Expert view: Employers need government support to create healthy businesses, says BCC

Employers have a vital role to play in workplace health, but government action on significant hurdles will also be required, explains Hannah Larsen, policy officer at British Chambers of Commerce (BCC).

This article is taken from REBA’s Forecasting future health costs: developing sustainable employer-funded health strategies report, in partnership with Mercer Marsh Benefits.

The UK is facing a workplace health crisis. More than nine million people are economically inactive in the UK – one-third of these as a result of long-term illness – according to Office for National Statistics figures published in 2024. This challenge is undermining growth, stifling productivity and deepening labour market skills shortages.

Growth Through People: Making Health Work, a British Chambers of Commerce 2025 research report, shows that 67% of employers cannot find the people they need, rising to 79% for manufacturing firms. Sickness absence is also a serious issue for 12% of firms. Employers want to play a greater role in the health of the workforce to address these issues, but they face barriers from rising costs to a complex support landscape.

De-risking employer action on health

One of the most pressing barriers for employers is the perceived risk of hiring individuals with long-term health conditions. Targeted financial incentives, such as a wage subsidy scheme for businesses to employ people with additional health barriers, could ‘de-risk’ recruitment for businesses and recognise that work is good for health.

The cost of accessing occupational health services remains a major barrier. Employment costs are soaring as a result of the increase in NICs, which is eroding businesses’ budgets for staff benefits such as health support.

Tax incentives that reduce cost barriers for employers, including changes to insurance premium tax (IPT), could help. The UK’s IPT rate is among the highest in Europe, acting as a significant deterrent to employers investing in health insurance products. Yet, for employers, affordable access to workplace health schemes would mean increased staff satisfaction and retention, productivity gains, and access to more diverse talent pools.

Better guidance and resources for employers

Complexity in the workplace health landscape is another major hurdle. This is especially true for SMEs, which employ 60% of the UK workforce. Smaller employers have fewer resources to explore what best-practice health and wellbeing support will look like for their business, and how to get there. They need a benchmark to aspire to and better guidance on best-practice interventions.

Businesses value peer-to-peer case studies, and government should play a more substantive role in identifying, championing and promoting employers that take action on workplace health. Government and business networks could collaborate to provide clear, actionable resources, contextualised to different industries and organisation size.

Championing employer-led solutions

As the UK strives to close the health gap, the British Chambers of Commerce and our network of 51 chambers across the UK stand ready to support employers with practical steps to boost the health of the workforce.