The review conducted by occupational health expert Steve Boorman revealed today that if the organisation was able to reduce its staff absence levels by a third, it would save 3.4 million working days a year - drastically cutting staff costs.
Almost half of all NHS staff absence is accounted for by musculoskeletal disorders such as back pain and more than a quarter by stress, depression and anxiety.
Boorman also called on the NHS to promote healthy living to members of the public.
The Government accepted all the recommendations in the report, which found high rates of illness and stress are impacting on patient care.
Michelle Mahdon, health and wellbeing programme leader at The Work Foundation, said: "We very much welcome the final report from the Boorman Review and its recommendations. Putting a strong emphasis on the need to address organisational behaviours as a route to improving health and wellbeing is an enlightened and critical step that the NHS must take up.
"The report has made a compelling case for change, highlighting the significant costs of ill health to the NHS and the impact on quality of care. We believe the recommendation to embed the health and wellbeing of staff into NHS systems and infrastructure is core to ensuring the success of the NHS, its ability to flourish in the future and to enhance its ability to deliver quality care to its patients and staff. The report should leave the NHS and Government in no doubt as to the need to act now and, crucially, how to act."
And Alistair Dornan, head of wellness productivity management at Right Management, added: "Boorman's Review is vital and timely, following the MacLeod Review into employee engagement earlier this year and the work of Dame Carol Black and Lord Darzi. We are in one of the most volatile economic climates of our lifetime and it is right that employee wellbeing is moving to the top of the business agenda.
"After years of working with organisations in both the public and private sectors we are able to benchmark the benefits of investment in employee wellbeing: organisational performance improves 2.5 times; employee engagement increases nearly 8 times, and talent retention improves to the tune that employees are 1.5 times more likely to stay for at least five years.
"Boorman's recommendations will not be easy to achieve but if implemented the NHS will be tackling absenteeism and increasing productivity. It will create a more efficient service and demonstrate that investment in staff wellbeing is a business imperative."