Any business worth its salt knows that if you want to go far, you have to recruit the best

By Margaret Hodge, Minister for Employment and Welfare Reform

Any business worth its salt knows that if you want to go far, you have to recruit the best.

But finding the most talented candidate in an already crowded labour market is one thing, getting them to stay is another entirely.

Thatís why the proposals contained in our recently released consultation paper ñ A new deal for welfare: Empowering people to work ñ have a dual purpose.

We are looking at this issue firstly from a civil rights perspective. Having a job often helps to promote an individualís health and well-being. Work does not just provide the income to lift individuals and their families out of poverty, it contributes in an important way to our self-esteem and to our feeling valued by society.

However, they will also increase the number of potential candidates available to employers and will encourage new recruits to stay in work. This can give employers a real boost to their ìbottom lineî.

The fact is you donít have to look too far to find a well of untapped talent on your doorstep.

Of the two percent of the population off sick everyday, 120,000 people a year currently move from sick pay to incapacity benefits.

The cost to the UK economy is a staggering 12 billion a year.

Yet, these are often people who could work, given the right type of support. Most have potentially manageable conditions like back pain or arthritis and, of the 2.74 million people currently claiming incapacity benefits, 90 percent say they would work with the right type of help.

Given the demands on the labour market, employers can no longer afford to ignore these individuals. Especially when many have extensive work experience and valuable qualifications.

Indeed, in the longer term, getting more people into employment is the only way we can cope with the pressures of an ageing society.

Thatís why we weíve set ourselves the goal of reducing the numbers on incapacity benefit by one million over the next decade.

To achieve that we want to improve the health of workplaces, help the sick recuperate and return to work more easily.

Weíve already made a start by making it easier for businesses who want to hire someone with a health condition or an impairment to get practical help. For example, the Access to Work initiative can fund adaptations to make the workplace more accessible.

And our Health Work and Well-being Strategy is designed to build healthier workplaces, by protecting employees and offering them the maximum opportunity to improve their own health and well-being.

By creating healthier workplaces, we will not only reduce the number of employees absent because of ill health, but also help lower insurance premiums and reduce the financial impact of sickness at work.

Weíre working closely with the Association of British Insurers and the Health and Safety Executive to reduce insurance costs to business in other ways. For example, to help insurers identify good health and safety records weíve developed a performance indicator for small and medium enterprises.

Significantly, employers who can demonstrate excellence in the area of workplace health are more likely to attract and retain high quality employees.

If you want the proof, itís worth reading the CBIís recent paper Who cares wins ñ Absence and labour turnover 2005.

It shows exactly what success can be achieved by addressing the issues. Instead of 12 days lost to absence for the worst-performing employers, those who had introduced measures like return-to-work interviews found that figure dropped to just 2.4 days a year.

So the Government has introduced a number of measures designed to support more people back to work.

Yet we want to go much further. Thatís why our consultation paper contains a number of radical reforms ñ particular the need for much earlier intervention to help people return to the workplace as quickly as possible.

The importance of this cannot be underestimated. Once a person has been on incapacity benefit for more than two years, they are more likely to die or retire than work again.

Often itís only once an individual is caught in the benefits trap that the lasting damage is done. Being out of work can lower your self-esteem, affect your confidence, lessen your independence and further affect your health and well-being.

People who claim for a physical injury can often go on to develop a mental condition as a direct results of factors that include the lack of social interaction they once enjoyed at work.

Notably, nearly four out of ten of those on incapacity benefit say poor mental health is the main health reason for their claim.

To ensure employers intervene at an earlier stage to help individuals escape the benefits trap, our consultation paper includes a number of measures:

It advises businesses how to operate effective sickness absence management programmes. For example, by encouraging employees to return to work part-time or adjusting some of their duties

It outlines our plans to help businesses manage the health conditions or disabilities of their employees

It proposes shifting the resources we currently use to compensate employers for high levels of sickness absence and investing further in additional support, particularly for small employers to manage sickness absence more effectively

And it sets out our plans to simplify statutory sick pay to reduce the burden on business.

But itís a fact that Government canít work in isolation. To ensure the future health and competitiveness of the UK economy, we need your help.

We know we donít have all the answers. Thatís why weíre keen to listen to what you have to say.

To see the consultation paper, A new deal for welfare: Empowering people to work, go to www.dwp.gov.uk/aboutus/welfarereform Or you can order a copy from: The Welfare Reform Team, Level 2, The Adelphi, 1-11 John Adam Street, London WC2, telephone 020 7712 2521.

Comments can be sent to the Welfare Reform Team at the above address or emailed to: welfarereform@dwp.gsi.gov.uk by 21 April 2006.