UK government sets up body to tackle absence in the workplace

The new vocational rehabilitation task group set up by the UK government to help ill or injured people stay in or return to work has been welcomed by Norwich Union Healthcare as being pivotal in reducing the yearly £13bn cost of absence to the UK economy.

In particular, the new taskforce will be looking at why businesses do not provide more return to work services and what needs to be done to increase understanding and ensure wider provision of support.

These moves were particularly welcomed by Norwich Union Healthcare who, last year, commissioned economic consultancy, NERA to look into why such services were not taken up by employers. The report found how market failure reduces the likelihood of employers offering services which could allow their staff to return to work quicker after sickness or injury.

This market failure, the report said, is caused by a number of factors, including:

• No one stakeholder has an over-riding incentive to invest in early intervention through the workplace

“The cost of absence through illness has a huge impact across the board. It is a major issue that needs to be addressed

Gil Baldwin, managing director of Norwich Union Healthcare

• The supply market for workplace health interventions and rehabilition (ie using physiotherapy and psychological therapies) is weak, partly because of low demand and lack of innovation in product design

• Employers are well placed to provide workplace interventions but levels of investment remain low (as employers bear only part of the cost of absence - with society bearing the majority of the costs)

• The benefits of early intervention accrue over long time period, so an employer investing now may not see a return on that investment if an employee switches jobs

The report suggests that fiscal incentives, for example match funding or tax credits could be an efficient and effective way of encouraging take up of activity which has a wider social and economic value.

Gil Baldwin, managing director of Norwich Union Healthcare, said: "The cost of absence through illness has a huge impact across the board. It is a major issue that needs to be addressed."