Financial incentives for job retention: An analytical framework applied in three countries

Peter Brouwer, TNO Dutch Center for Health Assets, Hoofddorp, The Netherlands

Abstract

Objective: This article examined remunerative incentives aimed at supporting job retention among workers who fall ill and how they are balanced among employees, employers and the public authorities in The Netherlands, Denmark and Great Britain.

Methods: An analytical framework that focused on the financial flows among all of the relevant stakeholders in cases of sickness absence was used to systematically investigate the incentives. Such flows are the key to the possible incentives involved.

Results: In all three countries, most employees initially received employer-provided sick pay at a rate of 100% of their previous wages. However, the benefit amount decreased over time and, after a certain period, the payment of benefits became the responsibility of the public authorities rather than the employer. The rate of decrease in, and the duration for which the employer was responsible for, the payment of benefits differed among countries. Thus, the actual incentives for job retention offered to employees, employers and the public authorities also differed significantly.

Conclusion: The main incentive to have an employee return to work lies with the employer in the Netherlands, with the public authorities (municipalities) in Denmark, and with the employee him/herself in Great Britain. Legal arrangements for sickness management can effectively strengthen remunerative incentives.

Authors: Joost van Genabeek, Peter Brouwer and Jan Høgelund

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