Corporate Investigations

The cost of fake long-term sickness (or non-genuine sick leave) to UK businesses is a significant issue.

Here’s a breakdown of the various ways fake long-term sickness can affect businesses financially, along with estimates of the total costs:

1. Lost Productivity

The most direct cost is lost productivity when employees are absent from work, especially for long periods. In cases of non-genuine sickness, businesses are paying employees to be absent without any actual contribution to the organization’s objectives. 

2. Direct Financial Costs: Sick Pay

Under UK law, employees who are off work due to illness for more than 7 days are entitled to Statutory Sick Pay (SSP), and some companies offer company sick pay (CSP) in addition to this. If an employee takes fake long-term sickness leave (or is absent for longer than necessary), businesses could be paying out for weeks or even months without any real medical justification. This increases the financial strain on companies, especially small businesses or those in industries with limited resources for managing absenteeism.

3. Recruitment and Training Costs

If an employee is absent for an extended period, businesses often need to recruit temporary workers or staff from other departments to fill in. These costs can be particularly high in sectors like healthcare, retail, and manufacturing, where specialized knowledge or skills are required to cover for long-term absences.

4. Impact on Employee Morale and Engagement

The presence of employees who take fake sick leave can affect the morale of the team. Other employees may feel they are taking on additional work to compensate, which could lead to decreased motivation and increased absenteeism. This can have a long-term impact on company culture and employee engagement, potentially leading to higher turnover rates or reduced productivity.

5. Estimates of Costs for Fake Long-Term Sickness

• The average cost of sickness absence per employee in the UK was estimated at £1,000-£1,300 per year.

• If we assume that 40% of sickness absences may be non-genuine (as some reports suggest), that would imply that a significant portion of this total cost—billions of pounds annually—could be related to employees taking sick leave when they are not actually ill.

A more specific estimate from a 2017 study by the British Chamber of Commerce (BCC) indicated that sick leave abuse costs the UK economy over £5 billion a year in lost productivity and absenteeism. This figure would be higher if long-term fake sickness absences were accounted for in greater detail.

7. The Broader Impact

When companies do not properly manage sick leave, particularly long-term and non-genuine absences, the effects can ripple throughout the business ecosystem. These impacts include:

• Reduced competitiveness: Companies with higher absenteeism rates may struggle to remain competitive in their markets.

• Increased insurance premiums: Higher absenteeism rates can also lead to increased insurance premiums and higher costs for occupational health services.

Conclusion

The exact cost of fake long-term sickness to UK businesses is difficult to pinpoint, but estimates suggest that non-genuine sick leave accounts for billions of pounds in lost productivity and increased costs annually. The broader economic impact includes recruitment and training costs, potential legal complications, and decreased employee morale, all of which can strain business resources and undermine long-term profitability.

Given the financial strain that absenteeism (both genuine and non-genuine) can place on businesses, many companies are investing in better absentee management systems, surveillance, and investigative services to ensure that sick leave is being used appropriately and not abused.