We need to reimagine the role of business in health to deliver a healthy future of work for all

IPPR, the UK’s leading progressive think tank, has spent the last three years studying the effects of rising sickness on the economy. Throughout the research, IPPR’s Commission on Health and Prosperity has consistently highlighted that poor health harms individuals, the economy, and, as our latest report reveals, businesses too.

Photograph: iStock/fizkes  

Our final interim report found that the hidden costs of poor health to businesses are significant – and growing. We estimate that if workers were as healthy in 2023 as they were in 2018, businesses could have seen gains worth £30 billion. 

Clear incentive for businesses to support employee health

Businesses have a clear incentive to address these issues. Workers in lower-quality jobs tend to show higher rates of presenteeism compared to those in higher-quality roles. By improving job quality, businesses can reduce presenteeism and increase productivity. Reducing presenteeism not only enhances productivity – potentially leading to higher wages for employees – but also promotes better long-term health outcomes, as working through illness is often detrimental to people’s health.

It’s clear that businesses stand to gain from a healthier workforce, but they are also uniquely positioned to help achieve this. Health policy discussions often focus on government action, overlooking the significant role businesses can play. Given that companies employ most of the UK workforce and have far more investment power than the state, it’s time for businesses and government to work together to deliver better health and a stronger economy. 

At IPPR, we’re proposing a new approach: ‘Health in All Industries’. This policy agenda aims to incentivise businesses to prioritise health and strategically align our growth strategy with sectors that contribute most to population health. This involves nurturing innovations, technologies, and businesses that can drive both economic growth and better health outcomes. In other cases, it may require transforming – or even phasing out – industries, products, or practices that harm public health. Thus, our policy proposals fall into two categories:

1. Transition From: policies to steer the UK away from practices, products, or industries that threaten long-term health. This could mean a full transition away from harmful sectors, like tobacco, or transforming industries through measures like reformulation in the food and beverage sector. 
2. Transition Towards: policies to incentivise health-promoting practices and support healthier sectors and brands.  

Introducing a ‘workplace health premium’

One key example of transitioning towards a healthier economy is our proposed workplace health premium. We need a significant improvement in job quality across the UK, and job design is a crucial factor. We believe the Government should introduce a new workplace health premium, which would cut employer NICs for businesses meeting guidelines based on National Institute for Health and Care Excellence (NICE) guidance and the Taylor Review’s indicators of good work.  

The eligibility for the incentive should be dependent upon a number of inputs (presence of staff engagement forums) but also on outcomes (job satisfaction). This intends to ensure that the financial incentive is not deemed a tick-box exercise, but businesses need to invest in their workforce and demonstrate positive change from their actions. Therefore – we feel that this incentive should only need to be temporary – it should be large enough to encourage action initially but then this action will ultimately benefit the businesses’ balance sheets through enhanced productivity or reduced staff turnover.  

Investment is another area ripe for reform. Businesses play a crucial role in the UK’s investment landscape, yet much of this investment does not currently prioritise population health. The Government should build on recent advances in health reporting to establish common health reporting standards. By integrating health into ESG criteria – what we call ESHG – investors would have better insight into the health impact of the businesses they back, encouraging companies to adopt healthier practices or reformulate products to boost their ESHG scores. 

Health-led economy

These policies lay the groundwork for a health-led economy, but we also need measures to address sectors and businesses lagging behind. While the workplace health premium encourages businesses to go above and beyond, some companies may not engage, even though it’s in their best interest. To prevent these incentives from only benefiting firms already inclined to support employee health, we need to raise minimum standards in tandem. 

We propose a new “employee health ‘do no harm’ duty”, modelled on the Financial Conduct Authority’s Consumer Duty. This duty would require businesses to ensure good health outcomes for employees by taking reasonable steps to reduce current harm, avoid foreseeable harm, and act in good faith towards workers. This would function as a ‘Hippocratic oath’ for employers, with outcomes focused on workplace safety, physical and mental health, and inclusive practices. 

Creating genuinely inclusive workplaces

The fourth outcome – ensuring inclusivity – is particularly crucial. As we transition towards outcomes-based regulation, we must avoid creating perverse incentives for employers to ‘manage out’ or avoid hiring individuals with long-term health conditions or disabilities. This outcome should instead place the onus on employers to demonstrate how they are actively supporting and integrating these employees into their workforce. Inclusive health practices should not be an afterthought but a core component of any strategy to improve job quality and employee wellbeing. 

We believe that this move to outcome-based regulation will build upon the Health and Safety Executive’s success in reducing workplace injuries while also tackling the rising number of workers whose jobs are making them ill or worsening their sickness, particularly in relation to mental health. 

The health of the UK workforce is deteriorating, and businesses can no longer afford to ignore the impact of this.  It’s time to embrace a health-led economy – where businesses and government work hand in hand to foster better health, higher productivity, and a stronger economy for all. 

Dr Jamie O’Halloran is a senior research fellow at Institute for Public Policy Research (IPPR).

Healthy industry, prosperous economy report can be found at:

ippr.org/articles/healthy-industry-prosperous-economy

For more information on the work of the IPPR see:

ippr.org

@IPPR

linkedin.com/company/ippr/

Follow Dr Jamie O’Halloran at:

@Jamie_OHall

ippr.org/profile/jamie-o-halloran