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Small businesses warned over sickie impact

Tuesday, 25 October 2011 | By Michelle Hammond
Start-ups are being encouraged to preserve their health and that of their employees, after it was revealed the average Australian takes almost 10 sick days a year.

 

According to a survey of 250,000 people, by absenteeism management consultants Direct Health Solutions, absenteeism fell to 9.4 days last year, from 9.9 in 2009.

 

On average, workers spend 4% of their working time on unplanned leave, which translates into $3,619 per employee every year.

 

The survey reveals absenteeism is most common in the healthcare industry, where workers notched up 11.9 days absent a year, followed by banking, finance and insurance.

 

Unexpected illness is the most common cause of absenteeism, although the survey found an increasing number of employers believe an “entitlement mentality” contributes to absenteeism.

 

John Toomey, chief executive of Global Wellness, says business owners are more likely to fall ill because their business overrides other priorities, including their health.

 

“For many, a business can become the central focus of a person’s attention… It is their life’s biggest creation, and their passion and excitement see them immerse themselves in it,” he says.

 

“This can become so overriding that there is not enough attention left over for basic needs like good food, exercise and personal care. Often, the mixture of excitement and worry infringe on sleep time.”

 

But according to Toomey, trying to run a start-up while key staff are sick has the potential to bring the business to its knees, particularly if that person is the business owner themselves.

 

“When a key player in business becomes sick or incapacitated, it can be devastating,” he says.

 

“If you are the central figure in your business, a bout of illness can take you out of the picture, leaving your prized customers… looking elsewhere to get their needs met.”

 

John Downes, director of the Business Development Company, says start-ups need to think about how their business would survive if they were to take sick leave.

 

According to Downes, start-up owners who fail to delegate tasks risk “becoming” the business, which is unsustainable if they fall ill.

 

“It will take discipline for you to take that step back, but you must remain consistent… Your business needs to be able to function without you,” he says.

 

Toomey says start-ups should consider “key man” policies, which are insurance policies designed to protect the business from losses if one of the key players were to become ill.

 

“My question to them is, ‘What are you doing to minimise your risk and keep these people healthy and well so that you do not ever have to pay out?’ Surely if you take some action in this area, you’re really taking the next step toward insuring the clients’ risk,” Toomey says.