Workplace absence costs UK economy £18bn per year

A new report shows that workplace absence is costing the UK economy £18billion in lost productivity. This is part of an increasing trend that has seen workplace absence increase year-on-year since 2011 – having previously been on a downward trend since 1993. As a result, the report predicts that the cost of absence will increase to £21bn in 2020, and increase to £26bn in 2030.

The analysis from Centre of Economic and Business Research commissioned by workplace absence management specialist, FirstCare, is part of a wider report, Change at Work: How Absence, Attitudes and Demographics are impacting UK employers.

A major contributor to the increased levels of absence in the UK is the rise in mental health issues, which have increased by 71.9% since 2011. The report shows shown that mental health issues hit 30-40 year olds hardest – a result of increased financial pressures and a difficulty balancing the demands of work and family. This is evidenced by the seasonality of mental health issues, which increase during the summer and Christmas holidays.

An ageing workforce has also had a significant impact on levels of absence, with musculoskeletal issues continuing to affect mostly 50-60 year olds, and time off to recover from surgery resulting in a rise of 0.63 to 0.84 days lost per employee – the equivalent of over two years of lost productivity for an organisation employing 1000 people.

Compounding the rise of these particular conditions is the attitudes of Millenials towards work. This age group value independence and flexibility, sometimes over and above salary and job security. FirstCare’s data shows a 13% increase in employees leaving their jobs after reaching the one-year milestone. Those in part-time work has also risen from 29.7% to 31.84% from 2009 to 2016, presenting a considerable challenge to employers in monitoring and managing absence workforce demographics change.

Commenting on the findings, David Hope, CEO of FirstCare said: ”Change at Work reveals how serious the issue of workplace absence in the UK is. Every day lost carries a business cost, and organisations must better identify and manage the challenges of a changing workforce in order to redress the rise in absence we have witnessed since 2011.

"This is holding back productivity growth in the UK, preventing us from keeping pace with many of our European neighbours. Though it is a sizeable and complex problem, the solutions can be straightforward. By understanding the demographics of the workforce and some of the pressure points causing high levels of absence, employers can begin to tackle it more affectively.

"A reduction of 21.2% to the level of absence in the UK, the average that organisations included in this report have achieved, would result in nearly £4bn worth of productivity gains to the UK economy.”

The report is available to download here and FirstCare will be tweeting key findings @FirstCareUK