Sickness absence rates have decreased for 40% of employers in the last 12 months, a survey for Group Risk Development (GRiD) has found.
This is a 6% increase on the year before however 15% of employers surveyed said staff sickness rates had increased.
Good morale was credited for the decline in sickness rates by 62% of employers, 36% attributed it to staff anxiety about losing their jobs if they didn't come in to work.
Health and wellness initiatives were credited with helping lower absence rates by 21% of staff.
The survey questioned 500 businesses with between 5 and 1000 employees.
The survey found that 78% of employers now actively record monitor and manage absence, which is estimated to cost UK businesses £29bn each year.
Katharine Moxham, spokesperson for Group Risk Development, said: "It's really encouraging to see that businesses have various strategies in place to prevent and manage absence, and the fact that this has dropped could be down to the benefits of these initiatives filtering through the business.
"However, sickness absence is costing 62% of employers questioned between 1 and 4.99% of their overall payroll, highlighting the need for a long-term strategy to ensure good morale across the workplace and promote health and well-being to keep employees in work.
"Absence rates may be improving, but it's vital to keep these initiatives going to cushion against future absences and avoid any surprise costs."
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