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Record numbers fall out of workforce due to long-term sickness

Economic inactivity due to long-term illness has reached a record high, according to data released today (15 August) from the Office for National Statistics (ONS).

There were 26,000 additional people recorded as economically inactive between April and June 2023. 

This means a total of 2.58 million people are off work due to chronic illness, a figure that has risen by 449,000 since the start of the pandemic in January 2020.

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Brett Hill, head of health and protection at consultancy Broadstone, said long-term sickness is a critical factor in the UK’s productivity.

He said: “The crisis in the NHS continues to weigh on the economy. The government’s pledges to cut waiting lists are failing to bear fruit, leaving the UK’s workers struggling to access diagnoses and treatment to keep them in good health.”

Hill said the government needs to encourage employers to invest in occupational health benefits.

He said: “The government recently launched a consultation to increase employer uptake of occupational health services to keep workers healthy and reduce the numbers out of work due to long-term sickness.

“While undoubtedly a welcome initiative, this only scratches the surface of what the government could be doing to help employers address sickness absence issues. Incentives for employers to fund access to healthcare for employees must be on the table.”  

Kate Shoesmith, deputy chief executive of the Recruitment and Employment Confederation (REC), said long-term sickness is contributing to the ongoing skills shortage.

She said: “We’re getting a sense of a loosening jobs market but the demand for talent in certain sectors remains high. 

“The issues brought up in the ONS’ report are deeply intertwined. It’s particularly concerning to see the record high of economic inactivity due to illness while we continue to see significant problems recruiting and retaining staff in the health and care sectors. 

“We need a fundamental rethink of the models of work in the NHS and beyond.”  

Pay rises increased by an average of 7.8% in April to June 2023 compared with the year before, the highest growth rate since records began in 2001.

Annual growth in employees’ average total pay (including bonuses) was 8.2%, which was affected by the NHS one-off bonus payments made in June 2023.

However, when adjusted for current high levels of inflation, pay excluding bonuses rose by 0.1%.

Jon Boys, senior labour market economist for the CIPD, said pay must keep pace with inflation to alleviate the cost of living crisis.

He said: “We can finally say that pay is growing. While this may be good news for workers, high nominal pay rises are now an established feature of the labour market and this will worry the Bank of England who will be keen to mitigate the effects of a wage-price spiral.

“Even once pay starts to rise in real terms it will be some time before the ground lost during the squeeze will be made up.”