• International Workplace
  • 31 January 2017

Spotlight on the costs of ill health

An unhealthy workforce significantly hurts the UK’s economy and society due to lost productivity, reduction in income tax receipts, increases in long-term sickness and increased healthcare costs, according to research by The Work Foundation.

The costs to the taxpayer – benefit costs, additional health costs and forgone taxes – are estimated to be over £60bn. And the combined costs of sickness absence, lost productivity through worklessness, and health-related productivity losses, are estimated to be over £100bn annually. This is greater than the current annual budget for the NHS.

Better management of employee health can minimise these costs and, according to the HSE, there are many other benefits to be gained from successful leadership in health and safety, which can include:

  • reduced risks;
  • lower employee absence and turnover rates;
  • fewer accidents;
  • lessened threat of legal action;
  • improved standing among suppliers and partners;
  • better reputation for corporate responsibility among investors, customers and communities; and
  • increased productivity, because employees are healthier, happier and better motivated.

As an example of effective health and safety management, the HSE cites Sainsbury’s, for which an external health and safety audit identified a need to develop a unified approach, and also recommended more direction from the board, to develop an effective strategy.

The result was a radical revision of the company's approach, including:

  • the group human resources director creating a health and safety vision, supported by a plan with targets over three years; and
  • training on health and safety responsibilities was introduced for all board directors.

This has resulted in:

  • the Board providing a role model for health and safety behaviour;
  • 17% reduction in sickness absence;
  • 28% reduction in reportable incidents;
  • improved morale and pride in working for the company; and
  • raising the profile of health and safety so it is becoming embedded in the culture of the organisation.