More than a third of employers are choosing to fund support for staff facing illness or injury on an ad hoc basis, a practice experts say can create financial risk, legal headaches and workplace inequality.
New research from GRiD, the industry body for group risk protection, found that 36 percent of employers cover support for new cases of injury or illness individually, rather than through structured employee benefits. While this approach may seem compassionate and flexible, GRiD warns it can quickly become unsustainable.
Katharine Moxham, spokesperson for GRiD, said the intention behind this funding method was often good but the execution left businesses exposed.
“Every employer naturally hopes their staff can return to work and full productivity as swiftly as possible following an absence,” she said. “However, this is not always the reality. Employers risk incurring prolonged and potentially costly support obligations, often without a definitive endpoint if they fund support on a case-by-case basis.”
Unpredictable and Potentially Unfair
According to GRiD, there are four main problems with funding illness and injury support individually:
Lack of disclosure – Employers may not realise a member of staff is struggling, especially if employees are reluctant to disclose personal health issues.
High, variable costs – Some employers end up paying hundreds of thousands of pounds in one-off support, making it difficult to budget across a workforce.
Budget instability – The number of employees needing help fluctuates year to year, raising questions about what happens once an internal budget is exhausted.
Inequity risk – Providing different levels of support to different employees, even unintentionally, can leave businesses open to criticism or legal action for inconsistent treatment.
These challenges are compounded by a lack of clear policy or structure. GRiD found that only 26 percent of employers have a set policy offering support after a defined number of weeks’ absence. Another 20 percent provide help from the first day of absence, and 19 percent do so after a set number of months. Just 12 percent said they prioritise preventative care to reduce the likelihood of illness or injury in the first place.
Prevention Better Than Cure
Proactive support is increasingly being recognised as not only more ethical, but also more economical. Preventative care is a central focus of the Keep Britain Working Review, a government-backed initiative led by former John Lewis chairman Sir Charlie Mayfield. The review aims to strengthen the UK workforce’s resilience and retention through better support structures, with findings expected later this year.
Employers already offering preventative measures may find themselves ahead of the curve. These can include access to occupational health, mental health support, stress management and healthy lifestyle initiatives, all of which help reduce the likelihood of long-term absence.
Group Income Protection Offers Structured Solution
One option highlighted by GRiD is Group Income Protection (GIP). This type of insurance provides both financial support and a range of wellbeing services to help employees recover and return to work. Unlike ad hoc payments, GIP ensures consistency, equity and cost-effectiveness.
GIP can cover part of an employee’s salary if they are unable to work due to long-term illness or injury, while also offering rehabilitation services, return-to-work programmes and access to clinical expertise. It allows employers to meet their duty of care in a structured way, without creating disparities between individual cases.
Moxham said structured solutions were better aligned with modern expectations of employee support.
“Employers should take a broad approach to employee support, recognising that preventative, immediate, and ongoing interventions are interconnected rather than isolated efforts. While these forms of support can be funded directly, taking advantage of the wide range of employee benefit options available is a more financially effective and comprehensive solution.”
Lessons for Employers
Employers reviewing their absence policies are advised to consider:
- Formalising support structures: Rather than reacting case by case, develop clear protocols for how and when support is offered.
- Building in preventative measures: Invest in early interventions to reduce long-term absence risk. This can include health screenings, mental health resources and workplace ergonomics.
- Using insurance-backed solutions: Consider products like Group Income Protection to provide predictable, fair support across the board.
- Training managers: Equip line managers to spot early signs of ill health and direct staff to appropriate resources quickly.
- Reviewing legal risk: Ad hoc decision-making may create inconsistencies that could lead to discrimination claims or complaints about unfair treatment.
Preparing for Policy Changes
As the Keep Britain Working Review progresses, there may be regulatory or guidance changes encouraging or requiring more consistent support structures. Employers that have already embedded structured benefits and preventative support are likely to be better placed to adapt quickly.
As Moxham put it, adopting a comprehensive and integrated approach to staff support is not just a moral or legal obligation but also a strategic one.
“Organisations that integrate support through employee benefits will also be better positioned to meet the needs of their staff and are likely to be better prepared for any policies or recommendations that arise from the Keep Britain Working Review.”