The annual cost of workplace absence in the UK in 1999 rose to £10.5bn. This is equivalent to £438 per worker, a slightly above-inflation rise of £12 (3%) on 1998.

This is the main finding of the latest annual survey by the Confederation of British Industry and PPP Healthcare. In 1998, the total cost was £10.2 billion, an average of £426 per worker.

The figures are crucial, as absence represents a huge cost to UK business. Poor performing firms regularly record levels of absence twice as high as those of more successful firms. There may be a "chicken and egg" question over the figures, but the difference remains significant.

John Cridland, CBI''s Human Resources Policy Director, says "Most absence is caused by genuine minor illness, but it is important for firms to ensure unnecessary absence is reduced – benchmarking performance against similar firms will reveal problem areas. One clear message from the survey is that absence needs to be actively managed at a senior level. It is only by understanding the causes of absence that managers can design the right policies to tackle this important issue."

Dudley Lusted, of sponsors PPP Healthcare, adds "It is clear that absence management needs to be more sophisticated. Long-term absence and stress-related problems are ranked worryingly high as causes of absence. Companies that fail to recognise and manage the underlying issues of absence will never reach the 5.3 days absence levels achieved by the best-performing companies."

Companies who have reduced absence time have initiated monitoring programmes such as return to work interviews, and placed the management of absence under senior HR or business managers.

In general small firms had lower absence rates than large firms. On average around nine days were lost per employee amongst those companies with more than 500 employees. Companies of under 50 compare very favourably, losing just 4.8 days per employee.

In another interesting comparison, private sector employees took, on average, 2.8 days fewer than their public sector counterparts – who averaged 9.9 days absence per employee.

A complementary survey by the TUC revealed that 500 people leave employment permanently every week because of work-related injuries or illness. TUC General Secretary John Monks said the number of people whose working lives were ended by Repetitive Strain Injury (RSI), back strain or stress was particularly "alarming". The TUC are worried that future problems with RSI could present significant problems for business.

The TUC have said that there should be a new legal duty on employers to develop a back-to-work policy to help workers on prolonged sick leave.