Businesses can struggle if any of their employees are off work for an extended time with an illness or injury. That’s why the value of Group Income Protection should never be underestimated, both for employees and employers.
Group Income Protection allows the right support to be available at the most important time, and ensures businesses have the appropriate facilities, expertise and services in place to protect their most vital assets: their employees.
However, despite the crucial benefits Group Income Protection affords, its uptake by businesses has not increased for many years, and that’s a reality that industry body Group Risk Development (GRiD) is trying to change.
Through its work with the Association of British Insurers (ABI), government departments and regulators, GRiD is trying to raise awareness about the importance of Group Income Protection.
Long-Term Absence Costs SMBs £120k Per Year
The cost of long-term absence to an average SMB is estimated to be £120,000 per year, according to research by Legal & General. While this cost is inevitably split across multiple departments and processes, it is, nevertheless, an extremely high price for any business to have to shoulder.
It is, therefore, in every company’s interest to keep their employees healthy and at work as much as possible. Not only does it improve the productivity of the business, but also boosts the morale of staff.
Unfortunately, there is a misconception that Group Income Protection is expensive. This is highlighted in a recent study by GRiD, which found that the majority of organisations overestimate the cost of Group Income Protection.
GRiD says that offering Group Income Protection to an entire workforce often costs less than 1% of payroll. However, 60% of employers polled said they thought it was much higher. In fact, 9% said they thought it would cost them more than 10% of payroll.
Presenteeism is a Big Problem
Then there’s the issue of ‘presenteeism’, which is the term used when employees continue to go to work even though they are battling an illness or feeling under the weather. The fact that these individuals are totally disengaged negates their usefulness and can drive the morale of other employees down. Presenteeism is arguably as damaging as absenteeism, but it is something that Group Income Protection, with all its associated support tools, can help to address.
It can be tempting for employers to turn a blind eye to long-term absence and think that it’s something which won’t affect their business, but research shows otherwise. For example, Legal and General’s ‘Workplace Wellbeing’ report found that nearly a quarter of employees have been off work for four weeks or more due to an illness or injury in the past 12 months. A further 36% said they knew at least one person who had been.
Rather than simply dealing with the effects of long-term absence, a much more sensible approach for employers is to ensure all the relevant support tools are in place beforehand. This is something that Group Income Protection can definitely help with.
Group Income Protection is more cost effective than people may realise and can help tackle the issue of long term absence. However, there are benefits embedded within the policies which offer support to employees and employers which are invaluable.
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