Articles

Print this page

Ageing workforce

11 January 2018 / by / no comments

Ageing workforce

Mer­cer age­ing work­force report shares that Sin­ga­pore pro­duc­tiv­ity loss due to sick­ness absen­teeism may reach S$3.3 bil­lion by 2030.

The age­ing work­force and med­ical cost infla­tion in Sin­ga­pore are pro­jected to drive up aver­age med­ical costs per employee by 108 per­cent, from S$946 in 2016 to S$1,973 per year in 2030, rep­re­sent­ing a mount­ing finan­cial bur­den for employ­ers, accord­ing to a report by Mer­cer together with Marsh & McLen­nan Com­pa­nies’ Asia Pacific Risk Cen­ter (APRC). The report included analy­sis of Mercer’s med­ical claims data­base, com­pris­ing of 560 com­pa­nies in Sin­ga­pore, includ­ing small– and medium-​sized enter­prises and multi-​national companies.

The report titled “Aging Work­force: Cost and Pro­duc­tiv­ity Chal­lenges of Ill Health in Sin­ga­pore” added that Sin­ga­pore employ­ees aged over 50 is pro­jected to increase by 55 per­cent, and to rep­re­sent 40 per­cent of the work­force by 2030. With an increase in demand for med­ical ser­vices, the age­ing demo­graphic will con­tribute to 41 per­cent of the esca­la­tion in med­ical costs, as it will drive a rise in the util­i­sa­tion of health­care ser­vices, which together with health­care cost infla­tion, will result in a sig­nif­i­cant surge in over­all costs.

Neil Nar­ale, Sin­ga­pore busi­ness leader for Mer­cer Marsh Ben­e­fits, said: “With improved man­age­ment of health con­di­tions per­mit­ting indi­vid­u­als to stay in the work­force longer, increas­ing finan­cial needs in retire­ment, as well as more flex­i­ble employ­ment options, such as work­ing from home, and on-​demand jobs in the gig econ­omy, there is a grow­ing trend for Sin­ga­pore employ­ees to post­pone their retirement.

How­ever, health risks increase with age, rang­ing from dimin­ish­ing motor and sen­sory func­tions to a greater inci­dence of chronic dis­eases, which will cre­ate chal­lenges for employ­ers,” he added.

In Sin­ga­pore, soci­etal age­ing is esti­mated to drive the preva­lence of chronic dis­eases such as can­cer and dia­betes by up to 200 per­cent by 2030, which means Sin­ga­pore will face the chal­lenges of stag­nat­ing pro­duc­tiv­ity growth through increas­ing rates of absen­teeism and presenteeism.

[cap­tion id=“attachment_9522” align=“alignright” width=“523”] Pro­jected increase in pro­duc­tiv­ity loss due to sick­ness absen­teeism in an age­ing workforce.[/caption]

Based on cur­rent trends, pro­duc­tiv­ity loss due to sick­ness absen­teeism per employee is pro­jected to increase by 25 per­cent based on GNI (gross national income). With an age­ing work­force, at the national level this rep­re­sents a cost of S$3.3 bil­lion in 2030, a 43 per­cent increase from 2016. The three main dri­vers of this are:

  • the age­ing of the work­force, which leads to an increase in sick days,
  • a larger work­force, and
  • the GNI per capita growth rate.

What is worth not­ing is that 60 per­cent of all med­ical claim costs are attrib­ut­able to 10 per­cent of claimants. This high­lights the value of inter­ven­tions for high-​risk groups, such as health and well­ness pro­grammes to reduce the inci­dence of dis­ease, and screen­ing for ear­lier detec­tion of dis­ease. The report said, “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. If man­aged appro­pri­ately, diver­sity of age at work is shown to improve productivity.”

Added Nar­ale: “Organ­i­sa­tions need to adapt to cur­rent demo­graphic trends by imple­ment­ing strate­gies to mit­i­gate the higher costs of ill health and cap­i­talise on the pro­duc­tiv­ity of an older and poten­tially shrink­ing workforce.

Con­se­quently, as busi­ness lead­ers and gov­ern­ments design productivity-​enhancing changes, it is impor­tant for them to con­sider the impli­ca­tions of an age­ing work­force in the devel­op­ment of such strate­gies. A holis­tic approach that aims to improve the over­all health of the work­force, while pre-​emptively intro­duc­ing ini­tia­tives to enhance pro­duc­tiv­ity, will enable organ­i­sa­tions to cap­i­talise and max­i­mize the pro­duc­tiv­ity of an age­ing and poten­tially shrink­ing work­force.” The report sug­gested schemes such as flex­i­ble work arrange­ments and return-​to-​work pro­grammes (these help return an injured, dis­abled or tem­porar­ily impaired worker to the work­place as soon as is med­ically feasible) to retain tal­ent and enhance pro­duc­tiv­ity in light of an age­ing workforce.



Mercer ageing workforce report shares that Singapore productivity loss due to sickness absenteeism may reach S$3.3 billion by 2030.

 

The ageing workforce and medical cost inflation in Singapore are projected to drive up average medical costs per employee by 108 percent, from S$946 in 2016 to S$1,973 per year in 2030, representing a mounting financial burden for employers, according to a report by Mercer together with Marsh & McLennan Companies’ Asia Pacific Risk Center (APRC). The report included analysis of Mercer’s medical claims database, comprising of 560 companies in Singapore, including small- and medium-sized enterprises and multi-national companies.

The report titled “Aging Workforce: Cost and Productivity Challenges of Ill Health in Singapore” added that Singapore employees aged over 50 is projected to increase by 55 percent, and to represent 40 percent of the workforce by 2030. With an increase in demand for medical services, the ageing demographic will contribute to 41 percent of the escalation in medical costs, as it will drive a rise in the utilisation of healthcare services, which together with healthcare cost inflation, will result in a significant surge in overall costs.

Neil Narale, Singapore business leader for Mercer Marsh Benefits, said: “With improved management of health conditions permitting individuals to stay in the workforce longer, increasing financial needs in retirement, as well as more flexible employment options, such as working from home, and on-demand jobs in the gig economy, there is a growing trend for Singapore employees to postpone their retirement.

“However, health risks increase with age, ranging from diminishing motor and sensory functions to a greater incidence of chronic diseases, which will create challenges for employers,” he added.

In Singapore, societal ageing is estimated to drive the prevalence of chronic diseases such as cancer and diabetes by up to 200 percent by 2030, which means Singapore will face the challenges of stagnating productivity growth through increasing rates of absenteeism and presenteeism.

Projected increase in productivity loss due to sickness absenteeism in an ageing workforce.

Based on current trends, productivity loss due to sickness absenteeism per employee is projected to increase by 25 percent based on GNI (gross national income). With an ageing workforce, at the national level this represents a cost of S$3.3 billion in 2030, a 43 percent increase from 2016. The three main drivers of this are:

  • the ageing of the workforce, which leads to an increase in sick days,
  • a larger workforce, and
  • the GNI per capita growth rate.

What is worth noting is that 60 percent of all medical claim costs are attributable to 10 percent of claimants. This highlights the value of interventions for high-risk groups, such as health and wellness programmes to reduce the incidence of disease, and screening for earlier detection of disease. The report said, “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. If managed appropriately, diversity of age at work is shown to improve productivity.”

Added Narale: “Organisations need to adapt to current demographic trends by implementing strategies to mitigate the higher costs of ill health and capitalise on the productivity of an older and potentially shrinking workforce.

“Consequently, as business leaders and governments design productivity-enhancing changes, it is important for them to consider the implications of an ageing workforce in the development of such strategies. A holistic approach that aims to improve the overall health of the workforce, while pre-emptively introducing initiatives to enhance productivity, will enable organisations to capitalise and maximize the productivity of an ageing and potentially shrinking workforce.” The report suggested schemes such as flexible work arrangements and  return-to-work programmes (these help return an injured, disabled or temporarily impaired worker to the workplace as soon as is medically feasible) to retain talent and enhance productivity in light of an ageing workforce.

 


 

email

Tags

 

0 Comments

You can be the first one to leave a comment.

Leave a Comment

 

— required *

— required *