15th Sep 2016

The $6 Billion Cost of Culture

Australians take their coffee very seriously. Over the last decade the coffee culture in Australia has thrived. In 2016, studies have shown that we will spend around $6 billion on our obsession. That’s a lot of dollars spent on a lot of beans!

So, I’m sure you will find it strange to be asked to “Wake up and smell the coffee!”.

What if a decision was made that all businesses in Australia would pay for the coffee from now on? Regardless of how much more it costs year on year! I’m sure it would cause a stir (pardon the pun) wouldn’t it? “We couldn’t possibly pay that.” “That’s unfair.” “Our bottom line could not handle that.”

Yet, most businesses won’t know that, collectively, they are already funding a $6 billion cost every year!

Have you heard of presenteeism? Presenteeism is where workers show up when they are unwell, are unproductive and have a tendency, consciously or unconsciously, to disrupt other workers around them. Did you know that the cost of presenteeism to Australian businesses is estimated at $6 billion? I’ll say that again. Six billion dollars. Yet we still don’t know much about it and the mental health issues that cause it.

Other effects of a mentally unhealthy workplace include poor morale and staff engagement, high staff turnover and potential penalties for breaches of work health and safety legislation. The business’s reputation is also at risk among potential clients, customers and employees. This $6 billion cost is a silent enemy to Australian businesses. When you add absenteeism into this the cost soars by a further $4.7 billion.

Whilst that is alarming in itself, it’s not the most critical issue we face. Of more importance, and urgency, is the need to support people who are affected by mental health issues.

In recent years we have seen great strides forward in response to mental health through amazing initiatives such as Beyond Blue, R U OK?, Livin, and Black Dog Institute amongst others. The raised awareness of mental health issues in organisations and in society has helped countless individuals and their loved ones to cope better.

Surely this means that Australian businesses don’t have to do anything then? Well that is always an option, especially if you want to continue paying the ever increasing financial costs off your bottom line every year.

Imagine this for a moment. You have the most generous coffee loyalty card in Australia. One that pays you back $2.30 for every $1 you spend. That sounds too good to be true, right?

Well, it may not be possible for your coffee needs but that’s the return on investment in mental health based on calculations in a recently published PwC report. It is clear that investing in mental health in your business will pay itself back over and over, and in many industries, over and over again.

In businesses that invest in mental health, employees show consistently higher engagement levels.

Research from the Australian Public Service Commission, published on 8th September 2016, shows that where engagement levels are higher, employees:

  • Rate their own performance more positively
  • Take fewer days of unscheduled absence
  • Are less likely to intend to leave in the next 12 months
  • Are more likely to display citizenship behaviours such as making suggestions to improve the work environment and how work is carried out
  • Are more willing to invest extra time and effort into ensuring work tasks are completed

So, the question becomes whether Australian businesses can really afford not to do anything?

It’s time for us all to wake up and smell the coffee.

Locked In Combat
Great Minds Think Alike

One thought on “The $6 Billion Cost of Culture”

  1. Good argument, I have questioned why the focus on mental health in the work place, especially when most of the focus was on suicide prevention, i think its important but it appeared to me a narrow focus I also question what other personal matters management will start focusing on i.e. spirtuality, leisure activities, diet choices etc. has the pendulum swung too far?
    Having said that I would like to explore presenteeism (which is a great collective term ) and how mental well being programs can influence disruptive / unproductive workers.

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