Small and Micro-Businesses Expect Highest COVID-19 Sick Day Costs

We saw a light at the end of the lockdown tunnel in June and July, as retail and hospitality venues began to reopen and offices welcomed back staff. But stricter restrictions have been implemented nationwide and areas including the north west and Midlands are in local lockdowns.

On Monday 5^th October, the UK government reported 12,594 new cases, the highest number of confirmed cases in a single day. The data also shows 368 people on ventilators, the highest figure since June.

Businesses are once again facing the possibility of workers isolating if they test positive or come into contact with a COVID-positive person. Most office employees will be able to work from home if they feel well enough, which will help mitigate the potential for sick days.  

One industry facing an even bigger challenge is the struggling hospitality sector, as staff cannot work from home. Co-workers of people who test positive could be required to self-isolate and venues may even close down. 81% of all hospitality organisations are micro-businesses, with 16% classified as small and the remaining 3% medium to large. There is a fear within the sector that sick days could bankrupt many of these smaller venues.

These businesses can put in place a number of measures to mitigate risk, including:

• Strict social distancing
• Reduced office or venue capacities
• Personal protective equipment for staff, including microfibre cloths or face visors

How much do sick days cost employers in the UK?

The average number of sick days workers in the UK take is 4.4. With the average salary of all workers in the UK standing at £29,009 in 2019 (ONS), that works out at £490.92 per employee, per year. This works out by business size as:

Coronavirus sick days

Of course, these figures don’t take into account the impact of the current COVID-19 pandemic.

In its weekly report on 2^nd October 2020, the ONS estimated that 116,600 people had COVID-19 at any given time between 18^th–24^th September. This equates to about 0.17% of the UK population. The overall employment rate currently stands at 64.2% of the UK population, or 32.98 million people. If we understand that 0.17% of all people in employment had coronavirus, this means 56,066 workers were potentially infected during this time frame. This gives us a general picture of how many people could be infected in the workplace at any given time.

Small and medium-sized enterprises (SMEs) account for 60% of all employment, meaning around 33,639 potentially infected people were working for these organisations. This works out at less than one employee per business within the micro and small sectors, and around two employees per business within the medium business sector. With 40% of employment held in large business, the remaining 26,568 infected workers have a smaller number of firms to be shared out across—resulting in an average of three potentially infected workers per large business.

We know that self-isolation is mandatory for anyone who tests positive for coronavirus. The current isolation period is 10 days from the date symptoms first started. They may be able to work from home, of course, depending on their job and the severity of the symptoms.

We’ll average this out across all business sizes and estimate that, at every organisation, one employee calls in sick for the full period of isolation. This requires, on average, seven business sick days.

COVID-19 will cause sickness days to rise across businesses of all sizes but will be most acutely felt in micro-businesses. Their sick day costs are projected to rise by over 45%.

COVID-19 impact on the hospitality sector

The hospitality sector is already feeling the pinch from the 10pm curfew and the reduction in households mixing. The sector employed 3.2 million people directly and 2.8 million indirectly before the COVID-19 pandemic, making it the third-biggest employment sector.

With micro-businesses making up the majority of the sector, these organisations are facing a unique challenge. Around 2,452 people who were potentially infected during the specified timeframe were working for micro-businesses in hospitality. Frontline workers who test positive or come into contact with someone who is COVID-positive must take sick leave. And, as we’ve seen, positive tests can sometimes result in the full shutdown of an establishment.

All businesses, but particularly those in the heavily restricted hospitality industry, can mitigate these risks by implementing COVID-secure measures in the workplace. Standard personal protective equipment like hand sanitiser will be useful for all businesses. Those in the hospitality sector with staff that come into closer contact with customers can add items like face visors and dividers between tables.