Although most organisations are not aware what ill health really costs them time and money, each year over 2.3 million cases of ill-health are experienced by workers in the UK, resulting in around 40 million working days lost. It is estimated that the cost to British employers is £4 Billion per year.
The true cost to individual business is determined by a number of factors including number of employees, working environments and so on, but generally around 9% of an organisations turnover is lost to absenteeism through ill health.
The cost of insurance premiums and employee medical claims is at an all-time high and is continuing to rise. Companies spend tens of thousands of pounds on initiatives to deal with sickness costs including private medical insurance (PMI) for their staff which can typically cost upwards of £500 per employee per year.
Many employers believe that their insurance covers most costs but the reality is usually very different. There are a number of costs that are not normally covered by insurance such as lost time, sick pay, overtime, temporary labour, production delays, loss of business reputation etc. All of these have an adverse effect on productivity. The amount you can re-cover certainly depends on your individual policy terms and there are always a number of uninsured costs which can often be several times more than the insured costs. A poor claims record will increase your premiums or in some cases insurance cover can be refused.
With the UK gradually climbing out of the recession, both small and large companies have needed to consider cutting costs. Organisations that ensure the high costs associated with core benefits, such as pensions and PMI, will be looking to make further savings by slashing fringe benefits.
Today, more and more companies are turning their attention to Wellbeing Initiatives as it is a much more cost effective strategy and a proven method in reducing costs through ill health. For less than half of the cost of PMI, organisations can implement a number of health initiatives such as Employee Health Screening (from only £24.95 per person), Health Promotion Workshops, Health Events, Employee Assistance Programmes and Health/Stress Audits through Healthy Performance. Not only does this give employers a detailed insight into employees health it also provides the opportunity to take a proactive approach to reducing the cost of sickness whilst encouraging employees to adopt healthier lifestyles. Furthermore, organisations that offer these kinds of health initiatives are valued far higher by their employees and as a result, productivity, morale and staff retention increases. Organisations with high standards of employee health and wellbeing are generally the most successful; this is irrespective of their size or industry.