The government is being urged to offer tax incentives to smaller businesses to encourage them to invest in health and wellbeing, helping to reduce the £29bn that is lost due to staff sickness and related productivity losses each year.
Research from insurer Unum said that health and wellbeing remains “chronically underfunded” in the SME sector, despite mounting evidence that investment in employee wellbeing delivers clear business benefits.
The findings follow the Keep Britain Working Review, led by former John Lewis chairman Sir Charlie Mayfield, which recently called for greater employer engagement in workforce health and urged the government to offer tax incentives to support these efforts.
Unum’s survey paints a worrying picture: more than a quarter (27 per cent) of SMEs—and almost half (47 per cent) of microbusinesses—have no wellbeing budget at all.
Meanwhile over half (58 per cent) say current tax policies discourage investment in wellbeing initiatives, while two-thirds (66 per cent) report they would invest more in employee health if stronger tax breaks were introduced.
More than half (57 per cent) of SMEs also said that a more supportive regulatory environment would encourage greater investment in wellbeing.
Unum CEO Mark Till said the findings should serve as “a serious wake-up call” to both employers and policymakers.
“SMEs losing £29bn a year to sickness-related productivity drops should be a clear opportunity for smarter policy,” he said.
“Ahead of the Autumn Budget and in light of the Keep Britain Working report, we are calling on government to step up by offering clearer guidance, meaningful tax incentives, and higher wellbeing standards. It’s time to make it easier for SMEs to invest in their people.”
Till added that with sickness absences at a 15-year high, “the appetite to invest in people is there—what’s missing is support.”
