Revealed: Hidden annual cost of employee sickness is up £30 billion since 2018

• £25 billion extra ‘hidden cost’ to businesses from lower productivity among people working through sickness – with just £5 billion down to rising sick days

• UK workers are among the least likely to take sick days, and most likely to work through illness

• New report from IPPR outlines a business-backed plan for healthy work to boost growth and protect workers

Rising workplace sickness is costing UK businesses billions every year, according to a new report by IPPR.

New analysis from the think tank reveals the annual hidden cost of employee sickness has risen by £30 billion since 2018. Most of this increased cost (£25 billion) is from lower productivity, with only £5 billion due to a rise in sick days.

Employees now lose the equivalent of 44 days’ productivity on average due to working through sickness, up from 35 days in 2018, and lose a further 6.7 days taking sick leave, up from 3.7 days in 2018.

Workers in the UK are among the least likely to take sick days, especially compared to other OECD and European countries. However, they are more likely to persevere at work through sickness, which can have a productivity cost.   

With the right support in an appropriate job, people with some health conditions can benefit from good work. But when compelled to work despite being ill – because of poor work culture, limited access to sick pay, financial insecurity or other factors – employees can slow their own recovery time, increase their risk of further sickness later, and spread infectious illnesses to others - all lowering productivity. This is bad for business and bad for workers, says the think tank.

Working through poor health is more common among those from marginalised ethnic groups, people in lower quality jobs and workers lacking formal qualifications. For example, those who are Black or Asian are twice as likely to work through sickness compared to those who are white British, all else being equal.

Today’s paper, the final interim report from the cross-party IPPR Commission on Health and Prosperity, argues health and work can interact in a vicious or virtuous circle – but that we have the former in Britain today.

Polling for the think tank by YouGov found that 74 per cent of people believe the government should be doing more to support our health.

IPPR is proposing a bold pro-business health plan which reimagines the role of business in health – clamping down on businesses that harm health and scaling up businesses that create good health – to deliver a healthy future of work for all. The think tank argues this would help the new government achieve health, prosperity and economic growth. The plan includes:

• Incentives: A new tax incentive for companies that commit to significant improvements in the health of their workforce, including the security, flexibility and pay of their staff, focused on SMEs.

• Regulation: A new ‘do no harm’ duty for employers, regulating them on health outcomes, not just safety inputs

• Investment: New compulsory reporting on worker health – modelled on climate emissions reporting – to help private investors differentiate between health-orientated and health-harming businesses

Dr Jamie O’Halloran, senior research fellow at IPPR, said: 

“Too often, UK workers are being pressured to work through sickness when that’s not appropriate – harming their wellbeing, and reducing productivity. This can be because of a bad workplace culture, poor management, financial insecurity or just weak understanding of long-term conditions among UK employers.

“Our demonstration of a ‘hidden’ productivity costs of working through sickness should catalyse a change in approach. We should strive to make sure the work we do is good for our health, that we have the time to recover when we need it, and to ensure businesses both contribute to and benefit from population health. This would protect workers, boost profits and deliver growth.”

Paul Devoy, CEO of Investors in People, said:

“All the evidence shows there is a clear link between employers having a positive culture of wellbeing in their organisation with productivity and sustainable organisational performance. Focusing on systematically leading, supporting and improving a culture of wellbeing has long term benefits for all employers who make that commitment to their staff.”

Tina Woods, CEO and Founder of Business for Health, said:

“The cost of employee sickness to businesses is staggering, especially the productivity loss of people working through their sickness. We hope our role on the new ONS Health Index will act as a crucial tool in understanding how businesses can improve, report and measure the impact of this on their individual businesses as well as provide important evidence to show how health is linked to economic growth to support plans for the Health Mission being put forward by the new government.”

Kieron Boyle OBE, Chief Executive of the Impact Investing Institute and IPPR Commissioner said:

"Businesses and investors increasingly see health as an asset, not a cost. This report is a blueprint for their role in creating a healthy and prosperous economy for everyone.

"The ideas it contains would help mobilise billions of pounds of capital for healthier lives — providing an engine for the new government's health mission aspiration to boost healthy life expectancy across the whole country. Institutional investors are excited by real-world solutions in areas like preventative health that can deliver long-term, inclusive growth and better lives.

"Just as private investment can help deliver big societal goals like net-zero, so it can support a transition to a health-led economy that is fairer, more prosperous and which works better for us all."

ENDS 

Dr Jamie O’Halloran and Chris Thomas, head of IPPR’s cross-party Commission on Health and Prosperity, are available for interview

CONTACT 

David Wastell, Director of News and Communications: 07921 403651 d.wastell@ippr.org

Liam Evans, Senior Digital and Media Officer: 07419 365334 l.evans@ippr.org  

Georgia Horsfall, digital and media officer: 07931 605737 g.horsfall@ippr.org

NOTES TO EDITORS 

1. The IPPR discussion paper, Healthy industry, prosperous economy by Dr Jamie O’Halloran and Chris Thomas, will be published at 0001 on Wednesday 31 July. It will be available for download at:  http://www.ippr.org/articles/h...;
2. Advance copies of the report are available under embargo on request.
3. YouGov conducted nationally representative polling of 2,041 respondents, fieldwork was undertaken between December 20-21, 2023.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). 
   
4. Vitality’s healthiest workplace data was used to estimate the number of productive days lost due to ‘absenteeism’ (sick leave) and ‘presenteeism’ (working while sick). Vitality uses the Work Productivity and Activity Impairment General Health Questionnaire –which assess productivity loss by measuring the effect on work productivity of general health and symptom severity – for more details on the methodology please see Hafner et al 2015.
   
5. To determine the cost of these productivity losses from ‘presenteeism’ or ‘absenteeism’, researchers used the net daily wage of a worker with median salary (salary minus taxes and national insurance contributions). This wage cost was then multiplied by the number of days lost due by the total number of employees in the UK. This methodology is regularly used to determine lost productive output, though it is likely to be an underestimate as most employees would produce more than their wages.
   
6. To explore characteristics that are correlated with ‘presenteeism’ researchers use Understanding Society data and use a measure of ‘presenteeism’ defined as when one works through sickness, with negative impacts on one’s work. This variable is derived from previous academic work in this area.
   
7. To estimate the likelihood of a worker exhibiting ‘presenteeism’ logistic modeling techniques were used – which control for sex, age, ethnicity, region, month, year, occupation, firm size, sector, low pay, job satisfaction, autonomy at work, level of job security, level of flexibility at work, and whether they have a long-term physical or mental condition.
8. IPPR (the Institute for Public Policy Research) is an independent charity working towards a fairer, greener, and more prosperous society. We are researchers, communicators, and policy experts creating tangible progressive change, and turning bold ideas into common sense realities. Working across the UK, IPPR, IPPR North, and IPPR Scotland are deeply connected to the people of our nations and regions, and the issues our communities face. We have helped shape national conversations and progressive policy change for more than 30 years. From making the early case for the minimum wage and tackling regional inequality, to proposing a windfall tax on energy companies, IPPR’s research and policy work has put forward practical solutions for the crises facing society. www.ippr.org