Analysis by thinktank the Institute for Public Policy Research (IPPR) reveals the ‘hidden cost’ of workplace sickness in the UK has now increased to more than £100 billion a year. For context, that’s around the same as brands like Tesla, Pepsi and even Disney make in a year.
But more alarming than that figure is what it was just six years ago. IPPR’s research shows that, in 2018, UK employers’ annual bill for sickness was 30% less than in 2024.
What is interesting about this finding is that only £5 billion of this total was down to employees taking more sick days. The IPPR reports a “staggering” 85% of the rise was down to lower productivity at work.
What’s going on?
Historically, labour productivity in the UK has grown by around 2% each year. However, since the 2008 recession, it has risen far more slowly. In 2024, UK productivity is less than half of what it was in 1997. The United States, Germany and France, all have much higher levels of productivity than the UK does.
The reasons why the UK has such low productivity are complex and include things like UK investments, but we do know that worker wellbeing has been a significant contributing factor. If you were to overlay the graphs representing UK worker wellbeing and UK productivity, you would see that as people’s mental health deteriorated, their productivity dropped too.
Since the mid 1990s, the amount of people with common mental health problems went up by more than 20%; the same time that the OECD says our productivity worsened too.
Three actions to tackle rising workplace sickness costs
If we are to make even the smallest dent in these UK workplace sickness costs, we have to do three things:
- Enhance sick pay
- Enhance support for those working remotely
- Get better at removing the stigma associated with ill health.
If you were to overlay the graphs representing UK worker wellbeing and UK productivity, you would see that as people’s mental health deteriorated, their productivity dropped too.
1. Too ill to work, too poor not to
In its new report, the IPPR says that employees in the UK now lose the equivalent of 44 days of productivity because of working while sick and that this is the biggest contributing factor to the rise in costs for employers. This year, 75% of workers said they haven’t taken time off when they are ill. Workers in the UK are among the least likely of all the OECD countries to actually take their sick days.
Part of the reason for people not taking sick days when they are ill is the woefully inadequate levels of sick pay in the UK and the fact that more than a million UK workers are unable to claim Statutory Sick Pay (SSP) due to their low earnings. This creates a situation where someone is too ill to work and too poor not to. It also creates public health issues allowing the spread of viruses by those who have no option but to go to work while ill.
The UK has some of the lowest rates of sick pay in Europe and even in most parts of the world. SSP in the UK is in need of urgent reform and the evidence continues to mount that higher levels of sick pay actually lead to less absences.
2. Working from home is driving hidden sickness levels
I believe one of the biggest reasons behind an increase in presenteeism in recent years has been the mass hybrid working movement. A new study by Ulster University’s Economic Policy Centre confirms this.
When someone works from home, they are less likely to take sick days. I’ve had team members tell me they aren’t going to come to the office because they don’t feel well, so will log on at home instead. I met with a customer the other week who dialled in to the in-person meeting because she had Covid. People feel obliged to work when they are sick but working from home, and that’s a problem.
While home workers may feel better able to manage their sickness and still work when at home, there is evidence that not taking sick days is worse for both employees and employers in the long run. Encouraging employees to take just one day of sickness at the start of illness is far more likely to prevent longer term illness.
When someone works from home, they are less likely to take sick days.
3. Stigma
There continues to be a stigma around taking sick days. With all the talk of supporting mental health in the workplace and the cries of “its ok to not be ok”, nearly 90% of workers say they worked through sickness over the last year (this author included). A massive 65% of workers say they experience “stress, anxiety, guilt or fear” when requesting sick time. I imagine the record numbers of workers off ill in 2024 is also actually adding to these feelings.
In 2024, half of UK adults still believe there is a great deal of shame associated with mental health conditions. Even when the public say they accept the medical or genetic nature of mental health and the need for treatment, they still hold largely negative views of those with poor mental health. This year, 64% of us say we will avoid talking about our mental health with people. These practices are contributing to making us worse.
Prevention is key to tackling workplace sickness costs
If we are to improve the UK’s productivity, we have to do a better job of removing the barriers to early intervention, like sick pay. Early intervention also means encouraging employees to be open about their feelings so that we can intervene before problems get worse. Furthermore, early intervention is also about ensuring people take a sick day when symptoms arise, so that what could be just one day of sickness doesn’t become five.
Taking proactive steps prior to and at the onset of illness is supported by heavy evidence as an effective strategy for minimising long-term health issues and workplace disruption. The average cost of sickness and presenteeism to the UK employer is £71,000 a year and rising. If we do not act now, by 2030 this figure will be well over £100,000.
