A look at long-term illness in the workforce

In the UK, anyone aged between 16 and 64 is classed as being of working age, although those at the younger end of the scale will likely be in some form of education or training. The Office for National Statistics (ONS) published figures showing an increase in working-age people reporting long-term health conditions, from 31% in 2019 to 36% in the first quarter of 2023.

This translates to 2.5 million people being economically inactive or unable to work, an increase of over 400,000 since the start of the pandemic. 38% of those people report having multiple health conditions, up from 34% in 2019.

What illnesses are causing the increase in long-term sickness absence, and how are they impacting UK businesses? Let's examine the figures in more detail.

ONS statistics show that for every 13 people in work, one is out of the workforce due to long-term illness. While employment rose, unemployment fell, and average earnings increased at the end of 2023, job vacancies are still at a record high. The drop in available workers is likely driving wage increases and causing businesses to recruit more workers from overseas to fill vacancies.

A lack of available workers will likely negatively impact business growth and productivity. Companies cannot meet demand or take on new clients because they don't have the right people to do the work. Alternatively, they may need to pay their staff more to reflect increased workloads and the additional stress that can cause.

The reduction in the number of available employees due to sickness compounds trends that were present pre-pandemic. Over half of those out of work due to ill health are women, in addition to the 27.6% of women who had left the workforce because of their family commitments.

Five million workers in the UK reported experiencing depression, anxiety and mental health issues in 2023, with 1.35million of those taking long-term sick leave as a result. Poor mental health is the leading reported cause of economic inactivity and has risen by 40% since2019. However, many of these report mental health issues as a secondary reason for their absence from work. It's often found alongside other illnesses, such as musculoskeletal problems. Problems with legs and feet rose by 29% since2019, and back and neck problems increased by 28% in the same period.

Other health conditions, such as heart problems, breathing difficulties, and diabetes, contributed to the total figures to a lesser extent.

The ONS survey didn't offer guidance on reporting long-term COVID-19 symptoms, meaning the impact of the pandemic on long-term ill health wasn't clear. It's possible people with long-term COVID-19symptoms reported this as a heart or lung problem or indicated they had a miscellaneous illness. Those with musculoskeletal issues often reported more than one condition. 57%of people with long-term sickness absence due to chest or breathing issues also reported depression, anxiety, or other mental health issues.

NHS waiting times remain at record highs, with 7.6 million people waiting for elective treatment in April 2024. A 2023 ONS survey on winter pressures showed that 33% of working-age people on long-term sick leave were awaiting NHS treatment.

The statistics don't tell us whether treatment would enable people experiencing long-term illness to return to work. However, it's possible that, in some cases, faster treatment would help reduce long-term sickness absence and help people get back into the workforce.

Long-term illness can significantly damage UK businesses and the economy. Due to a lack of skilled and qualified staff, companies may struggle to grow or face closure.

Businesses must consider various factors regarding long-term illness. Ineffective sickness absence management can result in the loss of a valued employee and the potential for legal liability. There are also economic factors associated with long-term illness, particularly if a key team member is absent.

Taking care of employee well-being can prevent absence, shorten its duration and help prevent other health issues from developing. It can also boost your business reputation and help you attract new talent to aid business growth.

Here are a few ways to protect your business against the impact of long-term illness and sickness absence.

Managing long-term illness

Managing long-term illness and a related absence also includes managing an employee's return to work. A long-term health condition may meet the definition of a disability under the Disability Discrimination Act, which means you must consider reasonable adjustments to make an employee's work accessible. If this is practical, employees may need to work in an adapted role, take on lighter duties or switch to another job. This approach increases the likelihood you'll retain an existing employee rather than having to recruit, which decreases the economic impact on your business.

During an absence, staying in touch with an employee helps them feel supported and allows you to assess their condition. It's vital the employee leads this contact. Some employees will view contact as pressure to return, while others will appreciate the opportunity to stay in touch. Asking whether they prefer telephone, email, or another form of contact helps manage this.

Their GP will likely be involved in issuing sickness certificates or fit-to-work notes. However, occupational health assessments can also help to combine medical knowledge with an awareness of an employee's job role and how this could be adapted. This approach lets you organise a phased return or adjust duties as appropriate.

Review your sickness absence policy

An effective sickness absence policy and employment contracts should underpin your approach to sickness absence. Reviewing your policies and contracts regularly with your legal advisers ensures you meet all relevant legislation and helps protect your company in the face of legal action. While you can't prevent an employee from claiming disability discrimination or unfair or constructive dismissal, a robust policy and contracts can help your defence.

Reviewing contracts with your financial advisors and accountants also helps you consider the financial impact of long-term sickness absence on your business and review sick pay provisions for staff with long-term illness.

Prevention is better than cure

Not all health issues are preventable, but many are if you take steps to protect your health and well-being. There are many ways to promote good health among your employees, for example, by encouraging them to increase their physical activity or eat well. Simple measures can positively impact employees' physical and mental health and prevent some health issues from developing.

You can implement workplace health and wellness initiatives and create a well-being culture. You can also give your employees tools to set healthy living goals and manage their health and well-being. This approach incentivises your team to take responsibility for their health with your support.

Your chosen strategy should reflect the needs of your business and employees. However, here are some common methods that can deliver excellent results.

Employee health assessments

You can arrange employee health assessments as a standalone program or as part of a group health insurance policy. Many health insurance providers offer health assessments as a standard part of their policies or at an additional cost. A basic health assessment typically includes measuring an employee's height, weight, body mass index and waist-to-height ratio. They'll usually also check flexibility, mobility, blood pressure, and blood sugar. If an employee is a current or recent smoker, they'll also check their lung age. Some insurers offer extensive health checks, which can be helpful if your industry carries particular health risks. However, this isn't a substitute for legally mandated health surveillance for conditions such as noise-induced hearing loss, vibration white finger or asbestos-related illness.

Health assessments provide your employees with information about areas for improvement and can offer support to help them achieve their health goals. It can also give your business anonymised health data to identify potential health issues and trends amongst your workforce.

Self-care resources

Providing your staff with self-help resources can empower them to take responsibility for their general health and prevent long-term illness. A library of articles on common conditions and ways to improve their health lets them read and explore appropriate topics. This could include assessment tools such as a BMI calculator or mental health assessment and links to NHS support programs and apps, such as the Better Health program and Couch to 5K app.

Most health insurers have resource libraries that are available to non-members. If you decide to offer employee health insurance, your employees can also access rewards and discounts on gym memberships, fitness tracking technology and other well-being products and services.

Employee Assistance Programs

An Employee Assistance Program (EAP)provides informal counselling and mental health support. Some programs also offer financial and legal advice. An EAP typically provides a limited number of counselling sessions which focus on work-related issues, meaning it isn't a substitute for psychiatric treatment. However, it can help to reduce workplace stress and prevent burnout.

Depression and anxiety are leading causes of long-term illness and workplace absences, so recognising the signs of burnout and taking steps to prevent it could reduce mental health-related absences. Signs of burnout can include physical symptoms like insomnia, headaches, and stomach problems. You may notice your staff becoming more irritable, procrastinating more, or losing interest in tasks they previously enjoyed.

An EAP can offer confidential third-party support, but other steps are worthwhile. Helping staff create a positive work-life balance, manage their time well at work, and take proper breaks during the day can all help.

As with employee health assessments, you can invest in a standalone EAP or add it to your employee health insurance as an optional extra.

Health insurance

A group health insurance policy gives your employees fast access to high-quality private medical care when needed. We've discussed how many employees are absent from work with a long-term illness while waiting for NHS treatment. While private healthcare may not provide a solution in every case, it can help speed up an employee's access to treatment and support a return to work.

You can tailor your business health insurance to suit your requirements. Most providers offer core coverage, which includes in-patient treatment, cancer care, limited out-patient services and mental health support. You can add optional extras to provide additional therapies or extend the coverage available with the basic policy.

Policies typically also provide access to a24/7 virtual GP service, health helplines and a member rewards program. As mentioned, your health insurance can offer additional services, such as an employee assistance program and health assessments if needed.

The statistics on long-term illness absence indicate that mental health issues and musculoskeletal conditions are responsible for a significant proportion of long-term sickness absences. Here's what your health insurance coverage can offer by way of support.

Mental health coverage

Every health insurance policy provides access to counselling as part of its core coverage. Your employees can usually refer themselves for treatment without seeing their GP first. However, most policies only cover 8-10 sessions, which is ideal for short-term issues but maybe insufficient for employees with more significant mental health needs.

Telephone helplines can also offer some support. They don't provide counselling but can signpost staff to other sources of help and advise them on the treatment available with their health insurance. Online resources often include articles and assessment tools on mental health topics, and member reward programs can provide discounts on mindfulness and meditation apps.

Investing in extended mental health coverage lets your employees access a range of treatments when needed. Extended coverage can provide more counselling or CBT sessions and out-patient or in-patient psychiatric care, which isn't available on a basic plan.

Depending on your chosen policy, your insurer can also provide your management team with training and guidance to help you support employees with mental health issues.

Support for musculoskeletal issues

A basic health insurance policy often includes access to physiotherapy sessions. Your staff can access these on a self-referral basis, like the counselling sessions previously mentioned. Similarly, these sessions are frequently limited to up to ten treatments.

You can extend the amount of treatment your policy offers for musculoskeletal conditions by adding optional extras. Most policies include some out-patient coverage as part of their core coverage. However, this is usually limited to minor surgical procedures or diagnostic tests, scans and an appointment with a consultant. Adding further coverage extends the range of available treatments.

It's worth checking what the core policy covers before deciding what to add. Some policies include physiotherapy treatment in their out-patient coverage, while others don't. If you want to provide your employees access to a broader range of treatments, it's also worth considering separate therapies coverage. This can include physiotherapy, osteopathy, and chiropractic treatment. In addition, your policy can also cover alternative therapies such as acupuncture, homoeopathy, or reiki, depending on your chosen provider.

Employee income protection insurance

Group income protection insurance pays employees a fixed monthly income when they cannot work due to illness or injury. You pay a monthly or annual premium, then you can claim when they're off sick. An income protection policy can help you protect your company's financial health and look after your employees. Premiums are typically cheaper than paying an employee's usual salary, so you can afford to pay for extra staff if needed.

Policies typically pay out more than your employee would receive in statutory sick pay, giving them a financial safety net. You can decide how long you want the policy to pay for and what percentage of an employee's usual salary the policy will cover. Policies also have a deferred period, meaning they only start paying when an employee has been absent for a specified length of time. If you provide full pay at the start of an absence, you can set the deferred period to end at this point.

Some policies offer additional benefits, such as access to rehabilitation treatment and health support services.

You could also consider offering critical illness insurance, which pays a lump sum if an employee is diagnosed with a serious illness.

Key person insurance

As the name suggests, key person insurance covers anyone essential to your business if they become ill and need to take time off. You can use it to pay someone to step into your role while you're away or fund additional staff to take on some of your responsibilities, allowing other managers to absorb your management duties more efficiently.

How you use key person insurance will vary depending on your business size and structure. It's tax-deductible whether you have a limited company or have registered with HMRC as a sole trader, as it's considered an essential expense for business continuity.

Key person insurance can also pay out if anemployee in a critical role dies. Ideally, business owners and company directorsshould make provisions for succession in their will. If needed, their executor scan use the insurance payment to implement those changes and fund additionalsupport during the transition period.

At Globacare, we help our clients find the right insurance solutions for their businesses so they can support their employees' health and well-being. Contact us for advice tailored to your needs.