Case for investment

There are clear business benefits to supporting employee health and wellbeing, according to the CBI. The business group has outlined how improving employee health can contribute to better business performance through lower absence, higher productivity and better employee engagement.

The direct costs of employee absence to the economy are estimated at over £14bn per year – and the CBI’s latest absence survey found that the average total cost to business for each absent employee is £975.

These figures would be higher still if productivity lost due to “presenteeism” – staff attending work despite being unwell – was included as well. The Centre for Mental Health calculates that presenteeism based on psychological health problems alone costs the UK economy £15.1bn a year.

The total public sector expenditure on incapacity, disability and injury benefits in 2012-13 was over £36bn, with Employment and Support Allowance, formerly Incapacity Benefit, being claimed by 2.47m people last year.

A CBI report – ‘Getting Better: Workplace health as a business issue’ – published earlier this month, in conjunction with health insurers Medicash, outlined how businesses can improve the wellbeing of their staff and provided a practical toolkit to support firms, based on the experience of CBI members to date.

There has been a welcome downward trend in the number of fatal and non-fatal accidents at work since 2000, it said, but health and wellbeing remains an area where there is more that can be done.

The CBI’s 2013 absence survey showed that the average rate of absence in 2012 was 5.3 days per employee – down from 6.5 days in 2010, but it found a gap of more than three days a year between the best performing quartile of organisations and the worst performers. To see progress, businesses have much to gain from placing the same emphasis on workplace health as they already do on workplace safety, it argued.

In the past, organisations have approached health and wellbeing at work with caution: “It is difficult to quantify the highly subjective area of employee ‘wellbeing’ and, without a generally accepted framework, firms have found it hard to demonstrate tangible benefits or a return on investments made.”

The report noted that the challenge is made all the greater by the impact of lifestyle choices and home life on the health of employees, an area which is beyond the control of a business. In some cases, the time-lag between factors contributing to ill health and the onset of a visible health condition can be years. This ‘storing-up’ means that critical opportunities to intervene early have often been missed by business.

In the modern workplace, it said, leading companies are taking stock of key physical and psychological risk factors and staying ahead of the curve by tackling these trends head on as they become all the more evident. In the context of a changing workforce and rapidly evolving workplaces, it identified three emerging issues that particularly demand action:

• Businesses need to recognise mental wellbeing as a widespread issue in desperate need of attention;
• As public health issues are filtering into the workplace, businesses must place increased focus on the physical health of employees;
• The impact of technological developments on musculo-skeletal disorders requires swift solutions to manage persistent problems.

Neil Carberry, CBI director for employment and skills, said: “Having healthy staff is an essential part of running a healthy business. Investing in the wellbeing of employees is not only the right thing to do, it has real business benefits.

“It’s time for businesses and government to work hand-in-hand to move from a reactive to proactive approach on health and wellbeing in the workplace. Encouraging investment that gets people back to work sooner, with less of a burden on the NHS, is in everybody’s interest.”

Sue Weir, chief executive of Medicash, said: “Developing and implementing a targeted healthcare strategy can help business avoid costly absenteeism and ensure their workforce is a happy, healthy and committed one.

“That’s why more and more businesses looking to increase output and maximise business performance are putting into place robust health and wellbeing strategies. Offering a health and wellbeing package is an affordable and beneficial means of doing this and of attracting, motivating, rewarding and retaining staff.”

Research by the Health Work and Wellbeing Executive into a number of organisations provided cost savings’ estimates attributable to reduced sickness absence.

A car manufacturer estimated gross cost savings of £11m owing to a one percentage point reduction in absenteeism rates over a three-year period. A manufacturing company estimated costs associated with short-term injury sickness absence were cut from £130,000 to almost zero. And a university estimated the cost saving associated with reduced sickness absence as £165,000 over a four-year period, owing to a reduction of total sickness days of around 350 days a year.

The CBI said that key actions which businesses can take to improve employee health include developing joined-up health and wellbeing programmes which factor in emerging public health trends; taking a proactive and preventative approach to health and wellbeing to influence employee behaviour; equipping managers with the knowledge and support to handle health conditions as swiftly as possible; and ensuring robust systems are in place to effectively manage absence and the return to work.

The organisation urged the Government to support businesses doing this by promoting the new Health and Work Service, and ensuring it’s the default option for employees absent from the workplace for four weeks or more; using tax relief and incentives to encourage employer-funded interventions into health conditions at earlier points; promoting the benefits of flexible working as a route to helping absent employees back into the workplace; and continuing to raise awareness of key public health issues.