The effect of sick leave on the finances and operations of Swedish municipalities
Introduction
Sick leave in municipal operations affects staff, finances, and the quality of public services. This report analyzes the development of sick leave between 2023 and 2024, focusing on 10 Swedish municipalities with higher and lower figures and their economic impact. According to SKR’s reporting, the weighted average for 2024 has decreased from 7.5% to 7.4%, but at the same time, the gap between municipalities with the highest and lowest sick leave rates has widened.
This report is not intended to label municipalities as good or bad but rather to highlight both successful examples and the challenges across the country. Where there are challenges, there are also great opportunities. I am confident that in a year or two, we will read about remarkable transformations in municipalities currently experiencing high sick leave rates.
To calculate the economic consequences of changes in sick leave, we have assumed that each sick day costs the municipality SEK 2,500. This figure is based on a combination of direct costs, such as sick pay and employer contributions, and indirect costs, including lost productivity, substitute staff costs, and administrative handling. In municipal operations, where absences often need to be covered by substitutes, these costs can be particularly high, and it is reasonable to argue that SEK 2,500 is an underestimate. A common benchmark is that a sick day costs between SEK 1,500 and SEK 3,500, depending on the profession and type of operation.
Comparison of Sick Leave in 2023 and 2024
The five municipalities with the highest sick leave in 2024:
The five municipalities with the lowest sick leave in 2024:
Economic Consequences of Changing Sick Leave
Calculation Method:
Number of employees per municipality: Data sourced from SKR’s 2023 personnel statistics.
Cost per sick leave day: SEK 2,500.
Actual annual working hours per employee: 45 weeks × 40 hours = 1,800 hours.
Total working hours per municipality: Number of employees × 1,800 hours.
Sick leave hours: Total working hours × sick leave percentage.
Sick leave days: Sick leave hours ÷ 8 hours.
Total sick leave cost: Sick leave days × SEK 2,500.
Cost change: Difference in total cost between 2023 and 2024
Municipalities with increased costs due to higher sick leave:
Municipalities with cost savings due to lower sick leave:
Total savings for these four (relatively small) municipalities: SEK 13,112,500
How Sick Leave Affects Municipal Operations
High sick leave leads to:
Higher costs for sick pay and substitutes.
Increased workload for remaining staff.
Reduced continuity in healthcare, education, and elderly care.
Increased risk of stress and burnout among employees.
Lower quality of municipal services.
Positive Effects of Reduced Sick Leave
Lower personnel costs – Municipalities save on sick pay and substitute staff.
Higher productivity – More staff present improves service quality.
Better work environment – Less stress for employees.
Improved service quality – More stable staffing in schools, healthcare, and elderly care.
Employer branding – Lower sick leave makes the municipality more appealing to job seekers.
Largest Changes in Sick Leave (2023–2024)
Largest Increase in Sick Leave
Largest Decrease in Sick Leave
Conclusion
Sick leave varies significantly between municipalities and impacts both the economy and the quality of municipal services. Municipalities have different socioeconomic conditions that influence sick leave rates. Other factors also play a role, but it is clear that a well-structured internal system and systematic follow-up process based on care provide a solid foundation for improvement. Municipalities that have successfully reduced sick leave have not only saved large sums in personnel costs but have also improved the work environment and operational stability. Lower sick leave contributes to a more sustainable work environment, reduces the risk of burnout, and enables better services for residents, whose tax funds can be used for other value-adding initiatives.
Municipalities where sick leave has increased face greater economic and organizational challenges. Higher sick leave rates result in not only direct costs such as sick pay and substitute staff but also indirect effects, including reduced operational continuity and increased workload for remaining staff.
Key Building Blocks for Reducing Sick Leave:
Positive Work Climate – An open and supportive work environment makes it easier to identify issues early and promotes employee well-being.
Dare to Invest – Health investments can generate significant economic benefits by reducing sick leave costs and increasing engagement.
Systematic Approach – It may seem dull, but consistently following established processes improves the work environment and reduces injuries and sick leave. A systematic support system helps highlight managers who are fulfilling their responsibilities and those who need more support to initiate proactive efforts.
Measurement and Analysis – Continuously measuring and analyzing sick leave rates helps identify risks and take swift action.
Proactive Management – Early conversations with employees help prevent long-term sick leave by addressing issues before they escalate.
Encouraging Physical Activity – Regular physical activity strengthens health and prevents illnesses, which can help reduce sick leave.
Providing Managers with the Right Tools – Managers need knowledge and digital support to have a fair chance of working preventively and, as much as possible, preventing illnesses or workplace accidents.
You can find SKR's sick leave report here: https://skr.se/skr/arbetsgivarekollektivavtal/uppfoljninganalys/personalstatistik/sjukfranvaroredovisningen.46608.html
Marc Blomgren, Sales Executive Aino