Record levels of long-term sickness absence shrinking UK economy

We recently published a report ‘The Real Economy: People Perspectives - redefining the workforce’ in which we surveyed UK middle market business leaders to understand the changes they have navigated within their workforce over the past year. We also identified the main concerns they have going forward.

24% of respondents identified long-term sickness absence and ill-health as an immediate concern. Further, according to the Office for National Statistics (ONS), between June and August 2022, around 2.5 million people in the UK were out of work due to long-term sickness. The groups with the highest rates of sickness absence were women, older workers, those with long-term conditions, part-time workers, and people working in care, leisure, or other service occupations.

The ONS reported that 10.5% of long-term sickness absences in 2022 were caused by musculoskeletal problems, followed by 7.9% caused by mental health conditions.

In this article, we highlight the key considerations for employers in managing sickness absence and how they can better prepare for and support their staff with long-term sickness absence.

Managing sickness absence

Failure to manage long-term sickness absence could result in time-consuming and expensive litigation. Impacted employees could pursue unfair dismissal, disability discrimination and personal injury claims. This type of absence can negatively impact business productivity and reputation. For these reasons, adequate management should be a priority for businesses.

The key actions for employers dealing with sickness absence include:

• paying the correct sick pay entitlements;
• ensuring employees comply with sickness reporting procedures;
• understanding the reason for absence. This may require consultation with the employee and obtaining a medical report;
• keeping in contact with employees on long-term sick leave and obtaining regular reports on their medical condition;
• referring employees on long-term sick leave to an Occupational Health (OH) specialist;
• considering whether the sickness absence relates to an existing disability and if any reasonable adjustments are necessary;
• investigating whether sickness absence could be caused by workplace factors such as stress, bullying or an accident at work;
• following sickness policies and processes appropriately; and
• keeping contemporaneous records of meetings and correspondence with employees on sick leave.

There are simple measures employers can implement to better manage long-term sickness absence, such as:

• having appropriate policies and procedures on sickness absence developed in consultation with workers or their representatives, managers and HR so that all relevant parties fully understand the policies and their purpose. These policies should be followed by managers and HR and full records should be kept of all meetings/correspondence in relation to them. This ensures the appropriate paper trail on the employee’s sickness record;
• offering employee assistance programmes, mental health champions and regular catch ups with managers to promote an open culture in relation to employee health and wellbeing so that any health issues can be identified early, and employees feel supported;
• training managers on how to manage long-term sickness absence and risk areas for disability discrimination – including when it is appropriate to make an OH referral;
• implementing formal processes for an employee’s return to work following a long-term sickness absence and train people managers on those processes; and
• introducing return-to-work meetings to check on employees’ wellbeing and identify any adjustments necessary to support a smooth transition back into the workplace.

The impact of sickness absence

The report found that record levels of long-term sickness has resulted in employment in the UK being approximately 0.5% lower than before the Covid-19 pandemic.

There are currently 100,000 fewer people working in the UK than before Covid-19 and most of those people who have become ‘inactive’ say they are no longer looking for work due to illness. Our survey identified that until structural problems around long-term sickness are addressed, the UK economy is likely to continue to underperform.

Addressing long-term sickness appears to be on the government’s agenda. The White Paper ‘Transforming Support: The Health and Disability White Paper’ published in March 2023 sets out the measures it plans to take to help more people with disabilities and health conditions start, stay in and progress at work. A new disability action plan will be developed in 2023, from which a consultation will run later in the year.

More needs to be done in the meantime to support employees and address the negative impact long-term sickness absence is having on businesses – in particular, on productivity and skills shortages. Implementing simple measures as outlined above and creating an open culture around disabilities and mental health at work, could help reduce the stigma around illnesses and enable employees to feel comfortable and supported at work. This could bring employees back into the business sooner.

If you are an employer and would like support managing long-term sickness absence, please contact Jennifer Mansoor.