It costs British business 23 billion GBP a year - 533 GBP per worker. And 40 per cent of firms surveyed recently said it has increased over the last three years. What is it? Sickness absence.

Staff in companies with under 100 employees take, on average, only half as many days off as those in larger organisations, but the impact on a smaller business can be devastating. The question for managers is how to walk the line between sympathy for the genuinely ill, and firm treatment of persistent "sickie-takers" or malingerers.

Most have been spurred by the increase into much greater vigilance. Computerised personnel records make it possible to track both the size and the cost of absence, and to pick up trends such as staff frequently taking Mondays and Fridays off. Many organisations have adopted return-to-work interviews - partly to ensure that the employee concerned is genuinely fit to return, partly to deter the skivers. The interview can also be used to make staff aware of the strain their absence puts on their colleagues, and the impact on the firm as a whole.

One building society has found that introducing flexible working, generous holiday entitlement and - more controversially - a bonus of 100 GBP for full attendance reduced absenteeism to 2 per cent. A London borough has taken the opposite tack, and makes employees pay for sick leave if they exceed certain limits.

Most HR managers argue that a combination of carrot and stick is the best approach, and that it’s at least equally important to seek the underlying cause of the problem. The employee may feel his or her work is either not challenging enough, or overloaded, or there may be undisclosed difficulties in working relationships or at home.