Employers in dark over employee absence and healthcare costs, survey shows

A majority of employers are failing to monitor the cost of employee healthcare and a third are not even monitoring sickness absence, according to research from Aon Hewitt.

The Aon Hewitt Benefits and Trends Survey, which polled 185 employers in the UK, representing a combined workforce of 650,000 employees globally, concludes employers are missing opportunities both to improve the health of their workers and to cut costs because they are not understanding and measuring sickness absence.

A third – 32 per cent – of those polled said they did not know how many days employees are absent through ill-health annually.  Of those who could give a figure, 60 per cent were not very confident of its accuracy. The survey also found 53 per cent of respondents admitted that they do not measure the total cost of healthcare. A further 14 per cent did not know whether their organisations measure the total cost of health.
A lack of integration between absence and healthcare strategies is compounding the issue says Aon Hewitt, with 13 per cent of respondents viewing the components of their benefits programme completely separately, and another 36 per cent saying they are only loosely related.
Of those who do measure the total cost of their healthcare, many seem to be underestimating it, says Aon Hewitt. The vast majority of survey respondents said that health costs their organisation less than £1,000 a year per employee. However, past research from Aon Hewitt has shown a figure of between £2,000 and £3,000 per employee per year is more accurate.
Two thirds of those who do not measure the cost of absence said they would like to measure return on investment in employee health.  
James Kenrick, Healthcare consultant at Aon Hewitt says: “There is a widespread lack of knowledge among the UK’s employers about levels of absence through sickness and the wider cost of healthcare. This suggests a lack of focus on absence rates and on health generally. It is clear that there is a need for healthcare measurement and for tangible improvement on the current situation – but without an accurate picture of sickness absence and healthcare costs, employers will struggle to make and measure improvements.
“Employers who are not measuring rates of absence through sickness should start as soon as possible. In our experience, once management is aware of high sickness rates and the corresponding costs, it takes only a modest degree of intervention to bring rates down swiftly.  The sorts of actions employers can put in place quickly, – and often at relatively low cost – include return-to-work interviews and triggered referrals for rehabilitation.”