New research from Barnett Waddingham indicates that a growing prevalence of long-term sickness among employees is impacting productivity across UK businesses.
The findings reveal that over three-quarters (78%) of businesses have experienced higher absenteeism due to long-term illness, with a third (34%) reporting a direct decline in productivity as a result. This trend, coupled with the challenges of an ageing workforce, is contributing to increased costs and risks, particularly in terms of healthcare benefit expenses and employee wellbeing.
Impact of Long-Term Sickness
The Barnett Waddingham study, which surveyed 301 HR Directors and C-suite business leaders, highlights the broad effects of long-term illness on businesses across the UK. While absenteeism from long-term health issues spans all age groups, those aged 55-68 are most frequently affected, contributing to an increased workload for remaining staff (40%), reduced morale (35%), and heightened people-related risks (31%).
Concerns about the implications of long-term sickness and an ageing workforce are widely shared, with 74% of respondents observing a noticeable decline in overall workforce wellbeing. Additionally, 66% of organisations report rising healthcare benefit costs as a result, reflecting the ongoing financial impact on businesses managing ageing and health-related workforce issues.
Rising People-Related Risks Due to Ageing Workforces
With an ageing workforce and evolving job demands, many businesses have been forced to adapt. More than a quarter (28%) of companies report they have hired to address emerging skills gaps, while 22% have altered their recruitment processes, and 18% have increased training efforts. A further 57% of businesses acknowledge concerns over potential age discrimination, highlighting the complex challenges of balancing the needs of an older workforce with inclusivity and productivity goals.
Technological adaptability is another area of concern, with 74% of respondents indicating that older employees face difficulties in learning new processes and technologies. These challenges suggest a pressing need for businesses to find ways to support older employees’ engagement and skill development, especially as technology continues to transform workplace practices.
Business Strategies for Mitigating Long-Term Health Risks
Despite these difficulties, nearly three-quarters of businesses feel prepared to handle the impacts of long-term sickness (70%) and ageing employees (73%). Companies are taking proactive measures to manage these concerns, with a third (33%) focusing on developing tailored wellness plans for specific age groups, while 34% aim to increase access to physical health resources. Meanwhile, 35% are investing in remote healthcare technologies, indicating a trend towards digital solutions to support employee health and reduce absenteeism.
Flexible working arrangements are another consideration, with 31% of business leaders identifying them as helpful in managing long-term sickness and an ageing workforce. A further 26% see improved healthcare benefits as essential to supporting their employees, and 22% express a desire for more government action to alleviate healthcare burdens, specifically through NHS reform and reduced waiting times.
Data-Driven Strategies to Address Workforce Health
Julia Turney, Partner and Head of Platform and Benefits at Barnett Waddingham, stresses the importance of a data-driven approach to manage these workforce challenges. “We’ve seen the headlines on long-term sickness and ageing workforces, and we now have the proof. Businesses are facing a critical risk to their organisation’s future if they don’t recognise and address these problems,” Turney stated.
She emphasised that a detailed understanding of workforce demographics and healthcare usage is critical to devising effective strategies. “What is the breakdown of age groups across the business? How many people are utilising healthcare benefits? How much is that costing us? These are all important questions that can be answered,” she said, underscoring the need for data collection and analysis to mitigate risks and support employee health.
Broader Implications for UK Labour Market and Policy
Turney also notes that these workforce issues are part of a larger, industry-wide challenge. With over 9 million people classified as economically inactive, many due to long-term illness, the rising cost of living and recent policy measures could extend the working years of many individuals. While government initiatives, such as increased NHS funding and the “Get Britain Working” whitepaper, aim to address these concerns, Turney points out that the effectiveness of these measures will depend on their practical execution.
As UK businesses confront rising absenteeism, productivity pressures, and an ageing workforce, the future of work will likely require a balanced approach that incorporates healthcare support, flexible work arrangements, and a more adaptable recruitment and training strategy.
