Research: impact of health and wellbeing benefits on sickness absence

Holidays, work-life balance and flexible working have risen in importance as factors that reduce sickness absence, says Debbie Lovewell


Preventative perks to boost employees’ overall health and wellbeing continue to be seen as key weapons to control sickness absence levels.

But the types of benefits employers believe help to reduce absence have changed over the past nine years. Back in 2000, health screening (including well woman and well man clinics) was perceived as the most effective perk in tackling absence, followed by an on-site occupational health department and employee assistance programme or other counselling.

These now sit behind benefits such as regular holidays, work-life balance policies and flexible working. This could reflect a greater understanding of the link between physical and mental wellbeing, and the importance of taking a holistic approach to employee health.

There has been a steady drop in the popularity of health screening as an effective perk in tackling absence – from 65% in 2000 to 55% in 2004 and 35% this year. This could be attributed to employers’ desire to pre-empt problems by investing in wellbeing initiatives.

Two-thirds of respondents now see absence management systems as the most effective benefit in tackling the issue. These can help to weed out bogus absences, as well as flag up genuine problems early on.


Sickness absence can be a significant cost to an employer, yet just 38% of respondents record this cost. A further 13% claim not to know whether their organisation records the cost of sickness absence. These figures have remained relatively steady over the past five years. In 2004, 40% of respondents recorded this cost, 43% did so in 2005, and 37% in 2007.

With firms increasingly having to account for every penny and coming under greater pressure to take steps to reduce costs, it will be interesting to see if this changes over the coming year.

Where respondents do record the cost of sickness absence, it seems the measures they have introduced to lower absence levels in their organisation appear to be working. Five years ago, 11% of respondents said sickness absence cost between 6% and 10% of payroll and 3% said it cost more than 10%. This year, just 4% say it costs their organisation 6-10%, and none say it is above this.

There is an equivalent rise in the proportion which say absence equates to about 2% of payroll costs. As in 2004, 21% say absence costs them less than 1% of payroll costs, and the number who say it costs 1-2% of payroll has risen from 37% in 2004 to 48% in 2009.

Employers seem to have got a grip on bogus or unauthorised absences. In 2000, respondents said personal problems and family responsibilities were the second and third highest causes of sickness absence, cited by 39% and 30%, respectively. The growth in familyfriendly and work-life balance policies is just one factor behind the steady decline of these as causes of absence. Childcare is now cited as a major cause by 18% of respondents, and just 7% say work-life balance is an issue.

There has also been a drop in the proportion of employers that cite unauthorised holidays and paid absence seen as entitlement as causes of sickness absence. The development of products such as third-party absence management systems, which require staff to phone a trained medical professional or external provider when absent, may be behind this fall.

Stress, however, has risen as a cause of sickness absence. In 2000, 29% of respondents said work-related stress was a cause. Stress in general was cited by 35% in 2004 and has risen again to 38% this year.


It is encouraging to see a continued rise in the percentage of employers that have a strategy in place to tackle sickness absence. Just under three-quarters now have such a strategy, compared with 63% of respondents five years ago and 65% in the 2008 research.

Employers looking to cut absence levels have made few changes to the format of their strategy over the years. The top six components of their absence management strategy remain the same as in 2004, although the order in which they fall has changed slightly.

Having clear policies and procedures in place and return-to-work interviews remain in first and second place, respectively, although the latter has increased in popularity – up from 72% in 2003 to 86% this year. Such interviews enable employers to monitor how procedures are viewed by staff, which helps them to tailor these to better meet the needs of their workforce. Return-to-work interviews also enable employers to identify staff who may have used sick leave to gain extra time away from work.

The fact that this matter is not taken lightly is demonstrated by the common use of disciplinary procedures – invoked by 68% this year, which is similar to previous years. Particularly relevant in the current economic climate is the use of an employee’s absence record as a determinant for redundancy.

Just under one-fifth (19%) of respondents say this is part of their absence management strategy, compared with a level of about 15% noted in our annual research over the past six years.

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Click on the links below for more sections:

Research: who are the respondents; key findings
Research: attitudes to health and wellbeing
Research: the package
Research: strategies to deal with employee stress
Research: healthcare costs and calculating return on investment
Research: how employers deal with legislation change