The real cost of employee sick leave: why healthcare benefits make financial sense

Employee sick leave is more than just lost hours on a timesheet. When staff are absent, the ripple effects reach across the business - delayed projects, increased workloads for colleagues, and sometimes even a drop in service quality. While occasional illness is unavoidable, frequent or prolonged absences can carry hidden costs that affect both performance and profit.

The ripple effect of employee absence

Most businesses track absenteeism in terms of days missed, but that only tells part of the story. There is a hidden financial burden in terms of disrupted workflows, overworked teams, and lost knowledge. Employees covering for absent colleagues may experience stress, which in turn increases the likelihood of further sick leave. Small gaps can quickly grow into larger operational challenges, particularly in small or specialised teams.

The preventive power of healthcare benefits

Healthcare benefits are an effective tool to manage these hidden costs. Private medical insurance, health screenings, physiotherapy, and mental health support give employees the resources they need to manage their health proactively. Early intervention can prevent minor issues from developing into long-term absences, saving both the employee and the business time and stress.

For example, regular access to physiotherapy can address musculoskeletal problems before they require extended time off. Similarly, counselling or wellbeing programmes can help employees deal with stress, anxiety, or burnout before it escalates into a serious absence.

Financial benefits for the business

Investing in healthcare benefits may seem like an upfront cost, but it often delivers a clear return on investment. Reduced absenteeism, faster recovery, and improved productivity can outweigh the initial expense. Healthcare support can also reduce turnover, as employees who feel supported are more likely to stay, saving recruitment and training costs.

Ultimately, a healthy workforce is a productive workforce. Businesses that provide access to preventative and ongoing care often see improved morale and engagement, which contributes to overall efficiency and profitability.

Practical steps for employers

To make healthcare benefits effective:

•    Assess the specific health risks and needs within your workforce.
•    Offer a combination of preventative care and reactive support, covering both physical and mental health.
•    Consider any tax implications to your employees and whether that might be a barrier to entry
•    Ensure benefits are accessible, simple to understand, and well-communicated to employees.
•    Track usage and outcomes to understand the impact on absenteeism and employee wellbeing.

Investing in employee wellbeing is not just a compassionate choice; it is a smart financial decision. Businesses that take proactive steps to support health believe they see stronger performance, reduced disruption, and a workforce that feels valued and supported*.

At Howden Group, we help businesses protect their workforce and bottom line. Contact our team of experts today to explore healthcare benefits solutions that reduce sick leave, support employee wellbeing, and keep your teams performing at their best.

* Health and wellbeing at work 2025

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.