Employers Face £6bn Annual Cost to Combat Worklessness Crisis

In a significant government review, employers have been informed that addressing the health-related worklessness crisis in Britain will necessitate an annual investment of £6 billion to support their workforce. This crucial report, released ahead of this month’s budget, underscores the vital role businesses must play in combating the increasing incidence of ill-health that is driving millions out of the labor market.

Charlie Mayfield, the former chair of John Lewis and the appointed leader of the government’s Keep Britain Working review, emphasized the urgent need for a substantial expansion in occupational health services. This initiative aims to prevent hundreds of thousands from exiting the workforce each year. “We need to fix this,” Mayfield stated in an interview with The Guardian. “What we are proposing is a fundamental reset in terms of how health is handled in the workplace. We’re saying we have to move from a situation where, for most people, health is for the individual and NHS – we have to move from that position to one where health becomes a true partnership between employers, employees, and the health services generally.”

This proposed transition is significant, marking a major shift in how health is perceived within the workplace. The alarming trend of rising health-related worklessness has captured the attention of ministers, particularly the notable increase in working-age adults, especially young individuals, who are leaving the workforce due to health issues. Currently, approximately one in five working-age adults—over 9 million people—are classified as “economically inactive,” meaning they are neither employed nor actively seeking employment. Among these, nearly 3 million cite long-term sickness as the primary reason, setting a record high.

In his well-anticipated report, Mayfield highlighted that this “quiet but urgent crisis” is costing the UK economy an estimated £85 billion annually, placing substantial financial strain on the exchequer, businesses, and individuals alike. The increasing burden of economic inactivity due to health issues is deemed “unsustainable” for the state, leading to lost output, heightened welfare expenditures, and added pressures on the NHS.

Rather than solely focusing on reducing costs associated with health-related welfare support, Mayfield advocates for a proactive strategy aimed at assisting individuals in maintaining their employment. He proposed a new framework for health within the workplace that distributes responsibility among employers, employees, and the government. This collaborative effort aims to significantly reduce sickness absence rates, enhance return-to-work statistics, and elevate the employment rate for people with disabilities.

The report suggests that if its recommendations are implemented across the workforce, there could be an economic benefit of up to £18 billion annually for both the economy and the exchequer. This potential for financial gain underscores the importance of investing in employee health as a means of fostering a more robust and productive workforce.

The government has announced that over 60 employers, including well-known brands such as British Airways, Nando’s, and Tesco, will adopt Mayfield’s recommendations as part of a pioneering program over the next three years. This initiative aims to demonstrate the value of prioritizing health in the workplace, showcasing how businesses can contribute to reversing the trend of worklessness.

As the UK grapples with the escalating crisis of worklessness linked to health issues, the call for a collective response from businesses, government, and individuals has never been more critical. The proposed £6 billion investment by employers is not merely a cost; it represents a strategic approach to building a healthier workforce, which can ultimately lead to greater economic stability and societal well-being. With a renewed focus on occupational health and shared responsibility, there is hope for a more productive future where individuals can thrive in their roles, contributing to the economy while maintaining their health.