Employee ill-health is a key factor of India’s low productivity levels

Productivity per employee, across sectors in India, is much lower than in most developed and many developing economies. (Illustration by Suneesh K.)

Last fortnight, a bout of mild flu laid me low. The physical discomfort was trivial and mostly required just some rest. But since it came in the middle of a particularly busy writing schedule, the loss of productive hours was high.

It got me thinking about the effects of ill-health and disease on productivity at a national level, in ways we normally don't consider. In the post-Covid world, we tend to think of health issues with the survivor’s bias - don't complain if you are lucky enough to be alive. So, while we are shocked when Covid numbers cross 10,000, we don't worry too much if there is a flu or a malaria or a dengue epidemic in our city.

Yet, amplified across the world, diseases, particularly preventable and treatable ones, or other episodes of physical and mental injury, add up to a huge loss of our creative and productive capabilities.

A slightly dated study by think tank Indian Council for Research on International Economic Relations (ICRIER) highlighted how higher incidence of illness among employees was costing Indian companies dearly, with some of them losing as many as 51 working days in a year due to sickness among workers. The loss to productivity and profits though not calculated was expected to be sizeable. Significantly, diseases like diarrhea, influenza, malaria and dengue were the main causes. They were followed by lifestyle diseases like cardiovascular diseases, diabetes, stroke and mental disorders.

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Research agencies are now putting specific numbers against such losses. According to a recent survey by Deloitte, just one of these issues - poor mental health among employees - costs Indian companies a combined $14 billion a year. A 2019 WHO estimate takes that even further, estimating that the economic loss due to mental health conditions between 2012 and 2030 would be around $1.03 trillion in the country.

This isn’t just an Indian phenomenon. The World Health Organization (WHO) estimates that poor mental health costs the global economy $1 trillion annually in lost productivity. In the US, the Labour Board calculated that about 7.8 million workers missed work in January 2022 because they had an illness, injury, or medical problem or appointment. Another 4.2 million who usually work full time, worked part time because of a similar issue. A significant observation was that the number of workers who are absent because they have an illness regularly spikes from December through March, coinciding with the peak of the cold and flu seasons.

We don’t have similar calculations for India yet but it would be extremely useful to look at numbers stemming, for instance, from absence from work owing to diarrhea, an eminently preventable condition. The key of course is to prevent ill-health instead of focusing entirely on remedial action which can often come at much greater cost. In December 2021, the Foxconn Technology Group plant in Tamil Nadu’s Sriperumbudur city was shut down for nearly a month after protests erupted when some of the women workers suffered food poisoning and had to be hospitalized. The one-month loss of production could have been avoided with more focus on nutrition and hygiene.

Indeed, amidst the divided opinion on India’s rise to the top of the global population rankings, what is being ignored is the neglected issue of the country’s productivity levels, something that Manish Sabharwal, vice-chairman of Teamlease, the country’s largest organized staffing company and a member of the Prime Ministers Council on Skill Development, never tires of stressing. Productivity per employees, across sectors in India, is much lower than in most developed and many developing economies.

As it is, over 70 percent of those employed in India’s non-farm economy work in construction, trade, transport and communication, hotels, restaurants and personal services, along with public administration and defence. The problem is each of these is what is called a medium-productivity service sector with the potential for increasing productivity quite limited. Since these will continue to be the largest employers in the Indian economy in the future too, ways need to be found to enhance the productivity of employees in them.

Many companies are now encouraging and facilitating healthy lifestyles for their employees. No longer is that a favour to people. Instead, it is a key business imperative.