HR Bulletin, Sickness Absence and Labour turnover release

Industry investing in workforce wellbeing, sickness absence up, demand creating Labour turnover spike – Make UK surveys

30% of long-term absence due to mental health issues and stress

Upcoming Budget is an opportunity to help employers alleviate labour shortages and offer better occupational health

Key findings:

Sickness absence has increased in 2022 for the first time in over five years
Cause of absence – direct split of physical health issues and mental health problems
Long term absence driven by mental health issues, especially Covid fallout
Nearly half of employers have increased their spending on wellbeing programmes for their staff
Excluding redundances, labour turnover in 2022 is up as shortage of workers makes it a good time to find best paid roles
Pay settlements are up with 17.5% of companies paying an increase of more than 6% in 2022 in order to keep staff
Only just under a quarter of companies have managed to successfully fill their vacancies

In the last two years, manufacturers have realised that to keep sickness absence down and to retain their skilled workforce they have to invest in the wellbeing of their staff. Three new reports published by Make UK have mapped out Sickness Absence Benchmark, Labour Turnover and HR Bulletin statistics cross the sector, including a deep dive into pay settlements and attempts to recruit.

The overall picture is positive with nearly half of companies (44%) having increased the amount they spend on employee wellbeing projects and over half (51%) maintaining their 2021 spend levels. Some 28% spent more than £100 per employee.

Sickness absence however is up for 2022 for the first time in over five years, increasing from 2% in 2021 to 2.5% in 2022. There is an even split between physical health issues and mental health problems. The Sickness Absence survey found that nearly half of all long-term absences are caused by either mental health issues or work-related stress. Some 30% of long-term absence came from mental health problems while 11% was found to be caused by work-related stress.

Labour turnover was down to 20% from 25% in 2021, but when you exclude redundancies, the numbers are actually up from 17% to 19.9%. These numbers were largely driven by employees taking advantage of the current labour shortage to find the best-paid jobs available for them or taking the opportunity to progress their careers. Half of companies questioned for the surveys said that half of their staff turnover had come about because of retirement. Sickness absence was another driver, with 25% of companies saying that ill-health had led to employees leaving during 2022.

The current cost of living crisis has driven pay settlements up, with companies in many cases having to offer more than they had originally budgeted for during the course of 2022. Of those companies which had agreed a pay increase in the last three months, 17.5% had agreed settlements of over 6% with their staff in a bid to keep their workforce and help mitigate with current household costs. 9.4% said they had paid increases of 6% with 16.3% giving their employees an increase of 5%.

Recruitment has not been easy in the current labour market. Nearly three quarters of companies (82.5%) said they had tried to recruit new staff during the last three months, but only 24% told us they had successfully filled all their vacancies. Some 35% had filled nearly all the vacant roles with 31% filling just some of the roles on offer.

Jamie Cater, Senior Employment Policy Manager Make UK said:

“Pay settlements have necessarily been more generous as companies struggle to keep staff and fill vacant roles. There is also a clear message from manufacturers that they realise that a happy workforce is a more effective one and to that end they have gone that extra mile to make sure that wellbeing services are as good as they can be.

“The fact that long-term absence is linked so directly with mental health and stress issues emphasises just how important it is for business leaders to embed wellbeing programmes firmly at the heart of their companies to keep staff but also to make sure that staff are in a position health wise to work at maximum effectiveness.

“Prevention as well as cure is key and we hope that at the upcoming Budget the Chancellor stands up with measures to immediately ease the acute labour shortages we are seeing, put in place policy levers that will help manufacturers continue to train the people they need and ensure employers of all sizes can offer the best occupation health schemes possible