Employers urged to act to combat productivity loss through sickness

Ageing workforce contributes to increasing costs for Singapore businesses

Singapore employers need to plan ahead to combat an estimated productivity loss of SGD3.3 billion (US$2.43 billion) by 2030 due to sickness-related absence among workers, experts have warned.

This estimated deficit is 43 per cent greater than the sickness-related productivity loss in 2016, according to the Aging Workforce: Cost and Productivity Challenges of Ill Health in Singapore study, compiled by Mercer together with professional services firm Marsh & McLennan Asia Pacific Risk Center (APRC).

The issue is growing due to the increasingly ageing workforce, the report noted. And data from the Department of Singapore Statistics backed up the concern: at the end of June, the proportion of residents aged 65 years and over had increased from 8.5 per cent in 2007 to 13.0 per cent, according to government data. The Mercer study said the average medical cost per employee in Singapore was set to increase by 108 per cent to SGD1,973 (US$1,455) in 2030.

Strengthening corporate health benefits offered by companies is key to finding a solution to the problem, Singapore-based recruitment company Michael Page told People Management. These benefits need to include “regular medical check-ups, or employees need to be given greater access to medical care,”, said regional director Nilay Khandelwal. That way, any major medical problems can be detected at an early stage, which many busy professionals overlook or neglect.

Rethinking workplace redesign and return-to-work programmes can also help, said Neil Narale, Singapore business leader for Mercer Marsh Benefits. “While an ageing workforce may present challenges related to higher healthcare needs, older workers are associated with advantages such as greater firm-specific knowledge, and lower turnover rates,” Narale argued. If managed properly, age diversity at work can serve to improve productivity and reduce the need for governments to tax corporates and the next generation to support the elderly, he said.

Khandelwal said that that encouraging more flexible working arrangements was also important: “In some cases where employees cannot come to work because of a cough or cold they can operate from home for the day, which means they can at least have some productivity as opposed to none at all.”

When employees are off sick and colleagues are tasked with extra duties, it may also be useful, where possible, to have rotating contract staff with the capacity to support ad-hoc projects for a number of team members, which could help ease the workflow while still maintaining productivity, Khandelwal said.

The city state cannot afford to see productivity declining further, particularly in the wake of a recent global study which found that Singaporeans in the service sector are least productive in terms of time spent on their primary job function. “Only 60 per cent of Singaporeans spend their time on primary duties as opposed to a global average of 72 per cent,” according to The Global Productivity Study.

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