The Centre for Economics and Business Research (Cebr) has found that long-term sickness absence (absences of six months or more) is costing businesses approximately £4.17 billion a year.
Mental illness is crippling UK workforces
The business research group was commissioned to create the report by employee benefits provider Unum, with the Cebr finding that the cost of long-term sickness has increased from £3.13 billion in 2012, and is expected to rise by £4.81 billion by 2030 – a 15 per cent increase.
Mental illness is the most common type of absence found in UK workplaces, accounting for around a quarter (£1.17 billion) of the total cost to the private sector.
How can SMEs protect themselves from these costs?
The Cebr has found that stepping in early to provide support at the first signs of a health problem is the best way to avoid losing out on valuable capital.
Their research has found that actively using early intervention services such as vocational rehabilitation can reduce the average length of absence by 17 per cent for all conditions, with those with mental health conditions seeing the biggest impact with a reduction of 18%.
Using services such as Group Income Protection (GIP) and associated early intervention services can result in an estimated £3.95 billion being returned to businesses. This means that for every £100 an employer spends on a GIP policy, they get £66 back.
Employee illness has a ‘direct impact on the bottom line’
Peter O’Donnell, Chief Executive Officer, Unum said:
‘‘To avoid these preventable business costs, employers should implement a strategy which mitigates the impact of sickness absence,’’ explained O’Donnell.
‘‘An effective way to do this is through early intervention services which help employers step in when employees show the first signs of having a health problem, and often come as part of a Group Income Protection package.’’
“Ensuring your employees are healthy and happy isn’t just the right thing to do – it also has a direct impact on the bottom line. Smart businesses should provide their employees with these early intervention services as part of a Group Income Protection plan and, more importantly, ensure that employees take advantage of the services on offer to them.”