Manufacturers Increasing Investment In Wellbeing

Almost half of employers have increased spending on workforce health and wellbeing in the last year, and are seeing dramatic improvement in staff retention as a result, according to the date contained in two new surveys published by Make UK on Sickness Absence and Labour Turnover across manufacturing.

Key Findings

• Overall sickness absence has decreased in 2023 compared to 2022

• Four in ten companies who increased their investment in health and wellbeing saw staff retention rise and absence fall by a quarter

• There was also a dip of a fifth for those employees who are regularly absent

• Physical illness the biggest cause of absence followed by mental health

• Labour turnover in manufacturing has reduced significantly in 2023

Britain’s manufacturers have substantially increased their investment in the wellbeing of their staff over the last twelve months in a bid to tackle sickness absence and retain their skilled workforce. To build on this Make UK is urging the Government to provide tax relief on a range of Occupational Health services in this week’s Budget Statement.

The overall picture is positive with the average days lost to absence falling to 4.7 in 2023 compared to 5.6 in 2022. The main cause of long-term absence is physical health (81.1%) while long-term mental health is the cause of a third (33.6%) of absence.

Despite the overall fall companies are still seeking ways to reduce absence and retain staff with more than four in ten companies (45%) increasing their investment in workforce health and wellbeing in the last year, while nearly half (49%) had maintained their level of wellbeing investment. Further the amount companies are investing per person has also increased with a third of companies (33%) investing more than £100 per employee.

As a result of this investment more than four in ten companies (40.6%) have seen increased staff retention while almost a quarter (24.6%) have seen reduced days lost to absence. Almost a fifth (18.6%) have seen increased productivity.

Companies saw the best return from direct welfare initiatives. Employee assistance programmes were the most popular measure offered by companies (42.1%) followed by counselling services and other therapies (38.2%). Free eye tests and health screening were also offered to employees by 35% and 30.9% of companies respectively. Private Medical Insurance was also offered by almost a third of companies (30.9%).

Other measures provided by companies to improve workforce satisfaction and reduce absence were free flu vaccinations, advice on healthy eating and lifestyles, alongside gym subsidies.

A separate survey on labour turnover showed that, after reaching a historically high level in 2022, turnover in manufacturing has reduced significantly in 2023, down from just over a fifth (20.7%) to 16%. This is the lowest since 2018.

Excluding redundancies, this number comes down by almost 13%, still higher than pre-pandemic but a steep reduction compared with the last two years.

A lower number of live vacancies in the sector, shorter recruitment lead times, and fewer barriers to successful recruitment also show a slowly improving picture across the sector.

However, there remain significant challenges for manufacturers. Seeking higher pay and opportunities for progression remain the most popular reasons for staff leaving manufacturing businesses, and nearly half of employers have seen staff leave due to retirement in the last twelve months.

Jamie Cater, Senior Employment Policy Manager Make UK said: “While manufacturers still face a challenging environment – ongoing shortages of technical skills, rising employment costs and an ageing workforce – recruitment and retention pressures have eased in the last few months."

"Employers are seeing the benefits in particular of increased investment in employee health and wellbeing, and the Government has an opportunity at the Budget this week to support businesses to do more of this by expanding tax relief on a range of Occupational Health services to help people stay healthy and productive at work."