Sick leave rates during the economic crisis

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The fear and insecurity of employees mean that economic crisis is often followed by a lower sick leave rate. Research by the Slovenian Institute of Public Health established a positive correlation between health absenteeism and a company in crisis. The research, which focused on three companies in the tobacco, textiles and leather sectors of the Slovenian production industry, showed that planned downsizing and bankruptcy triggered an increase in the sick leave rate.

Research by the Institute of Public Health of the Republic of Slovenia (Inštitut za varovanje zdravja) into the impact of the economic crisis on absenteeism found that those industries reported to be most affected by the crisis also underwent substantial changes in sick leave rates. Analysis of the data showed that there tended to be a significant rise in the sick leave rate immediately before the announcement of downsizing or bankruptcy.

Among the industries that stand out with regard to the sick leave rate are the production industries. Such industries are characterised by:

  • the monotony of the work;
  • low satisfaction in the workplace;
  • prevalence of female workers with a low level of education;
  • continuous stress;
  • a gap between expected and paid wages;
  • a gap between expected and achieved promotions;
  • the large size of companies.

Aims and methodology

The research aimed to test whether:

  • there was a positive correlation between a company in crisis and health absenteeism;
  • there was an increase in mental health disorders in times of crisis.

The research focused on three companies from production industries that were experiencing difficulties during the period of crisis and were facing bankruptcy. These companies came from the tobacco, textiles and leather sectors.

The data used in the research were taken from the Institute’s database of sick leave for the period 1997 to 2008. The collected data were compared with data from the entire production sector in Slovenia. The sick leave rate for all diseases was calculated according to the international classification of diseases.

Findings

At the national level, the employment rate in the production sector did not change significantly; the average sick leave rate between 1997 and 2008 was 5.4%. A drop in the employment rate in 2008 was followed by a rise in the sick leave rate to 6%.

In the period from 2000 onwards, the textile industry was characterised by a constant reduction in production, income, exports and the number of employees. The sick leave rate in 1997 in the textile company from the sample was 6%. This is higher than the average for the entire Slovenian production sector and typical of the textile industry. From 2006 there was a conspicuous rise in the sick leave rate, which had increased by 80% by 2008.

The tobacco company from the sample went bankrupt in 2004, following a takeover by a British tobacco giant. Bankruptcy was announced with the intention of moving production abroad. The data for the number of employees in the tobacco industry show a gradual drop since 2000; in 2001 there was a significant laying off of staff and the sick leave rate dropped to only 4%. Other studies show that fear of losing a job is one of the main reasons for a reduced sick leave rate, yet by the time production ceased, the sick leave rate had risen by 400%.

The data for the leather production company show that the number of employees started to decrease in 1998 and reached the lowest point in 2004. In the preceding year the sick leave rate doubled. The performance of the company began to improve in 2004, resulting in an increase in the number of employees and a drop in the sick leave rate from 11% to 8%. In 2008, when the company went bankrupt, some employees were laid off; the dissatisfaction and insecurity of the remaining employees were reflected in increased absenteeism.

Conclusions

The sick leave rate for the entire production sector in Slovenia was linear throughout the period studied and amounted to 5% on average. In the leather production company, the sick leave rate increased in 2004, coinciding with restructuring and planned lay-offs. In 2008, before the announced bankruptcy, the sick leave rate was at its highest. In the tobacco company there is a noticeable increase in the sick rate in the period 2001 to 2004, when the planned bankruptcy took place.

The sick leave rate due to mental and behavioural disorders for the entire production sector was linear throughout the period. At the time the tobacco company was closing down in 2004, the sick leave rate due to mental health issues increased by 900%.

The research established a positive correlation between a production industry in crisis and health absenteeism occurring when a business is closing down.

Reference

Delfar, N., Nadrag, P., Kofol Bric, N. and Omerzu, M. Spremljanje zdravja v gospodarski krizi na primeru bolniške odsotnosti (268Kb PDF) [Monitoring health in the economic crisis in the case of absenteeism], Ljubljana, Institute of Public Health of the Republic of Slovenia, 2009.

Mirko Mrčela, OHRC

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