Singapore productivity loss due to sickness absenteeism may reach s$3.3 billion by 2030

06 October 2017

Singapore, Singapore




  • Average medical cost per employee in Singapore to increase by 108% to S$1,973 in 2030
  • 60% of all medical claim costs attributed to 10% of claimants
  • Societal aging in Singapore is estimated to increase the prevalence of chronic diseases such as cancer and diabetes by up to 200% by 2030[1]



Mercer together with Marsh & McLennan Companies’ Asia Pacific Risk Center (APRC) announced the findings of its latest reportAging Workforce: Cost and Productivity Challenges of Ill Health in Singapore”. The report reveals that the aging workforce and medical cost inflation in Singapore are projected to drive up average medical costs per employee by 108% to S$1,973 per year in 2030, representing a mounting financial burden for employers.


The segment of Singapore employees aged over 50 is projected to increase by 55%, and to represent 40% of the workforce[2] by 2030. With an increase in demand for medical services, the aging demographic will contribute to 41% of the escalation in medical costs, as it will drive a rise in the utilization of healthcare services, which together with healthcare cost inflation, will result in a significant surge in overall costs.


“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,” said Neil Narale, Singapore Business Leader for Mercer Marsh Benefits. “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.”


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


Based on current trends, productivity loss due to sickness absenteeism per employee is projected to increase by 25% based on GNI (gross national income). With an aging workforce, at the national level this represents a cost of S$3.3 billion in 2030, a 43% increase from 2016.  The three main drivers of this are (1) the aging of the workforce, which leads to an increase in sick days, (2) a larger workforce, and (3) the GNI per capita growth rate. [Figure 1]


What is worth noting is that 60% of all medical claim costs are attributable to 10% of claimants. This highlights the value of interventions for high-risk groups, such as health and wellness programs to reduce the incidence of disease, and screening for earlier detection of disease.


“Organizations need to adapt to current demographic trends by implementing strategies to mitigate the higher costs of ill health and capitalize on the productivity of an older and potentially shrinking workforce. This includes workforce analytics to characterize productivity drivers, as well as evidence-based workplace strategies such as health initiatives, workplace redesign, and return-to-work programs,” added Narale. “While an aging 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. Accordingly, if managed properly, diversity of age at work can serve to improve productivity and reduce the need for governments to tax corporates and the next generation to support the elderly.”


“Consequently, as business leaders and governments design productivity-enhancing changes, it is important for them to consider the implications of an aging 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 organizations to capitalize and maximize the productivity of an aging and potentially shrinking workforce,” concluded Narale. 


You can view the entire report here:




Note for Editors


The Aging Workforce: Cost and Productivity Challenges of Ill Health in Singapore report is a collaborative effort, containing input from colleagues across Marsh & McLennan Companies. The analyses conducted in this report are based on a sample of the Mercer Claim Database for incurred claim year 2013-2015. The database contains longitudinal claims data of approximately 68,000 insured headcount. Data are collected from 560 parent companies of a combined total of more than 700 entities.




About Mercer


Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Mercer’s more than 22,000 employees are based in 43 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With more than 60,000 colleagues and annual revenue over $13 billion, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit Follow Mercer on Twitter @Mercer.




About Asia Pacific Risk Center


Marsh & McLennan Companies’ Asia Pacific Risk Center addresses the major threats facing industries, governments, and societies in the Asia Pacific Region and serves as the regional hub for our Global Risk Center. Our research staff in Singapore draws on the resources of Marsh, Guy Carpenter, Mercer, Oliver Wyman, and leading independent research partners around the world. We gather leaders from different sectors around critical challenges to stimulate new thinking and solutions vital to Asian markets. Our digital news service, BRINK Asia, keeps decision makers current on developing risk issues in the region.








[1] Societal Aging’s Threat to Healthcare Insurance


[2] Singapore Department of Statistics