The key to a successful and thriving business is well-planned financial management. And for most, this means cutting down on cost by removing unnecessary expenses. Some entrepreneurs would squeeze every penny they have just to cut down on operational overheads. Yet for others, this results in removing employee benefits such as paid time off and sick leave.
While this is a great way to save a huge amount of money in the short-term, denying sick leave is more of a superficial approach rather than a deliberate method. Keep in mind that removing paid sick leave for employees is only penny wise for a short amount of time, but it will cost your business more in the long run.
Offering sick leave to your employees will inexorably benefit your company in many ways you might not even realize. Below are the top 5 reasons why paid sick leave is beneficial for your business.
1. Less absenteeism
According to Bureau of Labor Statistics, almost one in every three private employees and seven out of ten low-wage earners don’t have access to paid sick leave. The data shows that more than 34 million people working in the United States don’t have access to compensated sick days or paid time off to take care of themselves, or their families when someone is ill.
Instead of letting their paycheck suffer, the no-work, no-pay policy force employees to go to work even if they are sick and not feeling well. Even if they are feeling under the weather, employees opt to shrug off physical and mental discomfort worried that they might lose their jobs. This, however, puts your other employees at risk from getting sick as well
- An epidemic, which is a rapid spread of disease can easily affect everyone in the company.
- Offering paid sick leave to allow employees to heal and recuperate in a timely manner.
- It easily resolves minor medical complaints and promotes faster recovery from illnesses.
2. Reduce employee turnover
The great recession affected everyone in the country with more than 6 applicants for every job opening. Taking advantage of the situation, employers demanded everything from their employees. The stringent labor situation resulted in increased worker productivity, lowered hourly rates, incomplete benefits, and reduced privileges, one of which was paid sick leave.
But in today’s tight labor market, the number of job seekers had fallen down to 3 applicants. With fewer applicants available to fill numerous positions, the tables have turned in favor of the workers. Looking for better working opportunities, higher wages, stable companies, generous perks, and attractive benefits, the number of employee turnover is now bigger than ever. In order to retain top talent, as the owner, you need to offer them great benefits including paid sick leave.
- Constantly going through the hiring and training process can deplete your financial resources.
- Retaining employees, however, is more cost efficient in the long run.
- To minimize employee turnover, provide paid sick leave to both hourly and salaried workers.
3. Increase productivity
Just because an employee is present on the job does not mean they are productive and efficient. Showing up to work even when not feeling well only promotes “presenteeism”, or the act of working in a less productive condition. Research from the National Partnership Organization states that unproductive workers cost employers a staggering $160 billion per year due to presenteeism. Which is significantly higher, double the cost, compare to absenteeism.
Remember that happy and healthy workers are productive employees. Forcing them to go to work, even when they are sick, often leads to sloppy performance, and asking them to show up at work wouldn’t let you save money, rather it will cause your company to spend more just to reach the same level of productivity.
- Paid sick leave allows workers to resolve current health issues preventing complications.
- Minor diseases, when addressed immediately, means less time spent at home.
- A team of people with a happy mind and a healthy body boosts company morale.
4. Fewer workplace injuries
One study from the National Institute for Occupational Safety and Health noted that employees with no access to paid sick leave are nearly 30% more likely to be injured on the job than those who are entitled to the benefit.
As a small business owner, these numbers are surprising and alarming. Think about this scenario, what if one of your employees is critically sick and they have no chose but to go to work? What if the employee was seriously injured due to exhaustion while working for your business? If someone filed a claim against your company, this could cost you literally thousands of dollars.
- Occupational hazards should be assessed regularly and avoided at all cost.
- A high number of workplace injuries suggest a higher insurance premium.
- A bad safety record will tarnish your companies reputation.
5. Avoid unnecessary health care costs
Last but not least, offering paid sick leave helps you avoid unwanted healthcare costs. Most states require that you offer health care coverage but rates differ depending on your business, the number of employees, and occupational hazards. If you want to avoid paying exuberant amounts of healthcare premium for your employees, you need to make their health and wellbeing a top priority.
Paid sick leave allows them to access primary health care whenever they need it. This means going to the doctor and checking minor ailments before they become worst, or resolving undiagnosed problems before they turn into serious conditions.
- Always remember that prevention is important, when it comes to medical care it’s best to be proactive instead of reactive.
- Prevent the onset of early sickness by conducting an annual physical examination.
- Let employees take paid time off to care for their families when in need.
There’s more to paid sick leave rather than attracting employees for better benefits. As an entrepreneur, make sure to include it on your perks not just to entice workers but to provide a safe and healthy working environment. After all, it benefits them as your employees, your company by reaching targets, and you as the owner meeting business objectives.