More employees are taking long-term sick leave due to a jump in stress, anxiety and depression, the EEF has found.
Almost four in ten firms saw rises in long-term absence this year according to the EEF/Westfield Health annual sickness absence report.
The increase contrasted with another year of falling short-term absences. One third of companies said levels had decreased in 2011 and firms also reported a growing number of employees taking no sickness absence at all.
The gains were down to companies taking a pro-active approach to sick leave and working closely with GPs, the EEF claimed.
However, the overall trend was a plateau in the long term downward trend in absence rates, which remained at 2.2%.
The EFF called for the widespread use of fit notes, which see GPs recommend ways in which employees can work with employers to get back to work, to bring levels down further.
Sayeed Khan, EEF chief medical advisor said: "There are now signs that the wins to reduce short-term absence are being exhausted and we need a fresh approach from government to address the more deep-rooted problems such as stress and back pain."
He added: "For its part, government must now implement the Frost/Black recommendations as a matter of urgency. In particular it must embed the fit note culture through the training of all doctors and support companies who invest in rehabilitation."
Only 3,500 GPs out of 40,000 active practitioners have been trained on using fit notes, the EEF claimed
The average working days being lost to absence is five days according to the EEF research, which surveyed over 400 companies.