The Ageing and Automation Resilience Index by Mercer and Marsh & Mclennan Insights released on Wednesday (18 September) ranked Singapore as the Asian nation that is most resilient to ageing and automation.
It must be noted that all Asian countries were ranked in the bottom half of the resilience index, however. Globally, Singapore ranked 13th out of 20 countries that were assessed with a score of 14.6.
Japan placed 17th with a score of 8.9 while China was 19th with 7.4. South Korea came in last with a score of 7.1.
The top three countries that were most resilient to ageing and automation according to the index were Denmark, Australia, and Sweden.
Zeroing in on Singapore specifically, a report by Marsh & Mclennan on the cost and productivity challenges of ill health in Singapore in 2018 noted that the country faces the challenge of stagnating productivity growth and a rapidly ageing population, which present a financial burden to employers. Where public expenditure accounts for less than 50% of healthcare costs, employer-provided insurance is commonplace in the Lion City.
The report points out that employees aged over 50 will be the fastest-growing demographic between 2016 and 2030, with their number projected to increase by 55%, representing 40% of the workforce.
The Well-being of the Singapore Elderly (WiSE) study showed that 52% of Singaporeans suffer from multi-morbidity, meaning they are dealing with more than one chronic conditions. Societal ageing in Singapore is expected to drive the increase in the prevalence of non-communicable diseases like cancer and diabetes by up to 200% by 2030.
This means that the financial impact of ill health will be substantial to employers as ageing employees take more sick leave, are driven into early retirement or face premature death. Older employees end up utilising healthcare services at a significantly higher rate.
Analysis of Mercer Medical Claims data in Singapore showed that 10% of claimants represent 60% of medical claims costs for employers. The report highlights projections that the average medical cost per employee is likely to increase by 108%, from S$946 per employee in 2016 to S$1,973 in 2030.
This indicates a mounting financial burden for employers as demand for medical services increase. The ageing population accounts for 41$ of the increase in medical costs by inflation accounts for the rest.
Apart from medical claims, productivity is also greatly affected by the ill health of an ageing workforce which in turn has a significant financial impact. In Asia-Pacific (APAC), the combined economic impact of absenteeism, presenteeism, early retirement, and premature death due to ill health has been estimated at 9-12% of Singapore’s national GDP.
Loss of productivity from employees missing work due to illness is projected to be 5.6 days per employee in 2030 which, based on the national median salary, translated to a cost of S$1,812 per employee. On a national level, that’s a total productivity loss of S$3.3 billion.
The report also notes that research has found presenteeism due to ill health to cost about 2.3-2.8 times more than absenteeism. Presenteeism is when the reduced productivity of an employee while at work due to illness. Presenteeism could cost S$7.6 billion by 2030, the report highlighted.
Even with all that, the report acknowledged that while older workers do provide the advantage of greater firm-specific knowledge and lower turnover rates. Therefore, organisations will have to adapt to current trends by implementing specific strategies to mitigate the higher costs of ill health and capitalize on the productivity of an older and potentially shrinking workforce.
Strategies proposed include implementing return to work programs designed to return an injured, disabled, or temporarily impaired worker to the workplace as soon as medically feasible as well as enhancing productivity with workforce analytics and implementing workplace strategies such as health programs, redesigning the physical workplace and implementing flexible work arrangements.