Illness behind rise in economically inactive

Business groups in the UK expressed concerns over companies' worker health policies after official data on Tuesday showed a record 2.5 million people were now unable to work because of long-term sickness.

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The Office for National Statistics (ONS) said that 21.6 per cent of the nation's working-age population were now economically inactive, with an additional 133,000 people classed as long-term sick in the third quarter of this year

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More support to help people return to work after illness

"During the latest three-month period, the increase in economic inactivity was driven by those who are long-term sick, who increased to a record high," the ONS said.Tony Wilson, Director of the Institute for Employment Studies, called for more government support to enable people to return to the jobs market.“There are now 630,000 more people out of work than before the pandemic began and today’s figures show clearly that people aren’t becoming unemployed, they’re leaving the labour force altogether," he said."The number of people leaving work to unemployment over the last three months was below a quarter of a million for the first time on record, while more than twice as many people left work to economic inactivity."

Linking wellness with economic output

Jane Gratton, Head of People Policy at the British Chambers of Commerce, said concerns were growing over the number of people leaving the labour market through long-term illness and early retirement."This will damage opportunities for individuals and the economy," she said. "The government and employers must work together to solve the labour market conundrum. We must look at ways to help people experiencing ill-health stay in work and to encourage skilled and experienced retirees to return to the workplace.“We need to remove barriers to work, by offering flexible workplaces, rapid re-training opportunities and better access to childcare and public transport. And, crucially, we need to invest more in the training and upskilling of everyone in the workplace so that we are ready to grasp new opportunities for growth."

Skills gaps remain

Jonathan Boys, Labour Market Economist at the Chartered Institute of Personnel and Development (CIPD), pointed out that while the unemployment rate had increased to 3.6 per cent, it remained the lowest in almost 50 years.Similarly, while the number of job vacancies had fallen for the fourth consecutive month, they still stood near a record high of more than 1.2 million."Recruitment and retention remain challenging for businesses as demand for candidates outstrips available supply," Mr Boys said.“This month's statistics highlight some pressing concerns for the UK. The inactivity rate continues to increase, being driven by long-term sickness. In addition to the human cost of ill health, there are consequences for labour supply."

New benchmark for the health support businesses offer employees

The Confederation of British Industry (CBI) launched a new index designed to benchmark businesses’ health provision, to coincide with publication of the ONS data.Figures from the organisation showed the UK loses 131 million working days a year to ill-health, costing the nation around £180 billion in GDP.The CBI's Work Health Index (WHI), launched in conjunction with the Business for Health organisation and supported by the NHS and the government, will trace firms' health provision across the economy.Brian McBride, President of the CBI, said: “Labour market resilience is a precondition to growth. Without healthy, productive employees, the UK economy will be unable to achieve the growth it sorely needs.“Businesses understand the link between health and wealth, and have a major role to play. While the NHS continues to serve us all in our moments of immediate need, employers across the UK have a golden window emerging from the pandemic to lean into long-term measures which enhance employee health and wellbeing.“With the UK staring down a fiscally constrained period, the moment to boost the UK’s preventative health model is now. The Work Health Index is here to help achieve just that.” 

Is ill-health the whole story?

However, Kitty Ussher, Chief Economist at the Institute of Directors, said the labour market figures called into question whether long-term illness was the main driving force behind the rise in those counted as economically inactive.“We now have a deeper understanding of the reasons many people have left the labour market," she said. "Although ill-health is undoubtedly a factor, the ONS has cast doubt on whether it is the main reason for the initial decision to stop work: two-thirds of those of working age who report as long-term sick were economically inactive for a different reason in the previous three months.”Ms Ussher added: “The overall picture has changed little in recent months: low unemployment, high vacancies and a high rate of economic inactivity, all of which point to continuing difficulties for employers trying to recruit. Even the period of market instability did not dent hiring, with an additional 74,000 people added to payrolls during October."

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