Running a small- or medium-sized business has never been easy. Owners and senior managers face a range of challenges, from staying competitive to dealing with rising costs and keeping up with new regulation.
Recently, SMEs have been affected by a new and seemingly intractable problem. Long-term sickness and the poor health of the workforce is having a detrimental impact on the ability of UK businesses to fulfil orders or to maintain acceptable levels of customer service. Managing skills shortages is nothing new, but the degree to which business is being held back by the poor health of the workforce is a major challenge.
The number of working days lost to sickness hit a record high in 2022, according to the ONS, and is forecast to have got even worse in 2023, which is expected to be confirmed when annual data is published in April. This marks a worrying reversal in the long-term trend; sickness rates have been in decline since the 1990s, reflecting the changing nature of work, and had been relatively flat in the years leading up to the pandemic.
Cost of long-term sick leave set to double
Now the trend is moving in the opposite direction. The cost of long-term sick leave in the UK is set to almost double by 2030, costing the economy £66.3bn per year in lost productivity, according to a study by Zurich and the Centre for Economics and Business Research. The report also found that the number of workers with long-term health conditions has increased by 27% in the last six years. These workers took a total of 112.5m sick days in 2023 at a cost of £32.7bn to the UK economy.
This is not just about the impact of an ageing workforce, although this is clearly a factor. Another recent report, by the think tank Resolution Foundation, found that people in their early 20s are more likely to be not working due to ill health than those in their early 40s. This is radically different from what has happened in the past, when workers were more likely to be sick and need time off as they aged.
With more than six million now on NHS waiting lists, businesses must adopt a new approach to long-term sickness to address their manpower shortages.
Ian Talbot is CEO of Healix Health, a healthcare and risk management solution provider offering bespoke services to clients who want control over their health, travel and risk provision. “Years ago, we used to rely on the state to support us,” he says. “But these days, services are under so much pressure we can’t do this anymore. Many employers feel they have a responsibility to their employees and a duty of care to provide the tools they need to stay well and to be their best selves.”
Talbot says the trend towards employers making a bigger commitment towards supporting their employees’ health and wellbeing strengthened during and after the pandemic. He says it runs much deeper than a simple response to longer waiting lists. “I think that Covid reminded us of our own mortality and the fact that we are not as robust as we thought,” he says. “Conversations about our health at work became much easier and companies set up systems to stay in touch with colleagues to make sure they were okay or if they needed anything.”
In the aftermath of the pandemic, employees reflected on how vulnerable they and their families had been and were more open to the idea of having schemes at work that afforded additional protection, Talbot says. Self-funded private healthcare remains largely out of reach to most people, but schemes offered by employers are seeing greater traction. They have also become important assets when it comes to recruiting and retaining talent.
Changing corporate culture in aftermath of Covid-19
“Employees understand the value of schemes at work that will help them to access healthcare and support when they need it,” says Talbot. “After Covid, we are now looking at how we can make ourselves more resilient when we have setbacks. I think that this is why we have seen such a strong uptake in individual health apps is the past 18 months or so.”
In February, Healix launched Healix ConneX, an easy-to-use app which helps employees to gain quick access to private healthcare pathways such as virtual GP and mental health assessments, musculoskeletal triage and treatment, and cancer care. It is tailored to small- and medium-sized businesses whose size constrains their health options.
The ConneX app has been developed to reflect this need for flexibility. There are three options, based on budget and requirements: Lite, which includes virtual GP services and mental health assessments; Triage, which also provides musculoskeletal assessments, cancer care, wellbeing platform and discounted rates for fitness centres; and Care, which supports employees back to health and beyond with access to in-person physio and mental health consultations.
The app has been adopted by 95% of Healix’s existing clients. Talbot thinks that this is due to the fact that the app connects users with a healthcare professional, either virtually, through a messaging system or via a phone call.
Despite the popularity of virtual health apps, Talbot says that most people still want to speak to a health professional. “In the UK, culturally, we are so used to going to the family GP and from there being referred to a physiotherapist or a mental health counsellor, for example.”
For SMEs, decisions around adopting healthcare plans for employees are inevitably driven by cost. But they should also use the selection process as an opportunity to think about strengths and challenges across the organisation, says Talbot. “Rather than just going to the latest app or the latest opportunity that’s being sent to them on email. It’s about having the ability for them to take a temperature check.”
He adds: “A lot of the conversations we have are not just about the healthcare scheme, but about the wider business.”
Crafting the right healthcare solution
Healix works with professional advisors, employee benefit consultancies and businesses themselves to understand the nature of the company and the challenges it is trying to solve. This then helps companies to identify the most suitable healthcare solution.
SMEs should adopt a tailored approach to employee benefits, with different solutions and different tools available to address employees’ needs at different stages
Using ConneX, they can then tailor their benefits to make that solution a reality. This flexible approach allows companies to select the system that works for them, rather than buying an off-the-shelf benefit package. They might not take full advantage of all the benefits that system offers, it might have superfluous add-ons or it might not serve the company’s needs. A personalised approach ensures an organisation gets exactly what it needs from its private medical provider.
This process of discovery may identify a variety of health needs across an organisation, even within a relatively small business. This may be determined by the age of employees or the range of task they carry out at work, depending on whether they are based in an office or carrying out work that is physically demanding. These requirements are likely to change as employees age or the business evolves, so the optimum healthcare plan will be flexible and allow for adjustments.
“SMEs should adopt a tailored approach to employee benefits, with different solutions and different tools available to address employees’ needs at different stages,” says Talbot. “It’s not a once and done. If you find it is not working, or there are gaps, you should be able to adapt it.”
Data is key to addressing the cost challenge
Given the cost challenge, having solid, reliable data around the organisation’s care requirements is a real bonus when it comes to designing a tailor-made scheme. If this is not readily available, data collection should be adopted at the earliest opportunity to inform subsequent adjustments to a health plan to ensure that it can meet the needs of employees to help them stay well and in productive work.
Talbot says that SMEs increasingly look for partnerships with healthcare providers, eschewing the traditional buyer/supplier relationship. “This is reflected in our retention rates, which are very positive. We are very much deemed as a healthcare partner, as opposed to their healthcare supplier. We are providing much more than just an insurance solution.”
A healthcare solution that allows employees easy access to medical care will ensure the odd sick day doesn’t turn into a longer-term health issue. As a result, companies will craft a more robust, productive workforce and limit the time – and money – lost to ill health.
