Impact of Welfare Reform Act on absence management

The introduction of the Welfare Reform Act could prompt employers to take a fresh look at what steps they can take to help long-term absentees return to the workplace, explains Katrina McKeever

The Welfare Reform Act, which came into effect last month, is the government’s latest move to reform the welfare state. It contains powers to replace incapacity benefits with a new employment support allowance following a capability assessment, which will focus on what work those with long-term health conditions can do, rather than what they can not. The aim is to encourage people who have been out of the workforce for a long period of time to return to employment. The measures mark a change in culture aimed at reducing the estimated £13 billion that workplace absence costs the economy each year, according to the 2008 Confederation of British Industry/Axa Absence survey.

Much has been made of the fact that employers could have increased responsibility for staff, particularly those returning to work after a long period of absence. In reality, however, this is a matter of best practice within organisations and it is up to individual employers how far they want to take their responsibilities for rehabilitating staff back into the workplace.

Offering help
However as economic support is withdrawn, employers should be prepared for staff to come knocking on their door. There are many ways that they can help to ease their passage back into the work arena. Sarah Brown, principal, health and benefits at Mercer, says that while the Welfare Reform Act is a positive change, it could be challenging for both staff and employers. “It is better for someone to be gainfully employed, rather than be sat at home doing nothing because that is not good for them and it is not good for businesses and or the nation,” she says.

However, it can be a challenge to get people back into the work culture, both mentally and physically. “What tends to happen is that a lot of people end up on benefits for a very long time. Typically, GPs and others have been focused on what people can not do and they are reluctant to send them back to work until they are 100% fit. If someone has been out of the workforce for a long time it is difficult for them to go back to work. There are psychological barriers and people can become depressed if they are out of work for a long time,” says Brown.

While there is no obligation on them to do so, employers can help by offering access to specialised rehabilitation services. Occupational health schemes and support recovery plans are also valuable tools, as are vocational assessments. In addition, Brown advocates using bio-psycho-social models of treatment to break through the psychological barrier of returning to work. This is widely used in Scandinavia, where 50% of people return to work after long-term absence compared with just one-in-six in the UK.

Employers should also consider shifting their own cultures on workplace absence, as the current model makes it easy to support those on sick leave through company sick pay and income protection policies. However, employers could try and reduce the likelihood of long-term absence through early intervention.

Dudley Lusted, head of corporate healthcare development at Axa PPP Healthcare, says prevention is key, for example, by taking steps to encourage staff to stay fit and healthy. Absence monitoring can also trigger opportunities to help staff who become ill, and timely intervention can pay dividends. Between two-thirds and three-quarters of all workplace absence is down to musculo-skeletal conditions such as back pain, so paying for staff to see a physiotherapist promptly can reduce the amount of time they are away from work, saving money in the long run.

He adds that employers should also look at whether they can offer people the opportunity to return to a different role if they are unable to do their previous job. “Make it as easy as possible for people to return,” he says.

Steve Browning, group protection manager at Friends Provident, believes the Welfare Reform Act will mark a change of culture. “People assume that if something goes wrong the state will pick up the pieces, but that will happen less and less.”

He says this is a good time for organisations with schemes such as group income protection in place to advise staff of the changes and educate them about these benefits.

But any change is likely to be gradual. “We have seen changes to state benefits and sick pay before and only time will tell how effective the latest ones will be at getting people back to work,” concludes Browning

If you read nothing else read this…

  • The Welfare Reform Act, which came into effect on 27 October 2008, replaces state incapacity benefits with employment support allowance.
  • More†employees may return to work as government financial support is withdrawn so employers should be prepared to help staff through access to occupational health services and workplace support. However, they are not legally obliged to do this under the new legislation.
  • Early intervention can help employers to prevent some cases of long-term absence.