Introduction to ill-health costs

An estimated 2.3 million people suffer from ill-health caused by work each year. Some 32.9 million working days are lost annually from people taking time off because of their illnesses.

Work related ill-health can happen in any business, whatever its size. Unlike work injuries, ill-health problems may go unnoticed. They can slowly become worse until the illness becomes permanent and possibly disabling.

You cannot afford to ignore the business costs that ill-health may cause.

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Types of work-related ill-health

There are many different types of occupational ill-health. For example:

• musculoskeletal disorders (including bad backs, strains, 'RSI' etc);
• cancers;
• asthma;
• dermatitis and other skin disorders;
• deafness or hearing loss;
• wibration white finger;
• occupationally related stress;
• asbestos related disease.

Each can seriously affect an individual's quality of life, their ability to work and your buiness.

Long-term absence costs from ill-health are much greater than in the short term. Early action to prevent or rehabilitate illness, which otherwise might result in long term absences, will reduce costs.

The costs of ill-health to a company depend on the nature and extent of illness or disease that is prevalent. If you would like to see examples of the average length of time people are absent from work (if they take time off) then for

• average number of days taken off listed by illness type.
• average number of days taken off listed by industry sector.
• average number of days taken off listed by occupation.

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Costs of sickness absence

Norwich Union Healthcare published (in 2001) a study showing the average employee is off work sick for almost 7 days each year.

The study found the:

• direct costs of sickness absences are best estimated as being £534 per employee per year;
• indirect costs of sickness absences are estimated to be twice the direct costs, ie £1070 per employee per year.
• total cost per employee per year of sickness is approx £1600 - typically around 9% of payroll costs.

While this finding is for general sickness absence, not necessarily work-related illness, it still clearly shows the costs of an employee being away from work.

The Confederation Of British Industry and PPP healthcare survey 'Pulling together - 2001 absence and labour turnover survey' also found similar results. This found on average 7.8 days are lost per employee per year. This is equivalent to 3.4% of the total working time.

Their study found the:

• direct costs of sickness absences to be £434 per employee per year;
• indirect costs (although harder to estimate) were typically said to be £450 per employee per year.

Both of these studies indicate that the indirect costs of absence due to ill-health are at least 1-2 times the direct costs.

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Costs of work-related ill-health

The business costs of ill-health in the workforce come in many forms eg

• sickness absence;
• overtime payments;
• lost production;
• missed deadlines;
• cost of recruiting and retraining of staff employees leave.

There is also the additional strain put on other workers to cover the work of their colleagues.

In 1998 South West Water published a report on the costs of accidents and ill-health in the water industry. This followed a study in their company. The report was published as 'The Frank Davies project Health protection and accident prevention as business imperatives in the water industry'.

South West Water costed the four most prevalent types of ill-health in their industry. These were:

• Work-related upper limb disorders;
• Hand arm vibration syndrome;
• Occupational stress;
• Noise induced hearing loss.

From these, the representative cost of a case of work-related ill-health in the water industry was found to be £8650.

The average cost of Hand arm vibration syndrome was determined to be £11498

The average cost of work-related upper limb disorder was determined to be £5251

All of these occupationally related conditions occur in many industries. The above values illustrate what they might be costing you.

The South West Water report was last updated in 2000. If you would like to print a free copy of it, please click here.

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Costs of back pain

Over 1.1 million people experience musculoskeletal disorders caused by work, with an estimated 12.3 million days lost annually because of these.

Back pain is a major cause of sickness absence from work. Nationally it is estimated that there are around half a million people with some form of back complaint caused by work.

A report by Backcare, the Forum of Private Business and the TUC suggested that back pain is a problem for almost two thirds (63%) of small businesses. They found one in five people working in small firms had back strain. The average small firm was said to be losing 22 days of work a year from back strain.

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Costs of work-related stress

Stress is the natural reaction people have to excessive pressures placed on them. While not an illness itself, if it is prolonged or intense, it can lead to mental and physical ill-health. This can include depression, back pain or heart disease.

In Great Britain, as many as one in five people are suffering from high levels of work-related stress. That's around 5 million workers. An estimated half-million individuals report experiencing stress at a level they believe made them ill. This results in approx. 13.4 million working days lost per year.

Work-related stress can also lead to:

• an increase in sickness absence;
• a reduction in staff morale;
• poor staff performance;
• staff seeking alternative employment. Organisations then have the expense of recruiting, inducting, and training new members of staff.

Increased sickness absence can have a domino effect - one person goes sick which leads to their workload being shared among the remaining staff. They are unable to cope, which affects their health, and this leads to greater sickness absence.

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Ill-health calculator

We have provided a simple calculator to allow you to work out (some of) the costs of ill-health. It helps you determine the wage and replacement costs of emloyees who suffer ill-health at work.

To help you, indicative data is provided for the:

• average time people are off work following ill-health (if they take time off);
• average daily wage costs;
• replacement costs for workers leaving the organisation.

If you have your own data for these, you can use this instead.

To run the ill-health calculator now, please click here.

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Downloadable calculator software

If you want to use the ill-health costs calculator offline, we have provided a version you can download onto your computer. This has exactly the same functionality as the online version.

There are two ways to download the software. Either:

1. load the HTML browser file onto your computer; or
2. download a zipped version of all three calculators in this website.

HTML version

When you have downloaded the file to your computer, double click on the html file to open it in your standard web browser.

To download the file now, please click here.

Zipped version

In the zipped file you will get the:

• Annual accidents calculator;
• Ill-health calculator;
• Incident cost calculator

After extracting the files to your chosen destination, double click on the required html file to open it in your standard web browser.

To download the zipped files now, please click here.

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Other Links

Home Page
Ill-Health Costs Calculator
Accident Costs: work out yours