Employers: does focusing on mental health improve your bottom line?
All businesses run on the same general reality: balancing the cost of being in business and compensating the people that work the hours to conduct the business in all of its forms. Profit margins are at the mercy of core operating costs like payroll and health insurance, among many others. It’s true that without its people, no company can survive.
The total health of the workforce - that is, physical health and mental health - is paramount to the stability and resilience of the company itself. Most American adults spend up to one-third of their lives within the workplace, therefore it seems rather obvious that regardless of personal preference, whatever health needs an employee has is going to impact the job just as much as the home. We know that when an employee doesn’t feel well, whether physically, mentally or both, work is impacted. Hopefully, the health care packages are able to reasonably support the true needs of employees, and that does include a close look at mental health.
It’s likely that many companies would turn the magnifying glass towards the rising cost of health care needs, given staggering statistics that demonstrate a high prevalence of unmet mental health needs. But what some might be missing is something else entirely: the actual cost of overlooking or under-serving mental health needs. Yes, focusing on mental health can improve your bottom line. Let’s have a look.
One in five American adults - that’s 46.6 million people - experience mental health issues in a given year. And approximately 1 in 25 adults in the U.S. (11.2 million people) experiences a serious mental illness in a given year that substantially interferes with or limits one or more major life activities. The impacts on business are real; the National Alliance on Mental Illness reports that untreated mental health conditions cost the economy $200 billion in lost earnings each year through decreased work performance and productivity.
Focusing on mental health can begin to close those gaps by supporting the true needs of the workforce as part of the total picture.
Absenteeism is a natural result of unmet mental health needs in the workplace, even if your employees aren’t saying so outright. In fact, depression alone is thought to count for up to 400 million lost work days annually in the United States. Other types of mental health issues only compound that figure. Whatever the role of the employee happens to be, their absence in the workplace poses a cost to the bottom line in transferred work to other employees or supervisors. The Domino effect that happens when an absent employee’s workload and connection to profit channels is absorbed (even temporarily) by another worker means that the loss just travels across the workforce. According to Forbes, direct and indirect costs, such as additional compensation for other workers and administrative costs of managing absenteeism while still paying the wages of the absent employee, lost productivity due to fatigue of other workers and safety risks for under-trained replacements affect the bottom line. Unscheduled absenteeism costs roughly $3,600 per year for each hourly worker and $2,650 each year for salaried employees.
The World Health Organization found that depression and anxiety have a significant impact when it comes to their impact on the bottom line - the estimated cost to the global economy is US$1 Trillion per year in lost productivity. For every $1 put into scaled-up treatment for common mental disorders, there is a return of $4 in improved health and productivity. So, the return on investment for addressing mental health needs? Four times the output cost. It’s clear that any additional costs for mental health care needs are well worth the price paid.
Reduces safety risks
Workplace stress and unmet mental health needs also bear potential costs in risks to safety. When employees are properly supported, the burden of trying to cope by using other methods (such as drugs, alcohol or other unsafe practices) is reduced. Depending on the type of business, safety costs could run the gamut from equipment repairs, physical injury, or neglect that could cause costly accidents either within the company or, if public-facing, the general population. Legal consequences to unattended safety risks are extremely costly. Addressing the mental health needs of employees is highly beneficial as best practices for risk management.
The simple reality is this: mental health affects everyone and in all aspects of life, including business. Taking steps to support the true needs of employees has a positive impact on the bottom line by reducing the direct and indirect cost of neglecting it. But that’s step one. As much as an employee’s mental health can affect the workplace, the workplace can, in equal measure, have an impact all its own. A negative working environment can lead to or worsen anxiety, depression and other concerns. Maintaining a healthy work environment - complete with proper attention to the mental and physical health needs of employees - is the most important piece of the puzzle.
A healthy workplace can be described as one where workers and managers actively contribute to the working environment by promoting and protecting the health, safety and well-being of all employees. A guide from the World Economic Forum suggests that interventions should take a 3-pronged approach:
Protect mental health by reducing work–related risk factors.
Promote mental health by developing the positive aspects of work and the strengths of employees.
Address mental health problems regardless of cause.
And in the interest of further providing a healthy workplace to reduce an impact on the bottom line, The Shaw Mind Foundation provides 5 small changes that cost a minimal amount but are thought to improve an employee’s wellbeing considerably:
Enforce working hours. This can be done by limiting out-of-hours work and encouraging reduced email access outside of office hours
If possible avoid employees working in a solely isolated way. If they are working from home extensively make sure there are regular check-ins, contact and helpful communication
Set attainable deadlines and spread workloads equally and fairly across employees and teams
Provide support services and staff members who have had training in mental health and workplace stress. Make sure this support is known about
Promote healthy eating and regular exercise
Workplaces that promote mental health and support people with mental disorders are more likely to reduce absenteeism, increase productivity and benefit from associated economic gains. Responding to the reality that mental health concerns are highly prevalent in the global economy is wise - reducing the barriers to proper care and providing a healthy workplace is essential.
At reflect, we’re committed to reducing the stigmas related to mental health concerns in the workplace and recognize that the total picture includes both employee and employer. We’re passionate about being a positive impact on what we consider to be the crisis of our generation - mental health. We have partnered with businesses who want to improve their workplace practices and lower barriers to quality care from mental health professionals.
In the Bay Area? Look to reflect for the way forward. With the area’s largest self-pay network of qualified therapists, we care about addressing mental health needs by making the path to therapy much clearer. We believe that reflect can make a difference and help people live happier and healthier lives. Get matched today here.