CBI/Pfizer research: Workplace absences cost economy £17 billion

Workplace absence cost UK employers £17 billion last year due to 190 million working days lost, according to new research from the Confederation of British Industry (CBI) and Pfizer.

The CBI/Pfizer Absence and Workplace Health Survey found that despite the introduction of the fit note in 2010, the rate of absence last year, 6.5 days per employee on average, was marginally higher than 6.4 in 2009, the lowest rate since the survey began in 1987.

The cost to the UK economy of £17 billion includes over £2.7 billion from 30.4 million days of non-genuine sickness absence, or ‘sickies’. This figure does not include other indirect costs of absence, such as lower customer service and lost productivity.

Despite strong support for the fit note initiative, employers have been disappointed by their experience so far: 66% of respondents said that it had not yet helped their rehabilitation policy, and 71% were not confident that GPs were using the fit note differently from the old sick note.

Employees in the public sector took more sick days than those in the private sector, an average of 8.1 days a year compared with 5.9 days. This shows an improvement on last year’s average of 8.3 days and a marked improvement since the average of nine days in 2007.

The research found that far more absence in the public sector is long term than in the private sector, and reducing this will be key to reaching private sector levels.

The CBI estimates that if the public sector could reach private sector absence levels, it would save the taxpayer around £5 billion by 2015-16. The cost of absence is much higher in the public sector: a median of £1,040 compared with £710 in the private sector, or a difference of 46%.

Across the sectors, the gap between the best and worst performing organisations widened in 2010, with the best performing quartile of the survey achieving an average of just 2.2 days per employee and the worst quartile losing an average of 10.7 days per employee.

Long-term absence accounts for nearly a third (32%) of all time lost to sickness. In the public sector, the proportion is even higher, with long-term health problems causing nearly half (47%) of days lost, whereas in the private sector long-term absence accounts for 27%.

According to the research, mental health issues are the single biggest cause of long-term absence, followed by musculoskeletal disorders, back pain and cancer treatment.

Katja Hall, chief policy director at the CBI, said: “There has been no let up in the cost of absence to the UK economy, which runs into billions of pounds a year. Although many organisations have been successful in bringing down levels of absence, the gap between the best and worst has widened.

“The substantial costs of absence to the economy put a premium on managing longer-term absence well. The fit note is a great initiative, which could play an important role in helping people back to work and stopping them slide into long-term absence. But employers are far from convinced that the scheme is working properly and do not think GPs are getting the necessary training.

“The launch of the electronic fit note should be an ideal opportunity for the Department of Work and Pensions to extend the reach of its training programme and address GPs’ engagement. There can be no room for complacency in addressing the so-called sick note culture.

“The news that public sector absence levels have come down further is welcome, and could reflect better absence management by public sector employers. However, absence levels are still much higher than in the private sector, and it would be a shame if recent improvements were reversed once current public spending cuts went away.”

Dr Berkeley Phillips, medical director at Pfizer UK, said: “Long-term absence is a concern, and costs associated with longer periods of ill-health are especially high in the public sector.

“Many people with long-term health problems want to work and contribute to society, but the longer employees remain off work, the harder reintegration into the workplace becomes.

“This report highlights the importance of early intervention and proactive management strategies to support employees and employers in tackling the factors contributing to long-term absence and supporting a return to work. The economic consequences of long-term absence stretch beyond the individual workplace to deliver a significant impact on society.

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“By drawing together data on both absence trends and management strategies, this report highlights how both employers and policymakers can deliver significant benefits to maximise wellness and minimise illness for the UK workforce.”

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