Some people think employers baulk against rehabilitation services for their employees because of the cost. But the more likely reason is they don’t really know what they are.
Broaching the subject in such terms could be seen as indelicate. But advisers can add real value to their clients’ business by outlining to reluctant employers what it can mean, the problems it can solve, the costs of not rehabilitating employees back to the workplace and the various ways they can make provision without it costing a fortune.
Absence from work cost the UK economy £13.2 billion last year as the average employee took almost seven (6.7) days off sick, according to the latest CBI /AXA Absence Survey. While 12 per cent of ‘sick days’ are thought to be non-genuine, long term absence of 20 days or more is of concern. The report says although only 5 per cent of absence spells became long term, they accounted for a massive 40 per cent of all time lost, costing £5.3bn.
The cost of absence
In 2007 the average direct cost of absence was £517 per employee – or 3.1 per cent of payroll – which includes lost production and the expense of covering absence with temporary staff or overtime. The CBI also estimates that indirect costs, such as lower customer satisfaction, add another £263 per employee per year. When these indirect costs are added to the direct cost, the UK lost £19.9bn to absence in 2007.The Health and Safety Executive has estimated that for every £1 spent on vocational rehabilitation and return to work services the return is £12. Mike Clarke, head of rehabilitation at Remploy, which provides specialist employment services for people who experience complex barriers to work, says: “If employers don’t support staff to return to work, the cost of recruiting, inducting and training a new employee is in the region of £4,667, increasing to £10,000 for more senior posts. So investing time and money in vocational rehabilitation makes sound financial sense.”
According to a report commissioned by the Vocational Rehabilitation Task Group, ‘vocational rehabilitation’ is whatever helps someone with a health problem to stay at, return to and remain in work. The authors state: “There is a good business case for vocational rehabilitation and more evidence on the cost benefits than for many health and social policy areas. Employers have a key role – there is strong evidence that proactive company approaches to sickness, and the temporary provision of modified work and accommodations, are effective and cost-effective.”
This is not just academic theorising, according to Dudley Lusted, head of corporate healthcare development at AXA PPP healthcare. “What we have seen for some time, and it is nice to see it supported by the academics Wadell and Kendall, is that rehabilitation is whatever helps someone with a health problem to return to or remain in work,” he says.
“That is quite important because a lot of people think of rehabilitation as tied to severe injury. That is one extreme of rehabilitation. We take the opposite view that it can be anything that helps people to stay in work, and also to get them back to work as quickly as possible,” says Lusted.
So how do corporate advisers address the employer approach of simply dealing with long term health problems as and when they arise?
Create a culture
Mike Clarke says: “This approach won’t allow the organisation to realise the true benefits that come from a vocational rehabilitation service,” he says, “These stem from being able to access early intervention and creating a culture in which staff will seek support early on, knowing that the expertise to help them is available.”
According to research from the British Society of Rehabilitation Medicine, if an individual has been off work for six months, there is a 50 per cent chance of a return to work. After 12 months this falls to 25 per cent.
“Early intervention can also prevent minor issues turning into serious ones,” Clarke says. “An effective return to work plan will include all the factors influencing a person’s ability to return to and sustain their job. Besides work issues, these could include housing, finance, mobility needs or personal issues such as lack of confidence or social skills.”
This might all sound above and beyond the call of duty for some employers, but there is a legal obligation employers need to be aware of.
Disability Discrimination Act
“Employers need to ensure they are aware of when an individual would be classed as disabled under the Disability Discrimination Act. If this is the case then it is important that they have made ‘reasonable adjustments’ in line with their legal obligations. In addition, if an employee has been injured at work then genuine attempts to rehabilitate staff by assisting in their recovery can mean they are less likely to seek compensation,” cautions Clarke.
Legal obligations aside, there are those nasty cost implications to consider, and this can be not just in helping someone to get fit again for work but making the workplace fit for them to work in.
“Under the Disability Discrimination Act companies need only do what is reasonable, says Lusted. But of course ‘reasonable’ is a test based on size and the bigger the employer, the more the courts will expect them to have spent time and effort to make reasonable adjustments for people. But if you are a small one man band you are expected to do something, but not to spend £50,000.”
Often employers, even those with insurance protection policies in place, don’t know where they should go for advice or assistance when staff are off sick.
Karen Sinton, director at Griffiths & Armour, says many employers and employees can get a lot out of existing Employee Assistance Programmes as a basic.
“The message to employers is that, if they have an EAP, now is the time to support it and make employees understand it can be a financial advice support line not just a stress helpline which is unfortunately how they are often labelled,” she says.
Sinton says she will very often get queries from human resources staff who know the rules as to what should go on, but don’t always know where to go to get the help to facilitate that.
“We have employer clients with a Unum PHI policy and Bupa PMI cover. One such client had an employee under assessment for PHI. Unum had said they need physiotherapy and we were able to use the PMI cover to facilitate that. The client hadn’t realised that the treatment Unum was recommending could be had under his PMI policy. We were able to get a copy of the report from Unum sent over to Bupa, which was then able to authorise treatment.
“What we say to clients is if we know what is going on with your employees we can pull it together behind the scenes for someone to benefit from the policies you have. If you can look after both aspects and have a good relationship with the client you can add quite a lot of value in those circumstances.”
Communication is key
Insurance companies are proving a key source of rehabilitation services for employers, incorporating them as part of or adjuncts to existing protection insurances. Unum, for example, provides support from vocational rehabilitation consultants through its Pay Direct and Premier (for larger schemes) services for group income protection policyholders. Norwich Union provides rehab through its Occupational Health Services under its Protection Services range (PMI, income protection and group risk). First Assist offers rehab through its Impact Solutions service, which is complementary to its core EAP. Insurers are as keen to minimise claims as employers should be. Just recently Canada Life launched a bespoke Claims Management Services+ service to help employers find the right methods of dealing with long term sickness absence and claims, through a programme focusing on communication between all concerned parties. It is free for all group income protection (GIP) schemes with an annual premium of over £100,000.
The emphasis on communication and early action is not new, and L&G has been in the market some time with its early notification initiative on its GIP schemes. For schemes with over 500 members, Legal & General will pay a bonus of 5 per cent of premiums to employers who notify them of at least 80 per cent of absences lasting over a month within six weeks.
Rehab services are not just being linked with group income protection policies. Brit Insurance also has recently launched its Absence Management Rehabilitation service free to its Employers’ Liability policyholders.
At a broader level, insurers are also calling for more support from the Government. There was general welcome from the market when HM Revenue and Customs agreed in December last year to exempt employer-provided annual health screenings and medical checks from tax. But Norwich Union Healthcare is one provider pushing for more. A report it commissioned from NERA Economic Consulting suggests an offset against National Insurance contributions would be the most appropriate way to incentivise employers to invest in a clearly defined set of products that are focused on early intervention, return to work and rehabilitation.
Alex Marshall, national sales manager of Norwich Union Occupational Health, says: “We are already seeing key providers starting to move away from traditional insurance-based offerings in favour of new propositions that encompass rehabilitation and return to work services. If this appetite for change were supported by increased investment in employee health, the industry could revolutionise the relationship between stakeholders.”
Case Study: Anglian Water
Anglian Water has its own in-house occupational health team and a non-contributory company healthcare scheme administered by Axa.
If an employee has an accident at home or work it can provide first day physio advice through a helpline. Individuals can then be put into physio treatment. If they have a chronic condition or keep needing treatment they can go into a rehabilitation programme to be assessed and helped back to work.
“From an organisation point of view it means you have a base line and can see what the person can do,” says Sonja-Louise Schwartz occupational health manager at Anglian Water. “We are introducing a 4-week plus system for musculo-skeletal problems where the employee may be having physiotherapy but we would bring them in for a fitness assessment after four weeks so we can see where their muscle weakness is, whether it needs medical intervention and assess what is going on.
The company has found that having phone physio advice has reduced the number of people having physiotherapy. “Once it has been established employees don’t need medical attention we find often what people just need is exercise. The phsyio will follow it up by phone so there is that protection but for many people just doing the exercises prescribed is enough,” comments Schwartz.
The company is also trailing a programme through Alliance Surgical, which provides a network of consultants. “When our staff go to one of their consultants, that consultant will, with the permission of the employee, liaise directly with our occupational health department and we can then plan their return to work much faster.”
The absence gap between manual and non-manual workers averages 7.6 days and 6.1 days respectively.
Sectors with the highest rates include the public sector (9 days) and utilities (7.6 days), while IT, professional services, and hotels, restaurants and tourism recorded the lowest with 4.5, 4.2, and 4 days respectively.
In the public sector, the highest absence rates were found in health/social care services (12.6 days) and police & probation services (9.9 days), while education saw lower overall levels (7.5 days).
Minor ailments, such as colds, were named as the most significant cause of short-term absence, while back pain came second.
Non-work-related stress, anxiety and depression is the most significant cause of long-term absence among non-manual staff.
Illness was easily the most common reason for absence, but over half of employers say staff taking time off to deal with home and family responsibilities is a cause of absence.
Asked what three steps the government could take to help employers reduce absence: 56 per cent of respondents asked for more flexible GP hours, 60 per cent wanted a better partnership between GPs and occupational health professionals
More than two-thirds of employers want them to prioritise the introduction of capability-focused medical certificates. “Fit notes”, as some have dubbed them, would help an employer understand what duties an employee can perform, helping them to make arrangements where possible for an earlier or phased return to work.