Health and Work: Improving the resilience of the UK’s workforce

New research published today by WPI Economics analyses three policy actions to improve the UK’s approach to workforce health that, if implemented, could generate benefits of up to £1.3bn a year.

The health of an economy’s workforce is crucial for its long-term growth, yet the UK suffers from stubbornly high levels of health-related labour market inactivity. Commissioned by AXA Health, the report outlines three policy recommendations to tackle this challenge and improve the resilience of the UK workforce.

If current trends in sickness absence continue, in the next five years, the UK economy can expect to lose £66.3 billion annually in lost productivity due solely to long-term sick leave. There is an urgent need to put systems in place that allow workers to show up as the healthiest versions of themselves, which is achieved by tackling the underlying long-term sicknesses that are affecting productivity.

To reduce health-related inactivity, there must be a focus on improving not just physical but also mental health. Worklessness due to ill mental health is a growing concern amongst the younger generation, and people with physical health problems are twice as likely to experience poor mental health, while those with severe mental illnesses face life expectancies 15-20 years shorter than the average. Given the interdependent relationship between mental and physical health, supporting the workforce’s mental wellbeing is a necessary step in the process of improving overall health outcomes.

Employers, the Government, and health insurers all have a crucial role to play in improving the health of the UK workforce. The Government must begin to take action in close collaboration with businesses, employees and service providers such as insurers. Insurers can provide practical solutions to the issues that are causing more and more people to take time off work or even exit the labour market for health related reasons.

WPI Economics conducted policy analysis of over 30 interventions across regulation, financial services, local government, NHS integration, and training and qualifications. Policies were shortlisted based on their impact on the health and wellbeing of employees, the potential fiscal impact, business and economy impacts and overall broad support. Based on this decision-making criteria, WPI Economics identified three priority areas for action:

1. Greater Transparency on Workplace Health: Requiring large companies to disclose how they support employee health could drive cultural change and increase uptake of employer-provided healthcare solutions. A 25% increase in adoption of insurance-based solutions could yield economic benefits of £750 million annually.
2. Mental Health Training for Line Managers: Equipping line managers with the tools to support mental wellbeing in the workplace can help prevent mental health issues from escalating. Standardising training and offering grants to SMEs could generate annual benefits of up to £175 million through reduced sickness absence and improved productivity.
3. Improving Mental Health Support in Schools and Colleges: Mental ill health among children is rising and is having a significant impact on working parents. Greater investment in school-based support such as Senior Mental Health Leads and extending mandatory health education to post-16 learners could save employers’ costs from the knock-on effects on working age parents. Even a modest fall of 5% of these costs could save employers £400 million a year. This is a serious issue so getting to the root cause and ensuring early intervention is key.

The ‘Health and Work: Improving the resilience of the UK’s workforce‘ report details the full analysis of the policy recommendations.