In October 2024, the new Labour government introduced the ‘Make Work Pay’ initiative, designed to help more people stay in work, support workers’ productivity, and improve living standards in line with the Government’s mission to grow the economy and create new opportunities.
- Removal of Waiting Days: SSP will now be payable from the first day of sickness, eliminating the previous three-day waiting period. This will reduce the financial uncertainty for employees during periods of illness. By removing the waiting days and expanding eligibility, the government wants to ensure that more people can access financial support when they need it most.
- Eligibility Expansion: SSP will be available to all employees, including those earning below the Lower Earnings Limit. This should encourage employees to take the necessary time off to recover from illness without the fear of losing income. This is expected to lead to better health outcomes and reduce long-term sickness absences.
- Increased SSP Rate: The SSP rate will increase from £116.75 to £118.75 per week to support greater inclusivity, especially for those employees on low income who were previously excluded.
These changes may put more financial pressure on the employer by increasing employee rights, increasing labour costs, and impacting business growth. However, we hope they will also bring improved worker satisfaction and productivity which would offset these costs, benefitting the employer and the wider economy.
Employers need to prepare for the upcoming changes
Preparation is key and employers must adapt to these changes in time for April ‘25. Employers need to look at their existing sickness practices and how the business is likely to be impacted by the incoming changes. Business leaders also need to consider whether they anticipate an increase in sickness absence as a result of the changes, and if they have the right interventions to support employees return to work.
Employees also need to consider what updates to the payroll system need to be made, ensure HR policies are in line with the changes and communicate this across the business providing any training to line managers where needed. Businesses also need to evaluate potential behavioural changes that may occur in the organisation with the removal of the waiting days, meaning that sick pay will now be payable from day one of absence, and the operational impact this could have.
Reward strategies
Organisations also need to consider how this impacts their wider reward strategy. Along with understanding the financial impact and increased costs to cover the new SSP payments, consider possible behavioural changes including incidents of absence, duration of sickness absence, and days absence is taken including reasons for absence. Are productivity losses expected as a result of the changes and how does this impact the business?
Prevention is better – what steps can an organisation take to mitigate the impact of sickness absence and have a happier, healthier, and therefore more productive workforce? Employers must consider whether they are equipped to understand the root cause and contributory risk factors for employees that remain in work and those that are taking sickness absence. This can help employers understand what they need to address to reduce the occupational factors. Having an integrated health and wellbeing approach in place to support those currently at work should reduce sickness and stress and therefore prevent absence.
When it comes to having an effective reward strategy in place, understanding what is on offer, the perceived value from employees and focussing on items that give the best return is key. It is also prudent to continually check that the initiatives are still relevant. A changing workforce means that the reward strategy must be continuously evaluated to achieve the right balance of what is useful to the respective demographics, particularly when thinking about health and wellbeing.
There is no one size fits all approach to employee wellbeing and every organisation is different when it comes to employee populations, vision, values, and strategy. When it comes to sickness policies, it’s important to remember that prevention is far better than cure. Having the right tools in place to identify potential sickness causation factors early on and offering the right support to employees can make a real difference
HCML Spring Webinar
Looking Ahead – Sign up to our Spring Webinar
Join Industry Experts Discussing NHS Reform, Trump 2.0 & the War on Woke, UK Chancellor’s Spring Statement, Effective Absence Management, and More Key HR and Business Topics.
