Employers get £61 of every £100 they spend on group income protection back through avoiding Occupational Sick Pay (OSP) and other costs associated with sickness absence, according to a new report from the Centre for Economics and Business Research (CEBR).
The study shows that actively using early intervention services included as part of GIP packages can increase this payback by around 10 per cent.
The report also finds early intervention services offered through a group income protection policy can reduce the length of long-term sickness absence by 17 per cent.
Sickness absences of six months or more cost a typical businesswith 500 employees around £770,000 per year, the report says.
The report, commissioned by employee benefits provider Unum, shows that actively using early intervention services such as vocational rehabilitation, can lead to a reduction of 60 weeks for the average long-term absence of seven years.
Mental health conditions saw the greatest impact, with an 18 per cent reduction in the duration of absence as a result of using early intervention services.
Early intervention services highlighted in the report included vocational rehabilitation services, mental health first aid, cognitive behavioural therapy, physiotherapy, positive ageing guidance and early intervention helplines.
The report quantified the main costs of long-term sickness absence as being OSP paid to the absent employee, the salaries of replacement staff, and the recruitment and training costs associated with replacement staff as well as a quantifiable loss in productivity.
It found that the most typical causes for long-term sickness absence are mental health and musculoskeletal conditions. CEBR suggests this is a growing problem – particularly with the changing make-up of the workforce and the number of older workers increasing, the rate of long-term sickness absence is expected to grow by 4 per cent by 2030.
Unum CEO Peter O’Donnell says: “Our award-winning rehab team sees the impact that early intervention can have on reducing long-term sickness every day – from both the financial side for the business – and the personal side for the employee. The huge costs associated with long-term absence could be mitigated by investing in GIP policies and actively taking up these services. Advisers have a key role in educating clients on the impact stepping in early can have. As a starting point, clients with existing policies should be encouraged to take up the services they have access to.”