The majority of UK businesses are increasingly anxious about the impact of sickness absence on their operations, with new research showing that long-term sick leave now costs employers more than £20,000 per employee each year.

According to a new white paper from MetLife UK and former Small Business Commissioner Liz Barclay, 88% of business owners and senior decision makers are concerned about long-term sickness – defined as absences lasting more than four weeks – while 86% are worried about short-term sickness.

The report, Early Intervention: reduce absence, increase productivity, keep Britain working, reveals that long-term absence costs companies an average of £20,735 per employee per year. Short-term sickness, meanwhile, carries an average cost of £13,800 per employee. These figures include the direct impact of absence, support services, temporary staff and the additional workload taken on by remaining employees.

Alarmingly, one in seven businesses (15%) admit they do not estimate how much they spend on either short- or long-term sickness, suggesting many could be underestimating the financial burden of absenteeism.

GROWING COSTS AND SHRINKING WORKFORCE

The report comes amid mounting concerns about workforce participation. The government’s Keep Britain Working review found that the number of working-age people inactive due to ill health has risen by 40% since 2019, reaching around three million people.

The economic cost of that figure is estimated at £150 billion a year, with forecasts suggesting a further 600,000 people could be out of work for health reasons by 2030.

Charlotte O’Brien, head of employee benefits at MetLife UK, said: “While the absolute priority is ensuring employees feel supported during moments of absence, whether short or long-term, without careful management this could prolong time away from work and could trigger more serious issues, higher costs, and greater business disruption.

“Sir Charlie Mayfield’s government review aims to cut the numbers of long-term sickness which calls for a lot more to be done through the workplace – which is where the benefits of preventative and early intervention tools are so important.

“Quick and targeted action enables employers to minimise time off, reduce the risk of long-term ill health, and ensure employees feel properly supported and cared for.”

A CALL FOR EARLY INTERVENTION

The white paper argues that early intervention schemes, such as group income protection (GIP), could help reduce both absenteeism and business disruption. These programmes offer practical and financial support to help employees recover and return to work sooner, while giving employers a structured framework for managing health-related absences.

Liz Barclay, small business and consumer champion, who co-authored the report, said: “I’ve spent decades working with businesses of all sizes. Sickness absence is surging, and as a small business owner, I know the impact it can have on productivity and profitability, as well as on the relationship with customers.

“For me, the most important people at the heart of the detriment are skilled, experienced and hugely valuable employees – people with mortgages, rent and bills to pay – who are becoming unwell and being unnecessarily lost from the workplace, when their preference would be better health and remaining in work earning their salary.

“Founders, owners and bosses owe it to their business and their employees to support them, as quickly as possible, back into the saddle.

“I am not simply replaying the problem statement we already know exists. It’s both the wake-up call and a rallying cry to UK businesses. The purpose of this white paper is to bring to the forefront a possible solution to help safeguard both workforce wellbeing and the bottom line.”

The research identifies long-term sickness, business performance and employee retention as some of the biggest challenges facing employers over the next year.

“MetLife and Barclay argue that early and preventative measures will be key to tackling these issues and keeping the UK’s workforce – and its productivity – on track.