Back to Scuoler – Reduce sickness absence to spur growth

Having employees off work, especially for long periods, is damaging to productivity and the economy, says Terry Scuoler. Picture taken at Macro Cable Management, North Wales

Terry Scuoler, CEO of EEF urges government not to miss the detail as it struggles with macro economic recovery and highlights the role of reducing sickness absence in facilitating growth.

Terry Scuoler, EEF chief executive

“With ongoing problems in the eurozone we naturally hear a lot of talk about the impact of demand from abroad on how fast we can grow our economy and our manufacturing sector.

But at the same time I am also picking up increasing concern about the capacity of our companies to keep up with growing demand.

This is not surprising given the damage that a severe recession inflicted on many manufacturers. Addressing this is not easy and much of the attention being given to the problem focuses on helping companies overcome the barriers they face in investing in new capacity and attracting and retaining skilled workers.

However, there is another area that gets less attention but which is also vitally important – ensuring that our workforce is fit and healthy, that people are in work and their skills are being fully utilised.

For this reason, the issue of sickness absence is one that government, employers and other stakeholders have put considerable effort into tackling over the last decade. Having employees off work, especially for long periods, does not only mean lost productivity for a company. It is also a large cost to the economy. All the evidence suggests the longer people are off work, the more likely they are to drop out of the workforce altogether with all the costs to individuals and society this brings.

The good news is that companies themselves have become far better at stretching absence targets, putting together strategies to manage absence and training managers as well as providing early assistance to help employees back to work.

This has produced significant gains in tackling short term absence. Our latest research has shown a continued year on year decline in short term absence over the last five years, with one third of companies seeing a decrease in 2011. In addition, the number of employees having no sickness absence has again increased to just over half in 2011, up from 46% in 2010.

However, despite these efforts the overall sickness absence rate has now flattened off and remained unchanged from 2010 (2.2%), whilst the average working days lost to absence has shown a marginal increase from 5 days per employee to 5.1 days. Of greater concern is the divergence between short and long term absence where almost 40% of companies saw an increase in 2011, an increase of 5% on 2010 alone.

This was mainly down to a jump in absence due to stress, anxiety and depression which often result in longer periods off work. It feels as though the efforts to date have now been exhausted and that government needs to reinvigorate its policies in this area.

In particular, it needs to do more to make a success of a relatively new initiative – the fit note. This replaced the old sick note and looks at what people can do at work, rather than what they can’t. Fewer manufacturers now see GPs as a barrier to getting staff back to work but too few of them say that the fit note is producing real benefits.

We need to see more GPs trained in how to issue fit notes appropriately if we are to see a genuine culture change. So far only 3,500 out of a UK total of 40,000 doctors have received this training.

The government must also push ahead with plans to introduce an electronic fit note to give GPs drop down menu options to replace the often rather vague advice they currently provide. At the same time companies should get involved and make the fit note work for them as all the evidence shows the more companies put into the fit note, the more they get out of it.

The Government also needs to implement the recommendations of the Frost/Black review of work and wellbeing and recognise the benefits that the considerable business investment in rehabilitation brings to our economy.

This should be given tax relief rather than being treated as a taxable benefit. As well as helping to get people back work quicker, such investment by companies would also take pressure of NHS capacity which is still seen as a barrier by almost one third of companies.

The gains made to date have been considerable but a fresh approach from government, companies and other bodies is now needed. While the turmoil in financial markets inevitably attracts the headlines, the government must not lose sight of the smaller but important practical steps it can take to support our economy.”