How can insurers help employers cut sickness absence costs? A more integrated solution is needed, says Tim Ablett
The workplace is changing and the insurance market has to change in order to keep up. The cost of sickness absence for 2002 is estimated at £522 per employee and companies are frantically looking for ways to reduce costs. With an increasing focus on rehabilitation, insurers are in the prime position to provide support for employers eager to invest in the well-being of their staff and facilitate a swift return to work.
In a working world of extended retirement ages, capping of pension liabilities and the employers' liability crisis, insurers need to take a long, hard look at the traditional approach. We need only look at the causes of sickness absence to see that stress and musculo skeletal (RSI) complaints are the subject of an increasing number of claims against employers. Compensation awards related to stress are increasing annually by 10% against an RPI of 3%. This is just one of the new reasons for absence that is a cause for concern for employers and costs the industry £12bn each year.
In addition to the increasing and changing face of staff absence, the NHS is finding it hard to cope, putting extra pressure on employers. As a result, employers are increasingly aware of the business benefits of a preventative approach to employee wellbeing through the provision of an employee assistance programme (EAP). The insurance industry can be a hugely influential force in changing attitudes to employee wellbeing and facilitating effective return to work programmes.
EAPs provide a window of opportunity for organisations that want to take the initiative on staff wellbeing. They offer access to professional counselling and advisory services for employers and their staff. This, in turn, provides a particularly vital support structure for employers and staff alike, who suffer from work-related stress.
A total of 13.5 million sick days are being taken every year as a result of stress and 500,000 people are suffering from work-related stress or depression in the UK. As the UK's workforce struggles to deal with increased stress levels, insurers and employers should be pulling together to take responsibility for employee wellbeing.
Taking responsibility
The key is to recognise the cost of absence and litigation, in combin-ation with a new focus on bringing the value of employee risk in line with other risks. Organisations need to stop seeing health as an employee benefit and realise, that by reducing absence rates and the duration, they will be enhancing the business as a whole. Essentially, through effective employee risk management, companies will be able to take a proactive approach to the health and welfare of their staff and their business.
While EAPs are a definite step in the right direction, employers also need to look at complementing them with occupational health, rehab-ilitation and life solutions. In this way, they will be able to create an integrated healthcare solution that maintains a healthy and productive workforce. Traditional employee benefits such as occupational health and risk management can be combined with a more inclusive approach to healthcare in order to reduce sickness absence levels and improve productivity.
Integrated healthcare offers a range of interpretations, which are its Achilles' heel as well as its major advantage. With no clear definitions present, it is no wonder that insurers are reluctant to take the plunge into integrated healthcare. But the fact remains that this approach to employee risk management will enable the market to establish a holistic offering that copes with ever-changing demands, while giving providers a wealth of opportunity.
The rising cost of sickness absence only serves to highlight the need for the market to focus its attentions on absence management. With the development of more proactive intervention procedures, insurers will be able to help facilitate an employee's return to work. These can include stress counselling, formal return-to-work programmes, work equipment changes, use of home working, access to physiotherapy services or fast referral to private medical care.
Absence management needs to work side by side with occupational health and rehabilitation services in order to be fully effective. Employers are beginning to realise the secret to a healthy company is ensuring it is happy and profitable. This accounts for the increased focus on healthcare issues concerning their staff. Occupational health is concerned with the maintenance of a high level of physical, mental and social wellbeing of all workers, while reducing the costs incurred by staff absence. Likewise, rehabilitation is designed to speed up the recovery process and reduce costs by helping staff make a successful return to work.
Staff absence is an inevitable part of the work cycle, but there are a number of key measures that can be put in place to help bring employees back into the workplace. It is essential for organisations to have proactive HR policies in place. These can include employment, absence management, working practices and employee wellbeing procedures. Employers must also ensure they provide training for managers and educate staff to promote a sense of responsibility for the working environment and the welfare of themselves and the people around them.
Getting back to work
Rehabilitation is of paramount importance for helping staff return to work and includes a range of services that aim to aid recovery. A wide range of techniques can be used, including independent assessment through medical evaluation, setting up a framework to facilitate appropriate referral, assisting in the provision of specialist items such as limbs, home adaptations and providing a graded return-to-work programme.
Rehabilitation services may continue to be provided when the injured person has returned to work in order to achieve a full working role. Expert assistance can be arranged which covers a range of requirements, such as co-ordinating workplace adaptations, discussing job options to address suitability of proposed job options and a job analysis to assess the physical demands of a role. A comprehensive rehabilitation facility will also provide a job development programme or career counselling to progress opportunities for alternative employment.
By adopting a strong focus on rehabilitation, all parties can be involved in the return-to-work process and remain fully informed of case progress. By providing goal directed case management, rehabilitation can make sure that both parties benefit from the process. It can also provide vocational assessments for litigation. Rehabilitation ensures the injured person receives the most appropriate treatment and that they recover as quickly as possible. And because it is a fully managed service, employers can actively help staff return to work and insurers can control and reduce their claims cost.
Spiralling costs
The cost of staff absence is escalating and organisations need help to find a way of managing the effect it has on their businesses. Traditional approaches to absence management are stopping people getting back to work. There is also a lack of understanding of the cost of absence, combined with a heavy focus on property and financial risks, when employee risk should be high on the agenda.
Only through a combination of employee risk assessment, EAPs, occupational health and rehabilitation can the market develop an effective means of reducing the impact of staff absence. Although staff absence is an inevitability of business, through an integrated approach the industry can help organisations improve employee productivity by managing sickness and absence and employee wellbeing. This can all be achieved by understanding the factors influencing employee wellbeing and absence and introducing employment practices that promote wellbeing, supported by access to expert care and a proactive approach to helping people back to work.
By creating a proactive approach, insurers will be able to help employers provide a comprehensive network of support to staff throughout their life cycle. A combination of dedicated HR policies, training and rehabilitation provides a welcome alternative to the 'get well soon' card in speeding up the recovery process and facilitating a productive and successful return to work wherever possible.
Tim Ablett is chief executive at FirstAssist
COVER notes
• Sickness absence costs employers £12bn each year.
• EAPs give employers and staff access to professional counselling and advice.
• To reduce absence costs, EAPS need to be integrated with occupational health service, rehabilitation and risk management.
