The cost of loneliness to UK employers

The research finds that loneliness experienced in the UK represents a significant cost to UK employers, both via its impacts on the health of employees and those they care for, and via its impacts on employee wellbeing and thus on productivity and staff turnover.

In the past decade, loneliness has increasingly come to be regarded as a serious issue affecting wellbeing, health, and a range of other outcomes. Loneliness is a related, but distinct concept from social isolation, focusing on how people feel about their contact with other people. Whilst many people may experience loneliness from time to time, when individuals feel lonely most, or all of the time, the implications in terms of wellbeing and health can be serious. Our focus in this study is on this form of ​‘extreme’ loneliness.

While loneliness is often discussed as an issue relating to older people, studies have shown that loneliness can and does affect people across all age groups. A conservative estimate suggests just over 1 million workers experience loneliness in the UK.

To estimate the costs of loneliness to employers, we have consulted the published academic literature which examines the relationships between loneliness and wellbeing and health outcomes, as well as studies which examine the associations between these wellbeing and health outcomes and impacts on employers. We have also used published national statistics on aspects of employment to produce the costs of these impacts.

We have brought this evidence together in a person-centred impact model quantifying the annual costs to employers of loneliness. The model takes a prevalence-based approach, looking at all cases of loneliness in the relevant populations. It comprises four key pathways:

1. The impact of loneliness on employee health outcomes and the costs of the associated sickness absence. We used evidence on the links between loneliness and depression, coronary heart disease, and stroke, and estimated the costs to employers of the proportion of sickness absence due to these conditions which could be attributed to loneliness at £20 million.
2. The impact of loneliness on the health of those who are cared for by friends or relatives in work, and the costs to employers of the associated caring activity by employees. We used evidence on the links between loneliness and depression and dementia, and on the number and costs of working carers, to estimate the costs to employers of caring activity by employees caring for people whose health conditions can be attributed to loneliness. We estimated this at £220 million.
3. The impact of loneliness on employee wellbeing, and the costs to employees of the related reduction in productivity. We used evidence on the relationship between loneliness and employee wellbeing, and on employee wellbeing and productivity, to estimate the reduction in productivity attributable to loneliness. Using data on average output per employee, we estimated this to cost business £665 million.
4. The impact of loneliness on employee wellbeing, and the costs to employers of the related increase in voluntary staff turnover. We used evidence on the relationship between loneliness and employee wellbeing, and on employee wellbeing and voluntary staff turnover to estimate the costs attributable to loneliness. Using a standard methodology to cost staff turnover, we estimated this cost at £1.62 billion.

The costs from these four pathways produce a total cost to UK employers from loneliness of £2.5 billion per year, which includes £2.1 billion to employers in the private sector.

This result represents a conservative estimate because we have chosen the most conservative assumptions in our model at all relevant decision points.

It is notable that 10% of the total costs are derived from the pathways relating to the impact of loneliness on health, compared to 90% from the pathways related to wellbeing. There are several reasons why the costs of the pathways via health are lower than those via wellbeing. First, the model was limited to looking at those health conditions with only the most robust evidence linking them to loneliness, with future research likely to shed much more light on these relationships. Second, many of the costs of health impacts are borne by the state, rather than by employers, especially for chronic conditions that can be managed with medication. And third, while substantial sickness and caring absence because of loneliness will only affect a small number of employees, the impacts of loneliness on reduced wellbeing and therefore on productivity and voluntary turnover will affect a much larger pool of people.

Our findings of substantial costs from loneliness to UK employers strongly suggest that it is in their interests to take both reactive and preventative approaches to minimise the loneliness of their employees. A key first step will be raising awareness of the issue among employers, so that they understand the business case for addressing loneliness among their employees. This could usefully be linked to the wider evidence on the impact employers can have on overall employee wellbeing, and the ways in which the workplace can act as a positive support for overall wellbeing, and employees’ levels of social support.