How preventative benefits can provide the solution
Adrian Matthews, Head of Employee Benefits at MetLife UK
June 11, 2024
The UK economy, having been stagnant for the last two years, is finally showing green shoots of recovery with stronger-than-expected economic growth at the start of 2024 – tracking a clear route to recovery1.
While there is cause for optimism, it is still early days and employee retention, and productivity concerns linger on. Indeed, when you look at the current employment landscape, it doesn’t make for the most positive of pictures.
The latest figures on the UK jobs market indicate early signs of it stalling. This is due to the number of people out of work rising to 4.2%2, the rate of people with a job dipping and the economically inactive (those not in work or actively looking for employment) ticking higher.
On top of this, the most recent update from the ONS reports there are now over 2.5 million people who give long-term sickness as their main reason for not being able to work. A major contributor to this being the fallout from the Covid-19 pandemic, with the overall long-term sickness absence volume rising by over 400,000 and cases of ‘depression, bad nerves or anxiety’ impacting and hindering over 5 million people from returning to the world of work3.
Tony Wilson, director at the Institute for Employment Studies, warns that the absence of skill from the workforce will start to take its toll on productivity. This may start to impact long-term growth due to “firms not meeting demand because if they can’t fill jobs, it might mean they have to pay people more to fill those jobs or...close their business down because they can't cope. It impacts overall productivity and might also mean less competition."4
Indeed, currently in the UK, the standard rate of employee absence sits at 7.8 days per employee per year5, jumping to its highest rate in a decade. According to the CIPD’s Health and Wellbeing at Work report, this costs business an average of £1.75 million for an organisation with 1,000-employees, when taking into account temporary employees, admin, lost productivity, recruitment and training, demonstrating the importance of protection products being in place for a workforce.
So, what does this mean for employers wanting to shore up their businesses in a cost-conscious climate? And, perhaps more importantly, how can they get their people teams in the best position possible for future success?
Getting people back to work is very likely to be one of the high agenda policies in the run up to General Election this year, however it is vital that businesses start acting now to ensure people remain and feel fully supported in their return to work.
Here, we look at three core pillars employers – of all sizes – should consider when it comes to improving employee retention and prevention of long-term sickness absence:
1. Spend time to understand the unique challenges your employees are facing, and what you can do to help provide greater purpose and meaning to improve engagement.
2. Provide that much-needed stability to your employees by offering high quality workplace benefits to ensure they feel confident in the face of future challenges.
3. When doing this, ensure to recognise rising costs by offering affordable support for employees (and their families) in sickness, and preventative tools to reduce future absence.
The value placed on employee benefits is undeniable – particularly in the current job market. Our research highlighted there is a real people demand for high quality workplace benefits, with two in five (40%) of UK employees admitting they would choose a job that offers a lower salary, if they knew it guaranteed them generous employee benefits (i.e. income protection, death in service, hybrid working)6. 34% would also like to see mental health support and wellness packages.
At MetLife, we offer a limited term option to our Group Income Protection product*, helping businesses keep their employees happy and healthy when long-term illness or injury occurs, as we are acutely aware of how significant the difficulties can be for businesses of any size. The service not only provides monthly payments for long-term absence, but also offer supporting services such as GP24 (a 24/7 virtual GP service), early intervention, rehabilitation, and an employee assistance programme. We also offer return-to-work pathways are personalised to the employee to ensure success and minimise absence duration, at times preventing an absence becoming long-term in the first place.
We do this because we know that in current climates, now more than ever, employers need to balance providing a fuller suite of employee benefits at an affordable cost to the business. Having the choice of a shorter duration of cover can reduce costs by over 50%, protecting employees for “the now”, whilst also protecting overheads and helping to attract and retain the best talent for the future.
Sources
2 https://www.bbc.co.uk/news/business-68820103
3 ‘Too Ill to Work’: A deeper look at what the figures show | National Statistical (ons.gov.uk)
5 CIPD, Health and Wellbeing at Work report, 2023
6 Research conducted by Censuswide on behalf of MetLife UK amongst 2,009 employees in January 2024.
*Limited Term Group Income Protection provides financial support and rehabilitation services to employees if they’re absent from work due to an illness or injury, for between 1 to 5 years, with the option to receive a lump sum benefit of up to 5x benefit (or salary equivalent when allowing for basic income benefit), with an overall maximum of £1 million.