds it all

How does outsourcing handle sickness?

A managed provider covers sickness within its team, so the service continues at the agreed level. You do not pay extra when someone is off, and you do not have to find cover. Ask how cover works and what the service levels are during absence.

• Business continuity for outsourced operations
• BPO Solutions for UK businesses

How can you reduce the cost of absence in-house?

Cross-train at least two people on every critical task, keep procedures written down, and have an overflow option for customer-facing work. Supporting staff wellbeing also matters: the Health and Safety Executive treats work-related stress as a risk employers must manage.

• Small team burning out? Capacity is the fix

How should you record and review absence?

Record every absence with dates and a reason category, in one system rather than in emails. Review the pattern quarterly: frequent short absences, absence clustered on certain days or rising absence in one team are signals to act on, often by talking to the person and checking workload.

• In-house vs outsourced HR admin for small firms

What does this look like in practice?

A pattern we see in UK clinics: when the one receptionist is off sick, calls go to voicemail and the practice manager spends the day on the phone. An outsourced overflow line keeps appointments being booked when the front desk is short.

• Admin and reception outsourcing for UK clinics
• See client work

Absence cost checklist

Use these steps to cost absence.

• Record days lost per person last year.
• Cost sick pay at your policy rate.
• Estimate cover hours and their cost.
• Estimate work delayed or lost.
• Add the total to your in-house cost comparison.

Next step

Tell us how your team covers absence today. We will cost it and show what a managed overflow or cover option would cost in a 30-minute call.