The Institute for Public Policy Research (IPPR) is calling on government to introduce tax incentives for companies that commit to “significant” improvements in the health of their workforce as the costs of poor workforce health has soared to £103bn a year.
The think tank also wants compulsory reporting on worker health and tighter regulations to ensure employers are doing no harm towards employee health outcomes.
The IPPR’s call follows its analysis which found the annual hidden cost of employee sickness had risen by £30bn since 2018 when it was estimated at £73bn.
The think tank attributes around £25bn of this increased cost to lower productivity with around £5bn due to a rise in sick days.
Today’s paper, the final interim report from the cross-party IPPR Commission on Health and Prosperity, put forward the argument that health and work can interact in a vicious or virtuous circle – with the UK suffering from the former today.
Consequently, IPPR is calling for a pro-business health plan which reimagines the role of business in health, clamping down on businesses that harm health and scaling up businesses that create good health, to deliver a healthy future of work for all.
The think tank argues this would help the new government achieve health, prosperity and economic growth.
The plan includes:
- Incentives: A new tax incentive for companies that commit to significant improvements in the health of their workforce, including the security, flexibility and pay of their staff, focused on SMEs.
- Regulation: A new do no harm duty for employers, regulating them on health outcomes, not just safety inputs.
- Investment: New compulsory reporting on worker health – modelled on climate emissions reporting – to help private investors differentiate between health-orientated and health-harming businesses.
44 days lost per year
The research found employees now lose the equivalent of 44 days’ productivity on average due to working through sickness, up from 35 days in 2018, and lose a further 6.7 days taking sick leave, up from 3.7 days in 2018.
While UK workers were among the least likely to take sick days, especially compared to other OECD and European countries, they were more likely to persevere at work through sickness.
The think tank concluded with the right support in an appropriate job, people with some health conditions can benefit from good work.
However when compelled to work despite being ill – because of poor work culture, limited access to sick pay, financial insecurity or other factors – employees can actually slow their own recovery time, increase their risk of further sickness later, and spread infectious illnesses to others.
All these lower productivity, which the think tank said was bad for business and bad for workers.
The analysis also found working through poor health was more common among those from marginalised ethnic groups, people in lower quality jobs and workers lacking formal qualifications.
For example, those who are Black or Asian are twice as likely to work through sickness compared to those who are white British, all else being equal.
Polling for the think tank by YouGov found that 74% of people believe the government should be doing more to support population health.
‘Harming wellbeing, reducing productivity’
Dr Jamie O’Halloran, senior research fellow at IPPR, said: “Too often, UK workers are being pressured to work through sickness when that’s not appropriate – harming their wellbeing, and reducing productivity.
“This can be because of a bad workplace culture, poor management, financial insecurity or just weak understanding of long-term conditions among UK employers.
“Our demonstration of hidden productivity costs of working through sickness should catalyse a change in approach.
“We should strive to make sure the work we do is good for our health, that we have the time to recover when we need it, and to ensure businesses both contribute to and benefit from population health. This would protect workers, boost profits and deliver growth.”
Paul Devoy, CEO of Investors in People, said: “All the evidence shows there is a clear link between employers having a positive culture of wellbeing in their organisation with productivity and sustainable organisational performance.
“Focusing on systematically leading, supporting and improving a culture of wellbeing has long term benefits for all employers who make that commitment to their staff.”
Tina Woods, CEO and founder of Business for Health, said: “The cost of employee sickness to businesses is staggering, especially the productivity loss of people working through their sickness.
“We hope our role on the new ONS Health Index will act as a crucial tool in understanding how businesses can improve, report and measure the impact of this on their individual businesses as well as provide important evidence to show how health is linked to economic growth to support plans for the health mission being put forward by the new government.”
IPPR commissioner Kieron Boyle said: “Businesses and investors increasingly see health as an asset, not a cost. This report is a blueprint for their role in creating a healthy and prosperous economy for everyone.
“The ideas it contains would help mobilise billions of pounds of capital for healthier lives – providing an engine for the new government’s health mission aspiration to boost healthy life expectancy across the whole country.
“Institutional investors are excited by real-world solutions in areas like preventative health that can deliver long-term, inclusive growth and better lives.
“Just as private investment can help deliver big societal goals like net-zero, so it can support a transition to a health-led economy that is fairer, more prosperous and which works better for us all.“
Insurers have a vital role
Dan Crook, managing director for group protection at Canada Life, said: “It is concerning to see such an uplift in the hidden productivity costs of employees working through sickness, and a significant number of workers not taking the time off to recover when unwell.
“Our research shows that, over the past two years, 68% of UK workers – equivalent to 21.7 million people – have continued to work while feeling unwell.
“Creating a workplace culture where employees feel at ease to take sick leave and step away from their day-to-day work to focus on their health, without question or hesitation from the employer, must be a priority.
“As the report rightly outlines, the government, employers and insurers, like ourselves, all have a vital role to play in sustaining and improving the wellbeing of the UK’s workforce.
“We urge the government to work with businesses to explore what more can be done to support employers and employees to manage challenges relating to ill health, which will in turn boost workforce productivity.”
Not one single factor
Karl Bennett, wellbeing director at Perkbox Vivup and chairman of the Employee Assistance Programme Association, said: “Presenteeism is rarely the result of one single factor. In the same way as ‘it takes a village to raise a child’ it takes every part of a business to ensure their staff are fit, well and present at work – both physically and emotionally.
“How aware are most businesses of the reasons their staff are absent or not performing? I don’t just mean the line manager, or colleagues, I mean every level of the business.
“How joined up is the organisational infrastructure? Is HR training their managers to hold constructive, productive return to work, leavers and 1:1 sessions with their team?
“If so, how is this information being shared and what action is taken around the results to ensure measures are put in place to mitigate it happening again with others? Is the organisation shouting about the way they look after their teams and the value they place on their employees?
“It’s a fact that if an employee doesn’t feel like they are part of something, they will disengage, which could ultimately result in lethargy and presenteeism.
“This data won’t come as a shock to most businesses, but they may need to question fully whether they have an issue. Many businesses live in a world of blissful ignorance when it comes to employee wellbeing and this data shows that is a mistake.
“Not being aware of your organisational culture, how engaged your staff are, the reasons they are leaving or unwell are the key metrics which should be used regularly, not just as a barometer, but as an ongoing beacon regarding employees’ wellbeing. Get this right and your staff will be happy, engaged and ‘present’ at work.”