The hidden cost of long-term absence, why income protection matters

When a valued employee is away from work for an extended period, the impact can be felt across the whole organisation. It’s not just about covering their workload; long-term absence can affect team morale, overall productivity, and even workplace culture. That’s why income protection insurance should be seen as an essential part of a company’s strategy to support its people and protect the business.

Unseen consequences for the workforce

Long-term absence often hits at the heart of a team. Tasks pile up, colleagues step in, morale dips and pressures rise. The person who is away may feel isolated, anxious about their return, or uncertain about their financial position – perhaps feeling financially pressurised to return to work too early in their recovery journey. Meanwhile, those still working may find themselves covering extra workloads, which increases stress and heightens the risk of further absence.

From a business perspective, this dynamic can lead to reduced engagement, diminished performance and turnover that comes at an avoidable cost.

Financial impact on the employer

The direct cost of absence is obvious - salary still being paid, recruitment or agency fees, training for temporary cover. But it is the indirect cost that often catches companies off guard. Productivity falls when roles aren’t filled or when tasks are redistributed. Projects may be delayed, customer satisfaction may suffer, and reputational risk can grow if the absence affects client delivery.

Analysis by Howden and YouGov shows that absence due to long-term health conditions continues to rise among UK employers, highlighting the importance of proactive planning.

The individual at risk

No one plans to be off work for months. Illness or injury can strike anyone at any time. For the person affected, the concern is multi-layered: health and financial well-being. Without income protection or equivalent arrangements, an extended absence can lead to significant financial stress - adding to the burden that the illness or injury already brings.

Putting income protection insurance in place shows employees that their wellbeing is taken seriously and that the business is committed to supporting them through recovery and return to work.

Why income protection makes sense

Income protection provides a percentage of salary if the employee is unable to work due to injury or illness. But it offers more than pure financial cover. Many schemes provide access to support services such as rehabilitation, vocational guidance and employee assistance programmes - tools that help return-to-work outcomes and reduce the duration of absence. 

In practical terms, income protection helps employers:

•    Reduce the financial risk associated with long-term absence.
•    Support the workforce’s resilience and continuity.
•    Build a culture of care, which aids retention and reputation.
•    Demonstrate a benefits strategy aligned with wellbeing and business performance.

Positive culture and retention

Offering robust income protection speaks volumes about how a business views its people. It plays a key role in attracting and retaining talent. In a job market where meaningful benefits matter more than ever, employees look for employers who provide tangible support - not just a salary. 

Taking action – how to make it work

Implementing income protection doesn’t need to be daunting. There are some best-practices employers can follow to help everything run smoothly:

•    Review your current absence data: how many long-term cases, what cost, what return-to-work success rate.
•    Select an income protection solution that fits your business size, risk profile and workforce structure.
•    Ensure the policy includes return-to-work support, not just pay-out provisions.
•    Communicate the benefit clearly: make sure employees understand what covers, when and how it works.
•    Monitor outcomes: track how the solution helps reduce absence duration, improve return-to-work rates and support employee satisfaction.

Long-term absence isn’t just an HR issue, it is a business continuity, culture and financial issue. By integrating income protection into your benefits strategy, you not only protect your people but strengthen your organisation.

If you’d like to explore how income protection can form part of a wider benefits approach that connects with workforce wellbeing and business objectives, contact our friendly team of experts today.

Howden Employee Benefits & Wellbeing is part of the Howden Broking Group. Registered in England and Wales under company number 2248238, with its registered office at One Creechurch Place, London EC3A 5AF. Authorised and regulated by the Financial Conduct Authority. Calls may be monitored and recorded for quality assurance purposes.