UK businesses should manage absence in the short-term by decreasing the amount they will pay for future sick leave through income protection, an insurer has urged.
Recent government figures have shown employers face an annual bill of around £9bn for sick pay- with an estimated overall cost of £3.1bn to the private sector each year.
While the government plans to launch the Health and Work Service to encourage more UK workers off long-term sick leave, businesses will "be crying out for a more cost-effective way" to manage absence in the short-term, PG Mutual said.
Mike Perry, chief executive, of PG Mutual said: "While providing an insurance policy for every staff member might not seem like a way to save money at first glance, by taking out income protection, businesses are turning a potential cost of thousands if an employee takes long-term sick leave into a small, affordable monthly cost that can be budgeted for.
"By providing each staff member with their own policy, businesses are also taking away the responsibility of having to cover the cost of sick pay, as their policy will pay them a monthly income, on top of state sick pay. Even the administration costs of organising sick pay can be negated."
