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Employers are cutting back on long-term sickness and death-in-service benefits

Staff are being forced to fend for themselves as a growing number of employers are no longer offering long-term sickness benefit or death in service benefits.

According to research from Group Risk Development (GRiD), the trade organisation for the group risk industry, workplace paternalism is becoming outmoded and employers now expect staff and their loved ones to take care of themselves.

More than a third (38%) of businesses said they felt no obligation to support employees or their families in the event of their death in service. And, in keeping with this growing drive for self-sufficiency in the workplace, 55% of businesses relied solely on state- provided statutory sick pay of £79 per week to support those on long-term sick leave.  

Katharine Moxham, spokeswoman for GRiD, said: "Increased mobility has changed the way we work beyond recognition - with inevitable consequences for an employer's relationship with their workforce. So, where once companies felt duty bound to provide financial support, leisure facilities and even housing for employees, today's provision is likely to be much more streamlined.

"This break with paternalism is not necessarily a bad thing but we need to think carefully about how we ensure business continuity without this framework in place.  Fostering self-sufficiency is a noble aim but it's no easy task to get consumers to take personal responsibility for their own protection needs. What's more, it's not just employees who need protection. Long-term absence can have a devastating impact on a business too and employers need to factor this into their plans."

GRiD research shows 36% of those employers who provide group risk benefits (including group life insurance, group income protection (GIP) and group critical illness) do so as a way to support staff and their families. Setting up a scheme typically has an ongoing cost of around 1% of payroll.

Moxham added:  "I see no reason to hark back to the time of workplace paternalism but I would encourage businesses to take positive steps to create a healthy, modern and supportive working culture in its place. By setting up a GIP policy, they can mitigate the risks and associated costs of long-term employee absence and provide a highly valued benefit for employees."