Measuring the Illness-Related Absenteeism — Can Bradford Factor Approximate the Indirect Cost of Illness

Abstract

In the management of human resources, the absences are monitored with
Bradford Factor (BF) using the number and length of sick leaves. The sick
leaves are also measured in health technology to assess the impact of health
technologies on product loss, aka indirect cost (IC). Linking the BF and IC
might promote BF as an outcome measure and facilitate the estimation of IC.
We simulate a single company operation in several scenarios describing the firm’s
functioning and adjustments to workers’ absence. We measure the BF and the IC
due to absence and relate them with econometric modelling. Results show that
BF and IC are associated in a non-linear way; hence, IC cannot be calculated
from BF in a simple manner. The association is strongest for possibility to
adjust to worker’s absence, and a high elasticity of substitution between workers.
Therefore, the possibility to proxy IC by BF is rather limited.