Businesses Ready to Confront Long-Term Sickness – If Only We Allow It

The Growing Mental Health Crisis and Its Impact on the Economy

The surge in individuals being signed off work due to mental health issues is a serious concern that affects both individual well-being and the overall economic stability of the country. While this issue is complex, there are encouraging signs that the private sector is stepping up to address it.

Recent employment data highlights some troubling trends. According to the Office for National Statistics (ONS), various economic indicators are moving in the wrong direction—wages are declining, growth is stagnant, and unemployment is rising. However, these figures only tell part of the story. A more significant challenge lies beneath the surface.

Following the outbreak of the COVID-19 pandemic in early 2020, there was a sharp increase in the number of people claiming long-term sickness benefits. This trend, while expected, has not diminished over time. Instead, the rate of sickness benefit claims has remained high. When comparing the period from 2019 to 2023, the number of people who are economically inactive due to physical disabilities has increased slightly. However, the most alarming change is seen in the category of mental health conditions such as depression, anxiety, and other psychological disorders. The number of individuals in this category rose from approximately 965,000 in 2019 to 1.35 million in 2023.

While some individuals in this group may genuinely be unable to work, many could benefit from returning to the workforce, even in a part-time capacity. Employment can play a crucial role in improving mental health outcomes and providing a sense of purpose and structure.

The financial burden on the Treasury is also growing. With employment numbers continuing to decline, the government must find effective solutions to support those struggling with mental health issues. Fortunately, the private sector is showing a willingness to contribute to this effort.

Businesses Are Investing in Employee Well-Being

Over the past year, the Jobs Foundation has engaged with numerous employers across the UK, including major employment and training programs. These conversations have revealed a wide range of businesses and organizations that are actively working to support employees with mental health challenges, either by helping them return to work or stay employed.

One notable example is Lynas Foodservice, a family-owned business with a 74-year history and around 700 employees. Based in Northern Ireland, the company supplies food to leading brands across the region and beyond. Lynas Foodservice takes employee mental health seriously, dedicating resources to ensure staff feel supported and valued.

Andrew Lynas, the grandson of the company’s founder and current CEO, emphasized the importance of addressing mental health proactively. “I wanted to make how we deal with our employees’ mental health more prescriptive and proper,” he said. “Twelve and a half percent of our net profits go to our charitable trust every year.”

Lynas Foodservice is just one of many companies demonstrating a commitment to employee well-being. The Jobs Foundation has found that British businesses are not only willing to tackle mental health challenges but are optimistic about doing so if the government provides the right support.

Challenges Facing the Private Sector

Despite this positive outlook, several obstacles remain. The upcoming Employment Rights Bill, set to take effect in 2027, has raised concerns among businesses. The bill includes provisions such as “day one rights” for new employees, which could discourage companies from hiring individuals who may be considered “risky,” such as those who have been out of the workforce for extended periods due to long-term sickness benefits.

Another issue is the rise in Employers National Insurance (NI) contributions, which is making it more difficult for companies to take on new staff. As the cost of hiring increases, it becomes harder to bring people off benefits and into meaningful employment. If the goal is to reduce the long-term sickness benefit bill and improve the lives of those with mental health conditions, it is essential to make it easier for businesses to do so.

A Call for Collaboration

The incoming Labour government faces a challenging task in addressing the economic issues facing the country. Unfortunately, policies such as the Employment Rights Bill and the rise in Employers NI contributions seem to be moving in the wrong direction. While businesses are ready to hire the people needed to help revive the economy, they require support from the government to make this possible.

By working together, the public and private sectors can create a more sustainable and inclusive workforce that supports both economic growth and individual well-being.