The Cost of Time Off Work in Australia

Abstract

It is widely accepted in Australia that absenteeism costs Australian employers billions of dollars each year. In part this stems from the view that a large majority of the Australian workforce use their full sick leave entitlement each year, and from crude 'back of the envelope' estimates provided by employers and sensationalized in the media. In this article an attempt is made to quantify the costs of absenteeism to Australian industry in a more rigorous manner. In particular, data collected by the Australian Bureau of Statistics is used in conjunction with survey data collected by the author from a sample of both employers and employees. Given a number of assumptions it is concluded that absence from work cost Australian employers just over $7 billion during 1990.