Ford electric vehicle factory in Michigan. — © AFP

In the UK, £25 billion is the additional, so-called ‘hidden cost’ to businesses of the reduced productivity of people working while sick. However, this figure is lower worldwide, as UK workers are among the least likely to take sick days and most likely to work while sick.

The analysis comes from the Health and Wealth Commission of the centre-left Institute for Public Policy Research (IPPR) and shows that the annual cost of worker illness has risen by £30 billion since 2018. The majority of this extra cost (£25 billion) is due to lower productivity; only £5 billion is due to an increase in sick days.

Applied to the economy as a whole, this means that employees now lose an average of 44 days of productivity due to illness (compared to 35 days in 2018). In addition, they lose a further 6.7 days due to illness (compared to 3.7 days in 2018).

To calculate the cost of these productivity losses due to presenteeism or absenteeism, the researchers used the net daily wage of a median-paid worker (salary minus tax and national insurance contributions). This wage cost was then multiplied by the number of days lost, which is the total number of workers in the UK. This method is regularly used to calculate lost output, although it is probably an underestimate, as most workers would produce more than their wages correspond to.

With the right support in a suitable job, people with certain health conditions can benefit from good work. However, working while sick can also be counterproductive. When employees are forced to work while sick – due to a poor work culture, limited access to sick pay, financial insecurity or other factors – their own recovery time can be slowed, their risk of further illness later on can increase, and they can spread infectious diseases to others – all of which reduce productivity.

People from marginalised ethnic groups, those in lower-skilled jobs and workers without formal qualifications appear to be more likely to work despite poor health. Black and Asian people, for example, are twice as likely to work despite illness as white British people, all other things being equal.

To address these problems, the IPPR proposes a health plan that redefines the role of companies in healthcare: cracking down on companies that harm health and expanding those that create good health.

The think tank argues that this would help the new government achieve health, prosperity and economic growth.

The plan includes:

• Incentives: A new tax incentive for companies that commit to significant improvements in the health of their workforce, including the safety, flexibility and pay of their employees, with a focus on SMEs.
• Regulation: A new “Do No Harm” obligation for employers, regulating them in terms of health effects and not just safety factors
• investment: New mandatory reporting on employee health – modeled on climate emissions reporting – to make it easier for private investors to distinguish between companies that promote health and those that harm health.

Paul Devoy, CEO of Investors in People, commented on the measures: “All the evidence shows that there is a clear link between a positive wellbeing culture in the organisation and productivity and sustainable business performance. Focusing on systematically leading, supporting and improving a wellbeing culture has long-term benefits for all employers who are committed to their employees.”