Media releases

August 9, 2011

Presenteeism an ongoing problem for Australian businesses and the economy

New Medibank research has found that presenteeism continues to burden Australia and cost the economy $34.1 billion in 2009/10.

The research follows on from Medibank's groundbreaking 2007 study which looked at the cost of presenteeism on Australian businesses and the economy. Prepared by independent economic consultancy KPMG Econtech, the updated study reveals that presenteeism is a problem that isn't going away, so it is important that steps are taken to tackle it.

Presenteeism is defined as when employees come to work, but due to illness or medical conditions are not fully productive. The condition has a high cost, and Dr. Matthew Cullen, Medibank Health Solutions General Manager, says it urgently needs to be addressed.

"On average, 6.5 working days of productivity are lost per employee annually and the overall cost of $34.1 billion equates to a decrease in gross domestic product (GDP) by 2.7%. If we are to minimise further negative effects to businesses and the economy we need to take steps to invest in the health of staff.

"Employers have the ability to reduce presenteeism rates, thereby improving productivity and, in the long-term, generate a positive impact on their business bottom line."

Included in the costs above, the study showed that private consumption - household spending on all goods and services which accounts for 76% of total consumption in Australia - decreased by 3.3% ($22.6 billion) due to presenteeism in 2009/10.

Presenteeism is a marker of ill health and can result from any number of illnesses or health problems. The study considered twelve key medical conditions - allergies, arthritis, asthma, cancer, depression, diabetes, heart disease, hypertension, migraine and headache, respiratory disorders, skin conditions, and back, neck or spinal problems.

The report also investigated the effect of Australia's ageing working population. By 2050, the 45+ age range is projected to make up 40.2% of the workforce, compared to the current 36.7%. The results showed that while the prevalence rates of some diseases increase with age, there are others that remain flat with the rest declining. As such, the impact of the ageing of Australia's population on productivity losses from presenteeism increases over time but is muted. In line with this, the rate of presenteeism is expected to increase slightly to 2.7% by 2050.

Presenteeism is not going away. Employers need to take action to address the situation now so that they can create more positive and productive environments for their employees and, consequently, better performing, more profitable businesses.

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