Workers are taking fewer days off due to sickness and ill health but stress and anxiety levels have risen by more than 20 per cent in two years.

Research by Business New Zealand and Southern Cross Health Society found workers were absent for an average of 4.4 days in 2016.

That was down from 4.7 days in 2014 but still cost employers around $1.5 billion for the year.

Manual workers were more likely to take time off than non-manual workers while public sector workers took an average of 2 to 2.5 more days off a year than private sector workers.

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The report found a typical employee cost $600 to $1000 a year in absences adding up to a $1.51 billion hit to the economy - up from $1.45 billion in 2014.

Illness was the biggest reason for workers taking time off, followed by caring for an unwell family member or dependent, and injury.

But more than 10 per cent of absenteeism was thought to be caused by people taking a sick day when they were not actually sick.

Despite more businesses encouraging people to take time off when sick, on average more than 40 per cent of staff turned up to work when sick.

The research also found stress levels had risen a lot in the last two years.

A net 22.9 per cent of employers surveyed noted an increase in stress in the last two years and for larger companies - those with more than 50 staff - it was even higher at 30.5 per cent - more than double the 14 per cent recorded for those with fewer than 50 staff.

General workload was found to be the biggest cause of stress in both larger and smaller businesses in 2016.

That was a change for smaller businesses where family relationships was seen to be the primary issue in 2014.

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A growing number of smaller businesses were also recording long hours - rising from 8.1 per cent to 22 per cent in 2016.

Kirk Hope, chief executive of Business New Zealand, said the rise in stress levels was a cause for concern.

Hope said New Zealand businesses were seeing unprecedented demand for goods and services in the wake of the signing of the free trade agreement with China.

"Economic growth is a good thing. Demand is a really good thing. But there are consequences."

Hope said skill shortages were putting pressure on businesses and he also pointed to the major earthquakes which have affected Wellington and Christchurch as being drivers of increased stress.

"It is very easy to underestimate the mental health impact of the earthquake in Wellington and the ongoing impact in Christchurch."

There were still some 80 workplaces in Wellington that people were not able to enter yet since last year's major earthquake in November.

Hope said Business New Zealand would be running workshops around the country using the research from the survey to help businesses identify stress in the workplace, what was causing it and what could be done to reduce it.

That could range from providing counselling to greater workplace flexibility.

"We would certainly like to see it come down."