SICKNESS ABSENCE AND REHABILITATION SURVEY 2012

Transcription

1 May/212 SICKNESS ABSENCE AND REHABILITATION SURVEY 212 With our economy still suffering from weak growth, we need to be looking at every opportunity to improve our economic performance. Good health and low absence rates ensure that people with key skills are in work and contributing to innovation and growth.

2 Contents Summary 1 Recommendations 3 Westfield Health's market view 5 Introduction 6 Absence rates and trends 7 Causes of absence 11 Management of sickness absence 14 Rehabilitation 19 The fit note (year 2 of operation) 21 Presenteeism 25 Appendix 1: About the survey 28 Appendix 2: Benchmarking data Appendix 3: Company size categorisations 32

3 1 Summary This is our ninth national survey of EEF members which looks at their experience of sickness absence and rehabilitation and the second to be undertaken in partnership with Westfield Health, a leading UK provider of not-for-profit health insurance. With our economy still suffering from weak growth, we need to be looking at every opportunity to improve our economic performance. Good health and low absence rates ensure that people with key skills are in work and contributing to innovation and rowth. Our survey has also provided an opportunity to assess further the impact of the fit note after its second year of operation following its introduction in April 21. The survey questionnaire was sent to all EEF member companies, as well as members of EEF Northern Ireland and Scottish Engineering. We received 429 responses, giving a response rate of 17, similar to previous surveys. The results help us to identify key sickness absence issues which need to be brought to the attention of the Department of Work and Pensions (DWP) and other important stakeholders. As in previous surveys, there was a high response rate from SMEs with up to 25 employees. Again, nearly four-fifths (79) of the respondents in our survey were from this sector. Increasingly, concerns have been expressed by EEF members not only about sickness absence but also about presenteeism at work and, more specifically, sickness presenteeism. Our survey considers this issue for the first time. Some of the commentary in this report also considers some of the recommendations contained in the Dame Carol Black and David Frost report, Health at work an independent review of sickness absence. 1 Sickness absence rates have more or less plateaued Our survey shows that we still have low rates of absence, but after many years of gradual decreases in sickness absence, rates have more or less plateaued. The sickness absence rate is unchanged this year at 2.2 following a steady decline since 27 when the rate was 3.. The average number of working days lost to absence has shown a marginal increase from 1 Dame Carol Black and David Frost, 'Health at work an independent review of sickness absence', November days per employee last year to 5.1 days per employee this year, compared with the 27 average of 6.7 days. Small businesses continue to have a lower average rate than larger firms. Significant increase in employees having no sickness absence We have monitored no-sickness rates over a five-year period, and the number of employees having no sickness absence has again increased, to 51 (from 46 last year). The proportion of employees taking no sickness absence during the year is at an all-time high of 51 and comparable to the 52 cited in the Black/Frost report. There are many factors which can influence the nosickness absence figure, including the setting and achieving of sickness absence targets. This year saw 13 of all companies set stretch sickness absence targets of below 2, and 7 of these companies achieved their target. This year has also seen nearly three-quarters of firms (72) having more than 4 of their employees with zero absence, up from 58 in 21. Divergence between manual and non-manual workers Manual workers continue to show double the absence rate of non-manual workers, at 6.7 days per employee compared to 3.2 for non-manual workers. However, absence rates for manual workers show an ongoing improvement over the past five years with a drop of almost a quarter (24) between 27 and 211. The marginal increase in overall average days lost per employee this year is due to an increase in sickness absence in manual workers. Non-manual workers continue to show a year-on-year decrease in absence. Divergence between short-term and long-term sickness absence Our evidence suggests that employers are being more effective in managing short-term sickness absence. Every year over the past five years more employers have reported a net decrease in levels of short-term sickness absence. This year one-third of companies reported such a decrease. This reflects the steps that employers have taken in this area, including setting stretching absence targets, training line managers and providing employees with Occupational Health (OH) services.

4 Sickness Absence and Rehabilitation Survey May The picture is not the same for long-term absence; almost two-fifths (37) of companies saw an increase in long-term sickness levels an increase of 5 over last year. This increase may be explained by a reported jump since the last survey in long-term sickness absence due to mental health problems such as stress, anxiety and depression, which often result in longer periods of sickness absence. In terms of companies making workplace adjustments, stress was ranked the most difficult for which to make adjustments, followed by musculoskeletal disorders (MSDs) and then surgery/medical interventions. Barriers to rehabilitation Our survey considers the various barriers which can impact the management of sickness absence. Employers who say they do not have any barriers to rehabilitation, on average, have 1.6 fewer days of sickness absence per employee than those who identify barriers. This equates to just over four million lost days across UK manufacturing as a whole. Clearly, employers need additional support to manage long-term sickness absence. It is important that tax treatment of the costs incurred by employers for rehabilitation and workplace interventions is recognised by government, as well as the potential problems caused by reported NHS capacity issues (29 of companies reported this as a barrier). Provision of sick pay by SMEs The Black/Frost report suggested that a disproportionate number of SMEs were not paying Statutory Sick Pay (SSP) before employees went on to receive Employment and Support Allowance (ESA). Our survey shows that 99 of SMEs are providing some form of sick pay. We also asked whether companies are able to make adjustments if they receive may be fit for work fit notes. The number of may be fit for work fit notes that companies are able to accommodate by making adjustments varies greatly. Thirty-eight per cent of employers are able to accommodate all such requests whilst 18 of employers do not accommodate any such requests; these are more likely to be smaller companies. We found that employers are much more likely to receive fit notes with may be fit for work if they proactively contact their local GPs about workplace adjustments they would be able to offer. Our results showed that, for every ten fit notes received, companies that had contacted local GPs received two more certificates with may be fit for work than companies that had not contacted the GPs. Is presenteeism an issue? The issue of presenteeism is starting to be discussed by firms in our survey. Just over half (55) of all respondents expressed some sort of concern about presenteeism. The principal concerns associated with presenteeism were about long-term health conditions (18), short-term illness absence (17) and unmotivated employees (15). Greater concern was expressed by larger companies than by smaller companies. Unlike sickness absence, only 5 of companies say they monitor or measure lost productivity due to sickness presenteeism, or the economic cost involved. This is an area we must continue to watch, as some estimates put the cost of presenteeism at one or one and a half times that of the annual cost of sickness absence. The fit note: year 2 progress The fit note has now been in operation for two years. Our survey shows that almost 3 of employers find the new system more helpful than the previous sick note system; 11 find it less helpful and 58 of employers do not currently see a difference. Although the fit note is showing some benefits, we should remember that it takes many years to achieve cultural change, and it is probably more realistic that we should reflect on the success of fit note implementation after it has been in operation for five years or more. There is still some way to go, and we should not be complacent.

5 3 Recommendations Business Employers need to take the initiative in making contact with their local GPs about the work their staff do and discuss what can be done in practice, especially when GPs declare that employees may be fit for work. Our survey shows that the more companies put into the fit note process, the more they get out of it. Companies are using a range of measures to help employees return to work. One of the most effective rehabilitation measures is where employers offer altered or reduced working hours (68). However, employers need to put more energy into making other rehabilitation measures work, such as developing return-to-work plans, allowing early interventions to prevent acute conditions becoming chronic and having OH representatives assess an employee s fitness for work. It is important to determine the true direct cost of sickness absence to the business. Currently only 22 of firms are measuring this cost and they are doing this in a very wide variety of ways. Understanding the cost of sickness absence will help companies drive more effective sickness absence targets. Companies must establish specific absence policies and targets for manual workers, who continue to have double the sickness absence rate of non-manual workers. Specific policies and strategies must be established for managing presenteeism in conjunction with existing sickness absence policies. Government We have always accepted it would take time to deliver the change in culture and practice that the fit note is designed to achieve. However, the evidence now shows that the government needs to be more proactive in bringing about this change if the full benefits are to be realised. 41,35 in the UK operating in 1,1 practices 2. So far, 3,5 GPs have received face-to-face fit note training. In addition, the government should introduce the electronic fit note as soon as possible in 212. Government must implement the recommendations of the Black/Frost report to provide tax relief for companies that are investing in workplace adjustments and providing interventions to get people back to work and keep them in work. Such measures may include physiotherapy, health and well-being promotion, private medical treatment or health-care insurance. Government must also implement the recommendations of the Black/Frost report to introduce an Independent Assessment Service (IAS). Our survey suggests that OH provision helps to reduce both short and long-term absence rates. A quarter of companies in our survey currently have no OH provision. Stress/mental illness was found to be an important factor in our long-term absence data. Government should therefore continue to recognise the contribution of Employee Assistance programmes (EAPs) in providing early intervention measures for stress and mental illness, and maintain its current favourable tax treatment as recommended in the Black/Frost report. Employers have concerns about presenteeism from employees with long-term health conditions. This suggests that the NHS needs to develop more effective policies and strategies for the clinical management of long-term health conditions so that these employees can be more productive in the workplace. The government should help employers by looking at the costs of sickness presenteeism to both industry and the economy and develop effective performance measurement and monitoring indicators. In particular, government needs to regalvanise its efforts to embed the fit note and reap greater rewards by facilitating the training of the medical profession. This includes GPs, of which there are 2

6 Sickness Absence and Rehabilitation Survey May EEF It is recommended that EEF develop a template to help companies calculate the direct costs of sickness absence and include it in the EEF sickness absence toolkit. There is currently no standard methodology which companies follow and no accurate picture of the true cost of sickness absence. EEF should encourage research to help develop methodologies for companies as they calculate the costs of presenteeism and strategies for managing presenteeism. It is important to discuss with government the survey results and their implications to inform their response to the Black/Frost report. EEF should also modify next year s survey to allow us to forecast with greater accuracy the extent to which employees leave on ill-health grounds.

7 5 Westfield Health's market view Westfield Health is once again delighted to support EEF s 212 Sickness Absence and Rehabilitation Survey. At a time when delivering economic growth is more important than ever for the UK, the survey provides considered insight into the critical subject of how companies can ensure that their employees are healthy, productive and in work. It is heartening to see in this latest survey how many companies are reaping the benefits of a focus on absence reduction by achieving stretch sickness absence targets of below 2. However, the survey does confirm that long-term absence due to mental health problems is rising a trend that we at Westfield Health have also identified as a result of our work with employers throughout the UK. Against the backdrop of continued economic uncertainty, consumer money worries and related stresses have driven a real increase in calls to our counselling line over the past year. We have also seen a rise in enquiries from new companies seeking confidential counselling and advice services for their staff. Effective workplace adjustments can be critical in keeping key staff in post, or getting them back into work. The survey found that stress was cited as the hardest cause of long-term absence for which to make workplace adjustments, ahead of MSDs and surgery or medical investigations. Although the survey has tracked a gradual downward trend in the number of barriers to rehabilitation, almost three in ten companies continue to cite the lack of NHS capacity as a problem. There is now clear evidence that some waiting times are rising and that GPs are exercising referral management for minor and non-urgent surgery. Over the past year Westfield Health has experienced significant growth in sales of company-funded health insurance, which supports the report s finding that more companies (29) have funded employee medical treatment. These employers benefit not only from getting key staff back into work more quickly but also from being perceived as a caring employer by staff who place increasing value on health insurance products that bridge some of the gaps in NHS service provision. The task of cutting absence is a complex one that demands combined action by government, the health profession and employers, and Westfield Health is confident that EEF members, having achieved so much in recent years, will be able to rise to the challenge and unite as an industry to tackle the issue. The report rightly highlights the importance of working closely with GPs to achieve successful adjustments. EEF members can also receive help through the EEF Cash Plan. Not only can employees access confidential telephone counselling, face-to-face counselling and Cognitive Behavioural Therapy (CBT) but line managers can also seek advice on handling stressed staff as well as guidance on planning workplace adjustments. Where line managers have concerns about a particular at risk individual, they are increasingly using the manager referral process to signpost reluctant employees to counselling, whilst maintaining the individual s confidentiality.

8 Sickness Absence and Rehabilitation Survey May Introduction Effective management of sickness absence continues to be a key issue impacting business. The economic climate is presenting tough challenges as employers adapt to difficult economic conditions. Sickness absence and presenteeism are costly and unproductive. EEF will, as we always have, discuss our findings with government and other key stakeholders. We rely on the responses of our members so that the survey results can be used to help target and effectively manage both sickness absence and presenteeism and also to identify how to boost attendance and enhance employee health. For the first time our survey this year reports on presenteeism, which we define as lost productivity that occurs when employees are not appropriately trained, are unmotivated or are at work when ill (either short-term illness or longer-term chronic ill-health conditions). With current skills shortages in certain parts of the manufacturing sector, it is imperative that employers are able to draw on a fit and able workforce. Our ninth annual sickness absence survey received responses from 429 member companies (a 17 response rate) that together employ a total of over 9, employees from a broad range of sub-sectors, geographical regions and company sizes 3. The respondents give a balanced representation of the total EEF membership. Nearly four-fifths of respondents (79) were small or medium sized companies (1 25 employees); this is a survey response pattern we manage to achieve year on year. The results, together with the data we have built up over the last nine years, provide an authoritative source of long-term data on a number of sickness absence trends and meaningful insights into how absence is managed. This year we included some additional questions about whether employees left work due to ill health, the most difficult type of absence for which to make adjustments, whether there are companies who do not pay SSP, return-to-work interviews, the cost of absence and presenteeism. We also made minor modifications to previous fit note questions. As well as sickness absence, this survey has taken a preliminary snapshot at presenteeism, as it is often misunderstood but is increasingly recognised as a contributor to lost productivity and potential health costs for employers. 3 The EEF definition of company size in this survey is included in Appendix 3.

9 7 Absence rates and trends In previous years we have commented on declining levels of sickness absence, which fell from 6.8 days per employee in 27 to five days in 21 a decline of a quarter. This year our survey indicates that the previous falls in absence rates may have now more or less plateaued, suggesting that further falls will be harder to achieve going forward without further incentives to achieve change. For example, the overall average absence rate for all employees remained unchanged from 21 at saw a small increase in the average absence rate of manual workers to 2.9 (from 2.7) and a small decrease in the average absence rate of non-manual workers to 1.4 (from 1.5). The overall average number of days lost for all employees has shown a small increase from 5. to 5.1 days. This compares favourably to 7.7 days (211) as reported by the most recent CIPD data 4 and 6.5 days (211) from CBI data 5 which include manufacturing but also cover many more employment sectors. Chart 1 illustrates the contrasting trends between manual workers who averaged 6.7 days sickness absence (6.2 days in 21) and non-manual workers who averaged 3.2 days sickness absence (3.5 days in 21). Chart 1 Overall sickness absence rates have plateaued Average number of days lost per employee by type of employee and year days Manual Non-Manual All employees Source: EEF Sickness Absence Surveys Manual workers continue to have double the absence rate of non-manual workers, at 6.7 days per employee compared to 3.2 for non-manual workers. In addition, it is worth noting that the slight increase in overall sickness absence is due solely to the increase in sickness absence in manual workers; non-manual workers continue to have a year-on-year decrease in absence. Nevertheless, manual workers absence rates continue to show a lasting improvement over the past five years, and still show a drop of almost a quarter (24) between 27 and 211. The results still suggest, however, that employers need to monitor absence rates in manual workers to avoid future rises and need to address the underlying causes as to why manual workers have longer periods of sickness absence. Although there has been stagnation in the longerterm trend in reducing absence, the overall trend continues to remain encouraging. Perhaps greater attention needs to be drawn to manual workers. As Chart 2 illustrates, there are significant variations in absence rates between companies, with four to six days per employee being the most common. Mirroring last year s data, 18 of companies achieved a rate of two days or less, therefore achieving a significant saving in absence costs. A total of 43 of companies achieved absence rates of four days or less. Chart 2 Almost half of all companies have an absence rate of less than four days of companies by their average number of days per employee lost due to sickness absence days days days days days 8 days + Source: EEF Sickness Absence Survey CIPD Annual survey report 211 Absence Management. 5 CBI, 'Healthy returns? Absence and workplace health survey' 211.

10 Sickness Absence and Rehabilitation Survey May Size matters The EEF sickness absence survey shows a continuing correlation between the size of the company and the absence rate. Chart 3 shows that the size of company has an impact on the average number of absence days per employee. Micro companies still have the lowest sickness absence rates and, conversely, the mid-sized companies (251 5 employees) have the highest rate. We have commented on this trend in previous reports and, although there is no single clear explanation for it, it does point to the fact that it is possible to achieve low rates of absence rates without the resources that are available to larger firms. This, and other evidence from our survey, suggests that further overall improvements could be achieved if more firms followed the steps taken by those with lower absence rates. Chart 3 Company size affects the absence rate Average number of days lost per employee by company size days Source: EEF Sickness Absence Survey 211 & 212 Zero sickness absence Chart 4 shows that over half of employees (51) took no sickness absence at all in 211. This has increased from 46 the previous year and is the biggest year-on-year increase in the last five years. This was largely driven by non-manual employees who have seen an increase in zero sickness absence from 5 (21) to 58 (211). The increasing number of employees with no absence suggests that the average duration of sickness absence is increasing, given that the overall sickness absence rate in 211 is slightly higher than in 21. This suggestion is supported by the observation by employers in Chart 7 that long-term sickness absence seems to be increasing. Chart 4 Over half of employees took no time off sick of employees with no absence by year and type of employee All employees Manual Non-manual Source: EEF Sickness Absence Surveys The no-absence figures have shown a change in this year s survey. Chart 5 illustrates the growing number of firms with high rates of zero absence throughout their workforce. In 211, nearly three-quarters of firms (72) had more than 4 of employees with zero absence, up from 58 in both 29 and 21. Chart 5 also shows that the proportion of companies with 4 of employees having no sickness absence has dropped dramatically, from 42 in last year s survey to 28 this year. However, this does not mean that more employees are taking time off for sickness, as the proportion of companies with 41 8 of employees taking no absence has increased by the same proportion. This increase is reflected in the overall proportion of employees in the survey taking no absence rising by 5.

11 9 Chart 5 Employers who had a low proportion of no absence has dropped dramatically in the 4 band of companies whose employees (in banded ) have taken no sickness absence by year Source: EEF Sickness Absence Surveys Interestingly, whilst absence rates vary considerably by size of company, the no sickness rate is remarkably consistent. It varies by less than 3 between companies of all sizes, except for those employing employees where there is a variation of almost 9 from the average rate. This is commensurate with the relatively higher absence rates in 211 for companies of this size. There are many possible explanations for the zero sickness trend, one being that employees are looking to retain their jobs in a difficult labour market. Recessionary effects may play a part, but the steady trend began before the downturn. Furthermore, data in the Black/Frost report suggest a similar national no-absence rate of 52. Sickness absence trends These findings paint an encouraging picture of continuing low rates of sickness absence and an increasing incidence of zero absence. However, they also point to an increasing divergence between employees who are taking zero or very little absence and those who are off sick for longer. This is mirrored by our analysis in the rest of this section which compares falling trends in short-term absence (up to seven days) and growing levels of long-term absence (more than four weeks). Short-term absence Chart 6 shows that one-third of companies reported seeing a decrease in short-term sickness absence levels a drop of 5 from last year. Just over three-quarters of companies reported no change or a decrease in short-term absence levels (a drop of 4 from last year). More companies reported decreases rather than increases in short-term absence trends (33 vs 18) this year, although the gap (15) is lower than last year s survey which showed a gap of 23 (38 vs15). This is consistent with our evidence that overall sickness absence rates have more or less plateaued. Chart 6 Short-term absence trend is down of companies reporting short-term absence trend, by year Increased Remained the same Decreased Source: EEF Sickness Absence Surveys 211 & 212 Long-term absence Chart 7 shows that just under two-fifths (37) of companies have seen an increase in long-term sickness absence levels over the past two years an increase of 5 from last year. Some 57 of companies reported no change or a decrease in long-term sickness absence over the past two years a drop of 6 from last year. More companies reported increases rather than decreases in long-term absence trends (37 vs 27) this year, and the gap (1) is higher than last year s survey which showed a gap of 3 (32 vs 29).

12 Sickness Absence and Rehabilitation Survey May Chart 7 Long-term absence trend is up of companies reporting long-term absence trend by year Increased Remained the same Decreased Source: EEF Sickness Absence Surveys 211 & 212 On the whole, employers seem to be managing short-term sickness absence well. Every year over the past five years more employers have reported a net decrease in the levels of short-term sickness absence. Conversely, employers have reported a net increase in levels of long-term sickness absence.

13 11 Causes of absence Given the diverging trends in short and long-term absence, we need to understand better what are driving them. We therefore asked respondents to identify up to three of the main causes of sickness absence as well as the one which is the single most common cause. Short-term sickness absence Short-term sickness absence is defined as an absence lasting one week or less and so not requiring a medical certificate. As Table 1 shows, minor illnesses account for the majority of short-term sickness absences, yet there are some interesting differences in some categories. Some of the rises reflect factors that are more associated with longer-term absence for example, stress, depression and mental illness is up by 3 from last year and flare-up of chronic condition is up by 6. Interestingly, home and family responsibilities showed an increase of 5, possibly reflecting the growing influence of government family-friendly policies or a growing confidence in taking absence for these issues. There has also been a continuation of the trend to fewer employees taking absence because of personal problems, down by 6 in the last year and 1 over the last five years. Is this because employees are aware that they should not be using personal problems as a reason for taking short-term sickness or because there are other HR policies for dealing with emergencies, unpaid leave or compassionate leave? Table 1: Main causes of short-term absence by year of companies reporting cause* Minor illness Back pain & other musculoskeletal disorders Home/family responsibilities Stress, depression or other mental illness Flare-up of a chronic condition Non-work-related accidents & injuries Personal problems Work-related accidents, injuries and ill-health Other Drink/drug problems Source: EEF Sickness Absence Surveys * The column totals are greater than 1 because each company reported their top three causes of short-term sickness absence. Our data also showed that companies reported back pain as being more prevalent in employees in the 5+ age bracket (41 of companies) than in the under 3s (25 of companies). The difference in the prevalence of other MSDs in older and younger workers is even more stark, with no companies reporting this problem in employees under 3 compared with 26 of companies who say this a problem in the over 5s. This may well be a growing issue, given the ageing of our workforce and the abolition of the default retirement age. Conversely, the prevalence of stress, personal problems and accidents was recorded as being highest for those under 3 years of age. This has been a consistent finding in our surveys. Long-term sickness absence Reports of the causes of long-term (more than four weeks) absence show some consistency over time. For example, heart problems, cancer and MSDs remain fairly constant. However, other causes appear to be changing.

14 Sickness Absence and Rehabilitation Survey May The most frequently recorded cause of long-term sickness absence is still associated with surgery or medical investigations/tests. The most significant increase since last year is associated with stress (from 16 to 23) and other mental ill-health conditions, which has increased from 2 to 29. It is likely that recessionary and job security pressures are relevant factors. As Table 2 illustrates the previous downward trend for both stress and other mental ill-health as being one of the main three causes of sickness absence has reversed. Table 2 Main causes of long-term absence by year of companies reporting cause* Surgery or medical investigations/tests Other mental health problems Back problems Cancer Other musculoskeletal disorders Stress Heart problems Non-work-related accidents and injuries Work-related accidents injuries and ill-health Other Source: EEF Sickness Absence Surveys * The column totals are greater than 1 because each company reported their top three causes of long-term sickness absence. Table 3 shows that surgery or medical investigations/ tests is the single most common cause identified (33), followed by MSDs (2) and stress/other mental ill health (16). These percentages for the single most common cause have remained largely unchanged over a five-year period, which suggests that they are still the most prevalent causes of long-term absence, and the most difficult to manage. Table 3 Companies most common cause of long-term sickness absence of companies recording cause Surgery or medical investigations/tests Back and other musculoskeletal disorders Stress and other mental ill-health problems Cancer Non-work-related accidents and injuries Other Heart problems Work-related accidents and injuries Source: EEF Sickness Absence Surveys More therefore needs to be done to help get productive employees back to work after surgery or medical investigations. This is an area where government and the NHS can be more effective in cutting down waiting times for appointments and surgery and aiding rehabilitation to get people back to work. We also asked about the main reasons for surgery and medical intervention absence. As Chart 8 illustrates, there is variation by company size, but it is understandable that smaller companies will report fewer problems with waiting for appointments and treatments, just because they have fewer of these events. However, it is clear that all companies struggle with the return to work after treatments and more than 9 of companies of all sizes identified recovery from treatments and operations as a problem.

15 13 Chart 8 Marked variations by company size of companies giving reason for absence due to surgery or medical intervention by company size Waiting for appointment or diagnosis of illness Waiting for treatments or operations Source: EEF Sickness Absence Survey 212 Recovery from treatments or operations Most difficult to make workplace adjustments for Companies were asked which of the main causes of long-term sickness absence are the most difficult to make adjustments for. Whilst the main causes of long-term sickness absence are ranked in the order of surgery/medical interventions, MSDs then stress, our analysis of workplace adjustments suggests a somewhat different order in terms of difficulty making them. Top of the list is stress (27), followed by MSDs (23), then surgery/medical interventions (19). This fits in with what is observed in clinical practice by OH professionals that stress cases are much harder to rehabilitate than someone with post-operative needs. We need to have more support from government with regard to the rehabilitation of individuals with mental health problems. For those two-fifths of companies who reported that ill health was a significant factor in some of their employees departures, 94 indicated that it accounted for between 1 2 of the total number of employees who left. The survey results seem to indicate that employees leaving on ill-health grounds are a bigger problem for micro companies. However, the proportion of employees leaving through ill health will, in fact, be affected by the overall numbers of people employed and the number of employees leaving the company for any given reason. This highlights that the survey does not tell us the actual number (only broad bandings) of employees who left the company where ill health was a significant factor. Large companies employ more people and will inevitably see more cases of ill health; they will also see more people leaving so it is unsurprising that no companies in this size bracket saw more than 2 of their workforce leave their employment due to ill health. Conversely, small companies have fewer employees, will see fewer cases of ill health and have a lower labour turnover. One person leaving a micro company due to health reasons might equate to all the leavers that year. The percentage ranges used in the survey do not allow us to forecast with accuracy the degree to which employees leave on ill-health grounds. These will be determined with greater accuracy in future EEF surveys. Employees leaving work due to ill health Unfortunately, in some cases, the factors causing employees to be absent from employment on a long-term basis cause them to leave work due to their ill health. At the request of the DWP we examined whether or not this is a significant factor in employees leaving a company. Three-fifths of the companies reported that none of the employees who had left in the past year had done so due to ill health. Just 8 of large companies said this, compared with 87 of micro companies.

16 Sickness Absence and Rehabilitation Survey May Management of sickness absence It has become clear over many surveys that effective absence management has a number of consistent core elements. These include setting absence rate targets, training line managers and the provision of occupational health. Our survey identifies the actions that companies are taking to manage sickness absence and helps us to understand which are most successful in practice. Absence targets Since 27, the proportion of companies indicating that they have set a specific absence target has remained stable at around 55. However, Chart 9 shows that there is considerable variation in the range of targets set, and this has changed over time. In the last five years we have tracked a decrease in those setting targets of 4+, from 8 in 27 to 4 in 211. Matching this has been a continuing increase in absence targets of less than 4+ (46 in 27 to 51 in 211). Indeed, our survey shows that 13 of companies have made considerable progress by setting absence targets lower than 2. Chart 9 More companies setting lower absence targets of companies and their set absence target by year Source: EEF Sickness Absence Surveys Absence targets met? As Chart 1 shows, despite the targets becoming more challenging, success in achieving them has increased significantly, from less than half (46) in 27 to more than two-thirds (69) in both 21 and 211. Employers have made considerable progress in this area. Chart 1 More companies achieving absence targets of companies achieving absence target by year Did not achieve target Achieved target Source: EEF Sickness Absence Surveys Chart 11 shows the percentage of companies achieving absence levels against the targets they had set themselves. Even among firms with targets of less than 2 we see success rates of close to 7. Given this, we were disappointed to see that the proportion of companies setting absence targets has remained unchanged. More firms need to emulate the success of those who are setting absence targets. Chart 11 Almost 7 of companies achieved their absence targets of companies achieving their absence target by absence target set Did not achieved absence target Achieved absence target Source: EEF Sickness Absence Survey 212

17 15 Forms of absence measurement Between 27 and 211 the number of companies using three absence measures has increased from 1 to 17. Conversely, the number using just one measure has decreased from 59 to 53. This is encouraging given that using more than one measure enables companies to carry out a more sophisticated analysis of their sickness absence profile. The most popular absence measure used by companies is the total number of working days per employee (64), followed by occasions or spells of absence (53), then the Bradford factor (a calculation based on a combination of the number of instances of absence taken by an individual over a given period and the average number of days per spell of absence) (29), and finally absence rates (2). Sickness absence manager training We asked whether line managers had been trained in absence management for both long- and short-term absences. This is important as Charts 12 and 13 indicate that companies are more likely to decrease short and long-term sickness absence if they train their managers. Chart 12 Training reduces short-term absence of companies reporting short-term absence trend by manager training Trained managers Have not trained Absence increased Absence remained the same Absence decreased Source: EEF Sickness Absence Survey 212 As Chart 13 illustrates, a slightly more significant change is observed for long-term sickness absence. Chart 13 Training reduces long-term absence of companies reporting long-term absence trend by manager training Trained managers Have not trained Absence increased Absence remained the same Absence decreased Source: EEF Sickness Absence Survey 212 Chart 14 shows that just under half of companies train their managers to manage short-term absence and 43 do so for long-term absence. These trends have barely changed in the past four years. As Chart 14 shows, the proportion of companies who have carried out training has increased slowly since 27 but has effectively plateaued in 211 for training on both short-term and long-term absence. Chart 14 About half of companies train managers of companies training managers in absence management by year Short term Long term Source: EEF Sickness Absence Surveys

18 Sickness Absence and Rehabilitation Survey May Return-to-work interviews From our data we found that 89 of companies have managers who conduct return-to-work interviews. In addition, 7 of companies reported that 81 1 of their employees receive a return-to-work interview with a manager. The feedback we receive from companies is that these interviews are effective in reducing the amount of time employees are absent from work and in lowering short-term absence rates generally. Occupational health provision Our survey shows that between 26 and 211 the proportion of businesses indicating that they have OH provision has risen year on year from 65 to 75. OH provision has increased across all sizes of company apart from the very largest (where this was at 1 already). Chart 15 shows an increase in the use of external OH services. Just under six in ten (59) companies reported that they use external OH services, compared with just under half (49) in 26. In addition, a further 9 of companies provide both internal and external OH services and 6 just an internal OH service. However, a quarter of all businesses do not provide an OH service at all, and these are almost exclusively firms with less than 1 employees. Almost all firms with more than 1 employees provide an OH service of some description. Using a specialist OH consultancy remains the most popular method of providing an external OH service, and this is increasingly common (78 of companies). If the government response to the Black/Frost report supports the introduction of the Independent Assessment Service, this would help to make inroads to partly cover the target group of SMEs as well as the 25 of companies who currently have no OH provision. The need for OH support amongst SMEs has already been proven with the government s OH advice line, the pilot for which has been extended until March Sinclair et al (212), Occupational Health Advice Lines evaluation: Final report. DWP Research Report 793. Chart 15 External OH services increasing in popularity of companies offering types of OH provision by year Internal OH External OH Both Internal & External OH Source: EEF Sickness Absence Surveys No OH Among those companies that use external OH services, the use of local GPs has continued to drop. Only 4 of companies now use GPs compared to 14 in 27; similarly, the use of NHS OH units has dropped to 8, from 11 in 27. Conversely, specialist OH consultancy usage has increased from 66 to 78 in the same time frame. Employer-paid treatment Altogether, just over two-fifths of companies (42) make use of private medical treatment, either through private medical insurance or the direct financing of private treatment. The rise in employers paying for private treatment (29 up from 26 last year) would suggest that companies may be responding financially to longer NHS waiting lists for treatment and believe that it is cost-effective to pay for private intervention in order to speed up returns to work. We suspect that this will prove to be a rising trend, especially if one of the recommendations from the Black/Frost report comes to fruition that where tax relief is provided for company rehabilitation expenditure, such as physiotherapy. Occupational sick pay We asked whether or not businesses pay SSP, OSP, both or neither, and the results are shown in Chart 16. This question was influenced by one of the findings of the Black/Frost report which found that a disproportionate number of individuals working for SMEs receive Employment and Support Allowance (ESA) without first receiving sick pay.

19 17 The Black/Frost findings implied that SMEs were not paying sick pay. Our research found that there was only one company in the entire survey which had sick leave that would trigger SSP payments. Our research also shows that: Most, if not all, employees receive sick pay after three days absence from work. This appears contrary to the finding in the Black/Frost report which suggested that many individuals from SMEs receiving ESA did not receive sick pay first. Two-thirds of companies pay a combination of Statutory Sick Pay (SSP) and Occupational Sick Pay (OSP), with 29 paying only SSP and 4 just OSP. Large companies are more likely to pay both SSP and OSP and smaller companies are more likely to pay only SSP. Half (51) of micro companies pay only SSP as their sick pay option. Some 41 of micro companies pay both SSP and OSP. Almost all (95) of large companies (51+ employees) pay both SSP and OSP, with 5 only paying SSP. Chart of survey companies pay sick pay of companies paying different kinds of sick pay by company size Statutory Sick Pay Occupational Sick Pay Both Neither Our survey also suggests that restricting sick pay to the statutory minimum is not an effective tool for discouraging sickness absence. It shows that sickness absence was 4.7 days per employee when only SSP was paid compared with 4.8 days when both SSP and OSP were paid. Cost of sickness absence This year we asked respondents to quantify the total direct costs of absence per absent employee in 211. This included salary costs and replacement costs of absent individuals, for example through the use of temporary staff or through overtime working by other employees. Our survey showed that less than a quarter of the respondents (22) measure the economic cost of sickness absence, compared with 66 who do not. Chart 17 shows that there appears to be direct correlation between company size and by implication the resources available within firms to carry out such analyses. We asked companies to estimate the direct cost of sickness absence to their organisation and what factors were included in this calculation. What was clear is that companies calculate the total direct cost of sickness absence in many ways. There was no standard methodology, with 15 permutations of the direct costs elements we asked about. The average annual cost of absence per employee can vary considerably across organisations, partly because they include different costs in their calculations. Of those that calculated the direct cost, nearly four-fifths included the salary of the absent individual, but only a fifth included the cost of any lost production. Less than half of the companies included any sick pay costs, and three in ten included the knock-on costs of overtime for other employees or replacement temporary workers. Neither can the indirect costs of sickness absence, such as reduced performance and productivity or even missed business opportunities, be forgotten. The cost impact of sickness absence on an organisation as a whole often goes beyond purely the salary of the absent individual. Source: EEF Sickness Absence Survey 212

20 Sickness Absence and Rehabilitation Survey May Chart 17 Less than a quarter of companies measure the cost of sickness absence of companies measuring the economic cost of sickness absence by company size Yes No Source: EEF Sickness Absence Survey 212

21 19 Rehabilitation As well as efforts to manage absence, efforts to rehabilitate staff will often help them to return to work and to working effectively more quickly. There was a subtle change in the way the rehabilitation question was asked this year. Employers were not asked which elements formed part of their rehabilitation arrangements, but were asked which elements had actively been used as part of their rehabilitation arrangements. As Table 4 below shows, companies utilise a wide range of actions and adjustments. This perhaps reflects the specific needs of different conditions and individual employees. The great majority of companies have altered working hours, maintained contact with absent employees, allowed time off for necessary medical appointments and changed or modified tasks. Rehabilitation arrangements remain broadly similar, although the percentages have increased across most elements. Table 4 Rehabilitation arrangements actively used by individual employees returning from long-term absence of companies actively using arrangement Altering hours for phased return Maintaining contact Time off for appointments Changing/modifying tasks Medical exam/review medical records Return-to-work plan Changing work location Visits to workplace Special equipment Provide retraining Early intervention None of these Other Source: EEF Sickness Absence Surveys The top five rehabilitation arrangements have been consistently the same since 27. Over the past five years the return-to-work plan has been increasingly utilised as a rehabilitation tool. In terms of rehabilitation effectiveness and return to work, altering hours for a phased return and changing or modifying tasks for the employee were ranked highest. In fact, 68 of employers said that altering hours was the most effective rehabilitation measure. It is also the easiest to implement. The same finding was also highlighted in a recent government DWP report. 7 As Table 5 below shows, there is a great deal of consistency in the results over the last five years. It is still encouraging to note that the five measures identified as the most effective are also the top five that are used in practice, with the exception this year that return-to-work plans were deemed to be slightly more effective than medical examinations or reviews of medical records. Table 5 Most effective rehabilitation arrangements of companies using arrangements Altering hours for phased return Changing/modifying tasks Maintaining contact Time off for appointments Return to work plan Medical exam/review medical records Changing work location Early intervention Visits to workplace Special equipment Other Provide retraining Source: EEF Sickness Absence Surveys Barriers to rehabilitation Our survey revealed some progressive news about the barriers to rehabilitation, with Table 6 revealing a continual gradual decline in most barriers to rehabilitation in most areas. In addition, the 7 Lalani et al (April 212), 'An evaluation of the Statement of Fitness for Work: qualitative research with employers and employees', DWP Research Report 797.