Precautionary actions within small and medium-sized enterprises

Absenteeism results in considerable costs, both for individuals, firms, and governments. One of the ways in which firms can reduce absenteeism is by taking precautionary actions, that is, improving the physical or mental working conditions of their employees. This study examines the decision-making process of small and medium-sized enterprises on whether to take precautionary actions. The main hypothesis is that firms are more likely to take precautionary actions if they assume that absence rates are related to working conditions. Several hypotheses were derived, and information on more than 600 Dutch enterprises was used to test them. The results indicate that the probability of taking precautionary actions increases with the occurrence of physical complaints, the assumed proportion of employees whose tasks are physically demanding, and firm size. The main hypothesis was, however, rejected.