According to a study carried out by the Centre for Economics and Business Research (Cebr), the cost of sickness absence to the private sector is approximately £3.1 billion each year. When the cost of sickness absence within the public sector is added, the total reaches a hefty £6.5 billion.
The research, which was conducted on behalf of income protection provider Unum, focused on long-term illness and injury that spanned more than six months, as this type of absence has the most significant financial implications for companies and organisations. It showed that around 300,000 people are forced to leave their jobs due to illness or injury each year, with the average long-term sickness period spanning seven years.
The study showed that for the average business with more than 500 employees, the cost of sickness absence for those experiencing long-term illness or injury is approximately £620,000 each year. These costs include: Occupational Sick Pay, which must be paid to the absent employee by law; the cost of employing replacement staff and the training costs associated with this; any reduction in productivity; covering the legal cost of sickness absence; and liaising with the sick or injured party.
Oliver Hogan, head of microeconomics at Cebr, commented: “Much research has been conducted into the cost of sick leave to the UK economy, but this is the first time research has been commissioned to examine the cost of long-term absence specifically. Cebr’s estimates suggest that it is costing the UK private sector alone more than the government’s annual rail budget.”
Occupational health provider Medigold helps businesses to reduce the cost of sickness absence and provides a range of other risk-management strategies to help protect and retain members of staff.
Contact Medigold today to find out more.