§ Gillian MerronTo ask the Secretary of State for Trade and Industry if he will make a statement on how employers manage absences. [156752]
§ Mr. ByersThe Green Paper, "Work and Parents:Competitiveness and Choice", indicated that my Department would be undertaking research on how employers manage absence.
In the absence of that research, the costing of policy options considered in the Green Paper made an assumption about the cost to employers of covering for absences. The specific assumption made was that the cost of a week's absence to an employer was 24 per cent. of labour costs.
Information gathered during the consultation process and emerging findings from research commissioned by my Department, suggest that this assumption was too high. It is important to distinguish situations where an employer covers absence by taking on a temporary replacement from situations where the employer manages absences by internal reallocation of work. The costs of each will be different. Where a temporary replacement is hired, the employer faces the one-off costs of recruitment. In contrast, if work is reallocated, there are no recruitment costs but there are likely to be recurring costs to the business. The decisions employers take on how to cover for any specific absence will depend upon the length of the absence, its nature (whether planned or unplanned), the size and nature of the business, and the skill level the post requires.
The partial regulatory impact assessment (RIA) given in answer to question number 156754 explores these issues further. Full details are given in Annexe 2 of this RIA.