Manufacturing – sickness absence – Stalling on sickness

The past few years have seen employers make good progress on sickness absence, but momentum has now slowed. Drawing on the findings of an important annual survey of manufacturing firms, Professor Sayeed Khan considers how government and employers can inject further improvement in this area and benefit from the associated productivity gains.

With the UK economy still in the doldrums the country needs to pursue every path to improve its financial performance. Doing more to promote good health among the workforce, and achieve lower absence rates as a result, is one important way of ensuring that people with key skills are in work and contributing to innovation and growth. 

The findings from this year’s EEF/Westfield Health Sickness Absence and Rehabilitation Survey – the ninth annual survey of its kind – show that the UK manufacturing sector still enjoys low rates of absence and has made significant advances in zero-rate absence. However, the results also point to room for improvement, particularly among larger firms, which have higher absence rates.

After many years of gradual decline in sickness-absence levels, rates have more or less plateaued. As such, while the overall rate has fallen substantially since 2007 – when it was 3 per cent, amounting to 6.7 days a year for every employee – this year it is unchanged at 2.2 per cent (5.1 annual days for every employee).

Delving deeper below this headline result, however, there is a sharp divergence between short-term and long-term sickness absence. While one-third of companies reported a decrease in short-term sickness-absence levels, almost two-fifths (37 per cent) identified an increase in long-term sickness levels – a rise of 5 per cent over the last year.
The positive short-term sickness-absence trend is likely to reflect a number of steps employers have taken in this area, including setting ambitious absence targets, training line managers and providing employees with access to occupational-health services.

The contrasting long-term sickness issue is less easily managed. Businesses reported mental-health issues, such as stress and anxiety, as the biggest factor in long-term absenteeism. They also ranked these conditions as the most difficult to respond to, in terms of making workplace adjustments to ease employees back to work. Surgery and medical interventions were also cited as other major long-term barriers to rehabilitation in the workplace.

A second divergence has also become apparent between manual and non-manual workers, with the former taking double the number of days off sick (6.7) compared with their more sedentary counterparts (3.2) – reversing the improving trend for manual workers over the past five years. Non-manual workers continue to have a year-on-year decrease in absence.

Another potentially positive trend highlighted by the survey findings is zero-sickness absence rates, which continue to improve (51 per cent compared to 46 per cent in 2011). However, the improvements in this area should be viewed with caution, as they could be contributing to an emerging problem in some organisations of ‘sickness presenteeism’.

Are fit notes fit for purpose?

The fit note is slowly gaining popularity among employers, with 30 per cent of survey respondents finding it preferable to the previous sick-note system. Nevertheless, it has a long way to go, as 58 per cent have yet to notice any difference in terms of effectiveness. Cultural shifts of this magnitude take years to embed, so it may need to be in operation for at least five years before we’re in a position to truly judge its impact.

The main benefit of the fit note is, of course, the opportunity for the medical professional to identify workplace adjustments that could allow their patient to return to work more quickly. The survey demonstrates that this benefit is not being fully realised, with only 10 per cent of respondents receiving fit notes signed ‘may be fit for work’.
Better training for GPs and proactive management by employers, along with increased workplace flexibility in matching these employees to the types of roles they can perform, could dramatically improve performance in this area.

The Government must exhibit more urgency in rolling out its fit-note training for all GPs. So far, only 3500 GPs out of 41,350 have received face-to-face training, which will assist them in signing people on for work, rather than off, and give them a better understanding of the ‘grey’ area that is ‘may be fit for work’. Along with the proposed electronic fit note, with prompts and options to guide GPs, this training will make a huge difference.

Employers also need to play an active role. The survey found that companies are much more likely to receive fit notes with the ‘may be fit for work’ option ticked if they proactively contact their local GPs about workplace adjustments they can offer. Companies that adopt this approach will, generally, for every ten fit notes receive two more certificates signed off as ‘may be fit for work’ than a company that does not contact their GP.

Best practice in managing absence

Contrary to popular opinion, the survey suggests that restricting sick pay to the statutory minimum does not discourage sickness absence, with levels remaining similar with or without enhanced payments. However, it does show that the following three core elements are used in effective absence management: setting absence-rate targets, training line managers and occupational-health provision.

Considering the first ingredient, there is a correlation between setting sickness-absence targets and good performance on absence. This year saw 13 per cent of all companies set sickness-absence targets of below 2 per cent, with 70 per cent of these companies achieving their goal. There is a clear message to the 45 per cent of businesses that don’t set any targets whatsoever: they are missing out on a strategy that delivers tangible results.

More also needs to be done in terms of training, as fewer than half of the businesses responding to the survey said they are training line managers to handle short and long-term absence, which has a significant impact on attendance levels.

There is more positive news in terms of the third element, with 75 per cent of respondents providing occupational-health support – a service that can help reduce both short and long-term absence.

Interestingly, companies also reported a significant drop in their use of NHS occupational-health and GP services. Given the evidence of reduced pressure on public services, EEF believes that there is a real financial case for the Government to implement the recommendation in the Frost/Black report² to introduce an Independent Assessment Service (IAS).

Best practice in rehabilitation

Companies are also using a range of methods to help employees return to work. One of the most effective rehabilitation measures is where employers offer altered working hours, or reduced hours (68 per cent). However, employers need to put more energy into making other rehabilitation measures work, such as developing return-to-work plans, intervening early before acute conditions become chronic, and having occupational-health professionals assess an employee’s fitness for work.

It is clear that such action pays off. Employers who say they do not face any barriers to rehabilitate their staff following a period of sickness absence record 1.6 fewer days off work for every employee, compared with those who do identify barriers. If these findings are extrapolated, then those manufacturing employees who don’t have access to rehabilitation support are losing a staggering 4m days each year.

Such strategies are becoming even more crucial, especially given the worrying trend of increasing long-term sickness absence, and it is important that employers adapt specific absence policies and targets for manual workers, who continue to record double the sickness-absence rate of non-manual workers.

But it is also evident that employers need additional support in managing long-term sickness absence. To this end, it is important that the Government recognises the taxable status of costs incurred by employers for rehabilitation and workplace interventions, as well as the potential problems caused by reported NHS capacity issues (29 per cent of companies reported this as a barrier).

Identified as a recommendation in the Frost/Black report, there is a real case for providing tax relief for those companies who are investing in workplace adjustments and who are providing interventions to get people back to work and keep them in work – for example, physiotherapy, health and well-being promotion, counselling, private medical treatment, or health-care insurance.

As stress/mental illness was found to be an important factor behind long-term absence, the Government should also continue to recognise the contribution of employee assistance programmes (EAPs) in providing early intervention for psychological conditions, and maintain its current favourable tax treatment – another proposal outlined in the Frost/Black report.

Counting the cost of sickness

Businesses themselves could do more to gain better control of the cost of sickness absence by understanding and measuring its full impact. Currently, according to the survey’s findings, only 22 per cent of firms are doing so and there is no standard method being applied. Better understanding will help drive more effective sickness-absence targets, which are proven to help reduce lost days.

In light of the findings, EEF plans to help companies calculate the true costs of sickness absence, by using a standard best-practice methodology as part of a sickness-absence toolkit.

Hidden costs

The cost of absence also needs to take account of another, often hidden, cost – presenteeism. This is an emerging issue, which should be defined as lost productivity that occurs when employees are not appropriately trained, are unmotivated, or attending work when ill. It is the first time the EEF survey has addressed presenteeism, especially larger companies, and just over half (55 per cent) of all respondents expressed some concern about the issue. The principal concerns were the impact of presenteeism in relation to long-term health conditions (18 per cent), short-term illness absence (17 per cent), and unmotivated staff (15 per cent).

Unlike sickness absence, only 5 per cent of companies say they monitor or measure lost productivity, or the economic cost caused by sickness presenteeism. Indeed, businesses could be overlooking a large hidden cost, which both The Work Foundation³ and the Sainsbury Centre for Mental Health⁴ suggest could exceed the £13bn annual cost of sickness absence.

There is also a clear role for the NHS in developing  more effective policies and strategies for the clinical management of long-term health conditions, so that these employees can be more productive in the workplace. Ultimately, presenteeism needs further exploration and government research to help develop methodologies for companies to manage and calculate the associated costs.

Summary

Employers have made excellent strides in boosting attendance and enhancing employee health, which is reflected in the downward trend of sickness absence over the past decade. However, the survey findings demonstrate that this progress has now stalled, particularly because of difficulties in rehabilitating employees with long-term illness, together with increasing absence rates among manual workers.

While companies can take further steps to improve attendance, the Government must meet business half-way. If those in power are keen on promoting economic growth then they must make it easier for employers to rehabilitate employees with long-term health conditions. The Government must also invest in training and digital technology to ensure the fit-note system works more flexibly.

Developing a better understanding of the true cost of sickness absence and sickness presenteeism will help focus more attention on this important area. It will help in developing sensible policies and strategies that enable employees to make use of their talents according to their medical capabilities, and businesses to maximise productivity. 

References
1    For a copy of the EEF/Westfield Health Sickness Absence and Rehabilitation Survey 2012, visit www.eef.org.uk
2    Black, C and Frost, D (2011): ‘Health at work – an independent review of sickness absence’, DWP/DH
3    Ashby, K and Mahdon, M (2010): ‘Why do employees come to work when ill? An investigation into sickness presence in the workplace’, The Work Foundation
4    The Sainsbury Centre for Mental Health  (2007): ‘Mental Health at Work: Developing the business case’, policy paper 8

Professor Sayeed Khan is chief medical advisor at EEF – the manufacturers’ organisation.

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