Employers must do their part: How can the Government influence employers’ behaviours to tackle health-related economic inactivity?

Oriane Nermond, Research Manager, Learning and Work Institute

Date:

12 09 2025

Authors:

Tagged by:

Share:

Ahead of Sir Charlie Mayfield’s recommendations this Autumn, Oriane Nermond shares ideas on how the Government can influence employers to do more to support Disabled people and people with long-term health conditions to stay in work and find good work.

The number of people out of work due to ill health has increased over the past ten years, prompting actions from successive governments. So far, efforts have focused on reforming the benefits system and helping people find jobs.

But welfare reform and increased employment support can only succeed if the right jobs are available for Disabled people.

Employers play a crucial role in removing barriers to employment. This has been recognised by the Government, which announced an independent review into the role of employers in the Get Britain Working White paper.

What is this review and what can we expect?

The Government has asked Sir Charlie Mayfield, former chairman of the John Lewis partnership, to lead the Keep Britain Working review. The first phase of this work has already been published, and we responded to it at the time.

Recommendations are expected this Autumn, focusing on:

  • Incentives to prevent ill health at work and help employees with health conditions stay in work.
  • Interventions for employees to access effective support to face barriers at works.
  • Case management to support people with health conditions early.

Our work to inform the Health Foundation’s Commission for Healthier Working Lives set out a range of policy options to address the challenges that the review is focusing on.

A key question is how the Government can influence employers’ behaviours to do more of what works to protect people’s health – and less of what doesn’t.

What can the Government do?

Financial incentives can help employers access services or hire staff

But there is a risk of “deadweight loss’’ – where funding is used for actions employers would have taken anyway.

Existing incentives in the UK include:

  • Access to Work: Grants to help employees stay or find work. However, it faces challenges such as huge backlogs, low awareness among employers – particularly smaller ones – and a focus on physical health conditions over mental ones.
  • Subsidised employment: This encourages employers to hire people with health conditions. For example, supported internships support young people with education, health and care plans into employment.

Financial penalties are less common in the UK. In France, for example, large businesses must employ a minimum proportion of Disabled people or face financial penalties.

It’s difficult to say which financial incentives or penalties are most effective to influence employers’ behaviours – more testing and learning are required to understand what would work best in the UK.

Legislation is another policy lever

Anti-discrimination legislation is in place in the UK through the Equality Act (2010). But it has had a limited impact on the employment of Disabled people.

The upcoming changes through the Employment Rights Bill are likely to make the workplace easier to navigate for Disabled people, for example by providing improved access to flexible working. The Fair Work agency, which will be established in April 2026 and will enforce labour rights in the workplace, can also be effective if adequately resourced.

Transparency and reporting can also play a role and there have been suggestions that making the current voluntary reporting framework mandatory can have a positive impact for Disabled people.

Accreditation schemes are widely used in the UK

The Disability Confidence Employer scheme is one of the largest schemes in the UK, but faces criticisms. Disabled people do not report better experiences of the workplace or recruitment practices with accredited businesses. Changes to make it more prescriptive could yield positive outcomes for Disabled people, though the scale of the effect is hard to determine.

Information, advice and support and guidance are also important

Organisations such as ACAS or HSE publish information for employers on best practices for supporting staff with health conditions. But many employers are unaware of them, especially smaller ones, or find those too generic.

Tailored guidance by sector or business size can help make guidance more useful for employers. Many employers want to do more to support Disabled people, but they simply don’t know where to start.

Local government is often better placed to issue guidance and provide tailored information as they often have existing links with local businesses and a good understanding of the challenges they face. Local or/and regional government may be better placed to share and advise employers than central government.

Conclusion

The Government has many policy levers to influence employers to do more for Disabled people, but more evidence is needed to understand which mechanisms are the most effective. We hope to see innovative test and learn approaches recommended in the final Keep Britain Working report.

Creating more inclusive jobs will not only benefit Disabled people but will benefit everyone who face barriers to employment. The stakes are high: if the Government gets it right for Disabled people, it will help break down wider barriers to work for all.