The hidden cost of workplace sickness

Workplace sickness has been rising sharply over the last decade. We’re not just talking about the odd day when someone has a cough and sniffly nose – the nation’s mental and physical health is deteriorating, and it’s costing your business more than you think. 

Covering the cost of an employee’s sick day is actually the least of a business owner’s concerns. The biggest challenge is presenteeism, which raises stress levels, reduces productivity and prolongs sickness. As a result, the cost of workplace sickness has skyrocketed. 

In this post, we investigate this national epidemic in more detail and highlight its effect on UK businesses. We also suggest a range of practical ways to safeguard your organisation from workplace sickness and foster a happy and healthy company culture.

The ‘hidden’ cost of workplace sickness

A recent report by the Institute for Public Policy Research (IPPR) revealed a staggering hidden cost of £103 billion caused by workplace sickness in 2023. That number has grown by £30 billion since 2018, but only £5 billion of that total is due to a rise in sick days. The biggest culprits are, in fact, heightened presenteeism and lowered productivity.

Presenteeism is working despite being ill, which is a growing problem in the UK. The IPPR report highlights that Brits are among the least likely workers in Europe to take a sick day.

While continuing to work through an illness might appear like an individual is determined and committed to their job, presenteeism makes us unproductive in the long run. As a result, UK employees now lose an average of 44 days a year due to working through sickness, up from 35 days in 2018. They also lost 6.7 days of sick leave, up from 3.7 days in 2018. 

Businesses are losing billions of pounds due to lower productivity caused by workplace sickness. They lose even more money when their employees’ illnesses worsen, forcing them to take longer sick leave.

Finding the root cause

What’s the reason behind this epidemic? There’s a general stigma in the UK around calling in sick – whether the sickness is genuine or not. Even if we call in sick because we really are sick, there’s just something about it that feels wrong or even immoral. 

One of those feelings is guilt. A 2022 MetLife survey shows that women, in particular (41%), feel bad for increasing their colleagues’ workload during their unforeseen absence. 

Another common reason for working through workplace sickness is financial anxiety, with 23% of Brits saying they fret about losing money if they’re too ill to work. 

Furthermore, a fifth of employees worry that their bosses won’t believe that they’re actually poorly, and almost the same number don’t take time off because of the amount of work they’ll have to return to. Worryingly, only 17% believe their colleagues would support them if they needed to take the time to recover fully. 

There’s an evident unspoken pressure to work through workplace sickness, whether physical or mental. However, as the earlier figures clearly show, the long-term effects are incredibly harmful to staff well-being and productivity and to the company’s health. 

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 a weak understanding of long-term conditions among UK employers.

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

Long-term impact of workplace sickness

Unfortunately, workplace sickness generally hits SMEs the hardest. SMEs have limited resources compared to larger organisations—their teams are smaller, and their budgets are tighter. 

You’re also more likely to have employees with multiple responsibilities, so the impact on the company is far more significant if someone is unwell. This means heavier workloads for others, delayed projects, and missed deadlines. 

Aside from reduced productivity, which we have already discussed, burnout is another major risk of ongoing workplace sickness. If, for whatever reason, employees feel pressured to work when they’re unwell, their mental health could suffer, leaving an overworked and disengaged workforce. 

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That could then lead to a high staff turnover. Unsupported workers could seek other employment, leaving a skills gap and possible recruitment challenges, not to mention the financial expense of finding and training new people. In addition, the loss of staff could reduce other employees’ motivation and morale. 

Ultimately, unmanaged workplace sickness is bad for business and can seriously stifle a company’s future. Running and growing a small business in that early start-up phase should be exciting. Naturally, there will be challenges, but looking after the people who help develop a business into a success is crucial. 

What small businesses can do

So, what’s the solution? You can’t stop people from getting ill occasionally, but there are specific measures you can take to minimise workplace sickness and protect employees whilst delivering business growth. 

1. Create a supportive culture

First and foremost, a safe and supportive work environment is essential to preventing workplace sickness. Create an open company culture that promotes communication and trust between the company and its staff. 

This could take the form of regular 1-2-1s, social company events, or internal newsletters highlighting what employees around the business are up to and encouraging connection. The idea is to maintain an open dialogue across the organisation and show employees they are valued, helping them feel comfortable and confident about their health. 

2. Offer financial support

Statutory Sick Pay (SSP) is the minimum that must be paid to eligible employees during workplace sickness. However, it’s only payable after four consecutive sick days, and at just £116.75 per week, it’s often not enough to get people by, especially if they have dependants to look after. 

Budget-permitting, offering sick employees additional financial support may ease their anxiety about workplace sickness. For instance, some companies offer full pay before SSP applies. This isn’t always feasible for small businesses, but alternative benefits, like private healthcare, exist. 

3. Introduce private healthcare

This is a more cost-effective solution to reducing workplace sickness and helps connect employees with the right care source when needed. For small businesses, the typical cost to enrol your company for medical care insurance is around £45 per employee per month. 

Premiums depend on key factors like company size, industry, workers’ age range, and location. Generally, private healthcare costs much less than paying full pay to sick employees.

4. Flexible working

Stress is one of the biggest causes of workplace sickness, and flexible working can help reduce it significantly. If the nature of your business allows it, it’s worth exploring this option. 

This doesn’t necessarily mean working from home. If staff can do their jobs from home, hybrid or remote working could be the right choice, but they can also work flexibly in an office. For instance, try staggered work hours, flexible start and finish times, or compressed work weeks. 

These solutions make it easier for people to balance their professional responsibilities with their private lives, making them less likely to feel stressed and, instead, improve their performance and well-being. 

5. Offer various leave types (and encourage people to take them)

We know that Brits are unlikely to take a sick day when they need it. However, this only worsens and prolongs their sickness. On top of annual leave, encourage staff to take the break they need by offering various leave types, such as: 

• Mental health days
• Unpaid leave
• Bank holidays off
• Bereavement leave
• Birthdays off
• Volunteering days

Whether paid or unpaid, additional leave types give people greater flexibility and the opportunity to recover properly. It can also help diminish the feeling of guilt when taking a sick day.

6. Create a workplace sickness policy

Finally, a transparent sickness policy should be put in place. The rules are entirely up to you, but a team must understand what those rules are and what’s expected of them when they’re unwell. The policy should include:

• How and when sickness should be reported
• Rules around returning to work after a sickness absence
• Pay entitlement during sick leave
• Guidance on where to seek support

An internal policy ensures a straightforward procedure for managing workplace sickness. It removes any ambiguity about what staff are expected to do and the benefits they are entitled to if they feel unwell. 

Protect your business from workplace sickness

With presenteeism now considered the norm, businesses face staggering costs as workers become unproductive, unmotivated, and disengaged. 

To protect staff and a company’s future, small business owners should explore solutions like flexible working, creating an open and positive company culture, and encouraging staff to take rest breaks. 

Thanks for reading. If you have any questions about the topics discussed in this blog, please post them in the comments below and we’ll get straight back to you.