The annual cost of employee sickness has risen by £30 billion since 2018, with the majority of this figure coming from a hidden source, according to research from think tank IPPR.
Figures for 2023 show that the majority of this cost, £25 billion, comes from reduced productivity as ill workers struggle to carry on rather than take sick leave. IPPR said that only £5 billion of the cost can be attributed to an increase in sick days.
The increase puts the cost of presenteeism and absenteeism combined at £103 billion in 2023, up from £73 billion in 2018, the IPPR said.
Productivity loss
Employees lose the equivalent of 44 days of productivity on average because people continue to work when they are unwell, the think tank found. This is an increase from 35 days in 2018.
Data also showed that sick days have increased to an average of 6.7, compared with 3.7 days taken in 2018.
UK workers are among the least likely to take sick days, and most likely to work through illness, when compared to other OECD and European countries, the IPPR said.
Compelled to work
IPPR recognised that some people with health conditions can benefit from good work, with the right support.
However, when employees feel compelled to work despite being sick it hits productivity and slows recovery time, it warned. Working when unwell also increases an individual’s risk of being ill again later and enables the spread of infectious diseases.
Factors found to drive sickness presenteeism include poor work culture, limited access to sick pay and financial insecurity.
Continuing to work while ill was found to be more common among people from marginalised ethnic groups, people in lower quality jobs and people who lack formal qualifications.
IPPR said that, for example, those who are Black or Asian are twice as likely to work through poor health compared to those who are white British, all else being equal.
Pro-business blueprint
In response to the issue, IPPR has published a pro-business plan, which it said “reimagines the role of business in health”.
Proposals advocate clamping down on businesses that harm health and scaling up businesses that create good health.
Proposals recommend the introduction of a new tax incentive for companies that commit to making significant improvements in the health of their workforce. This would involve commitments around job security, flexibility and pay.
A new ‘do no harm’ duty for employers has also been proposed. This would involve the government regulating employers on health outcomes rather than just safety.
The report called for investment in new compulsory reporting on worker health, which would be modelled on climate emissions reporting. IPPR said this would help private investors differentiate between health-orientated and health-harming businesses.
‘Hidden’ productivity hit
Jamie O’Halloran, senior research fellow at IPPR, said: “Our demonstration of a ‘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.”
Investors in People CEO Paul Devoy 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.”
‘Staggering cost’
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.”
Mobilise billions of pounds
Kieron Boyle, chief executive of the Impact Investing Institute and IPPR commissioner, 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.”
Karl Bennett, wellbeing director at Perkbox Vivup and chair 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.”
Employer awareness
Bennett questioned how aware businesses are of the reasons behind staff absences or underperformance.
“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 one to one 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?”
Disengaged staff
He warned 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.”
He said: “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.”
Presenteeism recognised
Paul Schreier, CEO at Simplyhealth, said research conducted by his company has shown 20 percent of employers saw presenteeism as a problem in their organisation in the past 12 months.
“We also know rising sick days have affected nearly double as many employers (38 percent),” he said.
“With NHS waiting lists for everyday treatment at record highs, employers would be wise to offer effective workplace health cover that can enable access to GPs, counselling and physio (with mental health and back pain being the two leading causes for time off work).
“We know more than half of employees (52 percent) say if their employer offered health cover, they wouldn’t need to take as much time off.
“It’s also important that employers ensure employees feel supported to take the time they need to attend appointments and fully recover.
“It’s a no brainer – a happy and healthy workforce is far better for business productivity and workplace morale.”
