The average cost of absence per employee is estimated at £434, costing British business a total of £10.7 billion when projected across the entire workforce.

According to the survey, employers believe that most absences are due to genuine sickness. But long-term physical illness is seen as the most significant cause for manual employees, while stress and recurring illness are cited as more common among non-manual employees. Other reasons for absence include home and family responsibilities and poor workplace morale.

Most absences are short-term (80 per cent) but the greatest impact comes from the other 20%. Long-term absence accounts for more than forty per cent of total working time lost due to absence each year.

Absenteeism varies widely between employers: the best average just 4.6 days per employee, while the worst lose an average of 10 days per employee. Low rates of absence are seen where senior managers are involved in absence procedures.

Susan Anderson, CBI Director of Human Resources Policy, said: "Absence rates are lower than they were ten years ago but it is worrying that there's such a big gap between the best and worst performing organisations. Our survey shows that the most effective approach is for an employer to tailor their HR policies to the actual causes of absence in their particular workforce."

Dudley Lusted, PPP healthcare's Director of Corporate Healthcare Development, said: "Too many companies are still failing to manage their people-risks properly. It's crazy to pay people not to work when the tools to safeguard their wellbeing and manage sickness absence are so well established."

The complete report,provided by the CBI, can be viewed on C.B.I. absenteeism survey