The Health and Safety Executive estimates we lose 36 million days each year to work-related illness. This costs companies £533 per year per employee. The Chartered Institute of Personnel and Development puts this figure even higher at £666. Despite not being able to fathom how these organisations calculate these things without logging every company’s data (which we know they don’t because the same surveys tell us that only 70% of companies record it in the first place), what the numbers mean is that everyone is off sick about seven-to-nine days a year. Cue collective gasp in our HR team.
We have an average of 3.2 days absence per year, but while our costs are about half the national average at £344 per head, this still amounts to a six-figure sum, which a company of only 650 people, if you will excuse the pun, can ill afford.
The cost of ill health should be high on everyone’s agenda now the Welfare Reform Act is close to fruition. It comes into force on 27 October and is the third piece of key legislation affecting the group risk arena. The Act will force employers to consider group income protection (GIP) as the focus for funding long-term absenteeism falls upon them. Before anyone starts moaning about the government once more unloading costs on to unsuspecting employers, this should, in fact, come as no surprise: the welfare state was never designed to fund absence from the workplace in the long term. The new assessment phase the Act introduces should have a positive effect on the GIP market, with providers already making their products flexible in reaction to the changing state system.
On our own patch, we are giving line managers a monthly report on their team’s absences, including dates, reasons and any patterns we spot. We are also training them in how to tackle absence, which will replace the common practice of filing the sick note and complaining about lack of resources. We hope this will act in tandem with our existing health and wellbeing programme in which the emphasis is on prevention rather than cure, through free gym membership and a free smoking-cessation programme, and health screening alongside more traditional insurances. The investment is significant but, ultimately, we shall have fewer people on their sick bed.
n Richard Higginson, reward manager (with Yvonne Dully, HR business partner), Towry Law