Low to moderate wellbeing levels cost Australian employers $12 billion every year in lost productivity

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Thursday, 11 April 2013 — Workers with low to moderate wellbeing scores can cost their employers $12 billion every year in lost productivity1.

The Work Ability Index2(WAI) found that unproductive workers are more likely to score lower in wellbeing measures and generally have lower levels of mental and physical health.

Based on the EY Australian Productivity Pulse™3 which measures Australian workers’ views about their organisation’s and their own individual productivity, the Index found more than a third of Australian workers have poor or moderate wellbeing, and identified a link between the wellbeing of workers and their capacity to be productive in the workplace.

The Work Ability Index profiles workers into four groups – excellent, good, moderate and poor - according to their wellbeing rating on a scale from seven to 49. Each of the four groups has a corresponding average productivity loss rating:

  • Poor Wellbeing (4% of the population) people who scored low on their wellbeing rating experienced a loss of almost a third of their potential productivity (27%)
  • Moderate Wellbeing (28% of the population) experience a 12% loss in productivity
  • Good Wellbeing 47% of the population) experience only a 4% loss in productivity
  • Excellent wellbeing (21% of the population) experience no productivity loss

EY People & Advisory Executive Director Louise Rolland said: “The relationship between lower wellbeing scores and productivity lends further proof to the premise that employee wellbeing is synonymous with an efficient and productive workplace.

“Individuals who are suffering from low wellbeing can lose more than a third of their productivity as a result. Obviously this represents a significant risk to the individuals themselves as well as the organisations they work for,” Ms Rolland said.

The EY Australian Productivity Pulse™ measures Australian workers’ views about their organisation’s and their own individual productivity. The Pulse profiles Australian workers into four groups from ‘highly productive’ through to ‘unproductive’, with two categories of workers above the national average of 7.28 on a 10-point scale and two below: 1.“Super Achievers” 2. “Solid Contributors” 3 “Patchy Participants” and 4. “Lost Souls”.

Ms Rolland said the two groups of workers who fall under the national productivity average –Patchy Participants and Lost Souls - were more likely to suffer from lower wellbeing scores (including taking more sick leave), as well as lower engagement and lower performance.

“Organisations have an imperative to understand the wellbeing profile of their people, as well as equip them to actively manage their wellbeing at work,” Ms Rolland said.

“Given one in three Australians leave work early due to a wellbeing issue4, there’s also a clear incentive for individuals to engage in work-based approaches to improving their wellbeing.

“For a long time health factors were the main focus of employers considering the wellbeing of their people. Today we know that wellbeing incorporates a broad range of factors such as capability, values, work factors and family and community interact with health factors.”

The findings of the Australian Work Ability Index are supported by a major study applying the Work Ability Index in the Netherlands conducted in 2010 which also found a strong correlation between low wellbeing ratings and low productivity.

Ms Rolland said employers who intervened to improve wellbeing rankings and help move people from a low rating to moderate or moderate to good could deliver significant productivity improvement across workplaces.

“Our research shows that organisations can achieve this in a two-year period with the right evidence base and a targeted plan. By profiling wellbeing, they can begin to tackle the issues directly and funnel more funds and resources into addressing the problem at hand.

“We’re seeing more and more organisations introducing a broad range of initiatives with a focus on flexibility in response to a more competitive labour market and the changing needs and expectations of their people.

“As growth of the labour force slows due to a declining working age population, keeping employees productive in the workplace for longer will be a priority,” Ms Rolland added.

Ms Rolland said effectively supporting people’s wellbeing at work not only pays productivity, cost and brand dividends to the business but also to:

  • The individual – reducing their risk of being one of the one in three Australians5 who leave work early due to a wellbeing issue, giving them the opportunity to work for longer if they choose and the likelihood of living a longer, healthier and more independent life in retirement.
  • The nation - supporting people to work for longer will make a significant contribution to the national labour supply at a time when labour growth is slowing. Healthier and more independent older age also reduces the increasing pressure of an ageing Australia on health and social services.

In response to the people challenges employers face, EY has developed WorkSpan™ a workplace productivity and wellbeing diagnostic designed to enhance employee utility and retention over the course of their working life. This can be achieved by understanding a broad range of factors that have been scientifically proven through 30 years of longitudinal study to assess wellbeing at work.

Notes to editors:
The Work Ability Index’s Measures of Work Ability

  1. Current work ability compared to lifetime best
  2. Work ability in relation to the demands of the job
  3. Number of current diseases diagnosed by a physician
  4. Estimated work impairment due to diseases
  5. Sick leave during the past year
  6. Own prognosis of work ability two years from now
  7. Mental resources

-ends-

1Based on average productivity loss measured by the WAI against relative proportion of GDP
2Finnish Institute of Occupational Health Work Ability Index
3The EY Australian Productivity Pulse™ is a six-monthly survey of more than 2,100 employees spanning seven industries and from all levels within organisations across both the private and public sectors.
4ABS Cat: 6238.0 2010/11 Retirement and Retirement Intentions Australia
5ABS Cat: 6238.0 2010/11 Retirement and Retirement Intentions Australia

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Contact details:

Katherine Rellos
EY Australia
Tel: +61 3 9288 8322 or 0411 245 099