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Britain’s companies are facing a critical challenge with over one in five working-age adults out of the workforce, with ill-health and disability as major drivers.

Two recent reports, the ‘Keep Britain Working’ review, led by Sir Charlie Mayfield and research from employee benefits provider Everywhen, paint a bleak picture of the nation’s employment record.         Sir Charlie, the former chairman of John Lewis, said Britain had an 'insidious problem' with employees dropping out of employment after becoming sick. His research showed about 300,000 people a year dropped out of employment because of health conditions and only had a 3.8% chance of returning to work within a year.

The longer an employee remains disconnected from work, the greater the risk of declining confidence, worsening mental health and permanent withdrawal from employment.

The pessimistic conclusions support rising concerns over Britain's ballooning welfare bill. The Office for Budget Responsibility (OBR) expects the UK’s welfare bill will total £333 billion this year and by the end of the decade, the annual cost will have climbed to £407 billion.

The Everywhen research found that 58% of employers believe long-term absences have a high or severe impact on their day-to-day operations, compared with 30% for short-term absences. For Small to Medium-sized Enterprises (SMEs), this has high costs, with the average cost of recruitment and training at over £11,000 per replacement and lost profits of £120 per day.

Sir Charlie was critical of both employers and employees in the handling of sickness absence. He identified a breakdown of communication once an employee goes off sick, arguing that many employers have become hesitant to contact absent workers. Employers were overly concerned about grievances, complaints or employment tribunal claims if they kept in contact with a sick employee.

He said this ‘culture of fear’ left employees isolated from the workplace at a time when support and engagement are most needed.

Sir Charlie Mayfield recommends that sickness reporting should involve a direct conversation with a manager rather than relying solely on emails, texts or messaging apps. Establishing an open dialogue can help employers understand the problem, provide support and begin planning a realistic return-to-work pathway.

He was also highly critical of the ease with which sick notes could be issued. Over 11 million sick notes were issued last year, 93% of which declared employees unfit to work.

Medical conditions

The health statistics make depressing reading. Everywhen's research identified chronic illnesses such as heart disease and diabetes as the leading cause of long-term absence, accounting for 28% of cases.

Acute medical conditions, including cancer and stroke, followed closely at 27%.

Mental health issues also feature prominently, with anxiety and depression linked to home-life pressures responsible for 21% of long-term absences, while work-related stress accounted for a further 18%.

The demographic group most likely to experience long-term sickness absence was among employees aged 45 to 60, reflecting the increased likelihood of developing chronic health conditions along with other factors.

The most striking figures from the ‘Keep Britain Working’ review were the rocketing numbers of 16 to 24-year-olds reporting health conditions. It increased 77% between 2015 and 2024, with half of the cases citing mental health issues.

What to do

For employers, the message is clear: prevention and early intervention are critical. One of the most effective measures is maintaining regular and supportive contact with employees from the start of an absence.

Employers should also make greater use of workplace health support. Flexible working arrangements remain the most widely used preventative measure, offered by 41% of businesses.

Rehabilitation support can be particularly valuable. Physiotherapy for musculoskeletal conditions, mental health counselling and specialist clinical advice can often reduce recovery times and help employees return to work sooner.

It is also important that employers know what’s going on, and monitoring trends can enable organisations to identify emerging health concerns and target support where it is most needed.

Employers who focus on early engagement, health and wellbeing support, flexible working and effective rehabilitation are more likely to retain experienced staff and reduce the business disruption caused by prolonged absence.