Managing Sickness Absence in SMEs

The Authority is working with Innovate UK (an executive non-departmental body sponsored by BIS) to seek innovative proposals for interventions aimed at better supporting small and medium enterprises (SMEs) to manage long term sickness absences and support early returns to work. 'How do we support SMEs to manage the first four weeks of sickness absence in a way that best facilitates a return to work?' The key driver for the competition is to investigate what innovations could better answer the challenge of supporting SMEs to manage the early stages of sickness absence; doing so will help improve the government's evidence base regarding effective work and health interventions.

The Work and Health Unit (WHU) is the Authority's business lead for this competition. WHU is a joint initiative of the Department of Work and Pensions (DWP), the Department of Health (DH) and other relevant departments and bodies.

It aims to improve productivity and labour market participation. Long spells of sickness absence can be life-changing for individuals, whilst sickness absence poses significant costs to businesses and government. - 130 million days are lost due to sickness absence a year - Cost to businesses is an estimated GBP9bn in sick pay and associated costs - 4 consecutive weeks of sickness absence presents an increased risk of leaving the labour market. - 1 in 5 people who reach 6 weeks of sick pay eventually leave work.

Addressing sickness absence therefore does not just offer economic benefits for businesses, individuals and the state, but improves businesses' productivity, and individuals' wellbeing. By focusing on the first four weeks of sickness absences (i.e. before the threshold for increased risk of long-term worklessness) it is expected that outcomes for employees and employers would be improved.

The usual definition of small and medium sized enterprises (SMEs) is any business with fewer than 250 employees. Absences are felt more acutely by SMEs than by larger organisations, since the smaller the workforce, the greater the impact an absentee has; furthermore, SMEs are far less likely to have access to occupational health support (just 1 in 10 SMEs compared to 8 in 10 large employers). These issues are particularly acute for micro enterprises i.e. those with fewer than 10 employees.