Poor Mental Health in the Workplace: The Consequences and Outcomes

Poor mental health in the workplace eventually takes its toll.

It’s estimated that untreated mental health conditions cost Australian workplaces approximately $10.9 billion a year. This includes $4.7 billion in absenteeism, $6.1 billion in presenteeism, and $146 million in compensation claims. In NZ, the direct cost of absenteeism is $1.4 billion, and it’s estimated that each employee has three times as many “presentee” days as “absentee” days. Ultimately, there’s no denying that employees’ unhealthy habits as a result of poor mental health can kill your bottom line.

Employees who are experiencing mental health issues may not show up to work, and if they do, they may not be effective. Employees may experience serious medical issues that need to be addressed — and that can lead to claims for compensation. Overall, poor mental health can become part of company culture, leading to flagging productivity, increased injuries, and reduced efficiency throughout.

Of course, employers want their employees to be healthy — not just because of funding, but because they care. Employers do have an ethical obligation to their employees, and most employers would prefer that their employees be as happy, safe, and healthy as they can.

But today — during an indefinite period of economic uncertainty — many companies are being asked to strip down their budgets simply to survive. Careful companies are reducing their budgets to bare bones because they don’t know what the future might look like, and they don’t want to overextend themselves. During this budget-cutting, it’s easy for employee health and wellness programs to get the axe, especially if employees are working fewer hours, or working from home.

With that in mind, it’s essential to understand the relationship between ROI and mental health. Employers who decide to pull back on their mental health spending may not get the results they want or expect.

First, there’s an expectation among workers that employers should assist those experiencing depression or anxiety. Employees who feel abandoned may not work effectively or may not work at all.

75 percent of Australian employees believe that their workplaces should support someone experiencing depression and anxiety, and 64 percent believe they should have some form of support from colleagues, management, or a union. This can equally be a challenge to achieve if employees are no longer working in an office, or if employees are being called in less frequently. In NZ, 30 percent of employees have personal experience with mental illness. This is a substantial number of employees who may need their employer’s help to remain active and whole.

67 percent of employees and 68 percent of leaders agree that workplace mental health is a shared responsibility — a relatively equal number. And that means that employees expect the leadership of their organization to work with them to protect their mental health.

Fundamentally, an employee’s belief that their employer has an ethical obligation to support their mental health is stronger than their belief that they have a legal obligation to support their mental health. Only 61 percent of employees believe that employers have legal responsibilities, while 75 percent believe workplaces have an ethical obligation. This expectation forms the basis of how employees approach their employers in terms of their mental health, and how morale, respect, and trust can suffer when mental health is sidelined.

One in five Australians (21 percent) have taken time off from work because they felt stressed, anxious, or depressed; these are employees who would have been present at work if they weren’t experiencing mental health difficulties. This statistic is almost twice as high (46 percent) among those who consider their workplaces mentally unhealthy. All this impacts the company’s productivity, and can indirectly affect the bottom line. Similarly, New Zealand has also experienced increased stress and anxiety, costing the New Zealand economy $1.79B in 2018 due to absenteeism.

Though an organization may be able to cut back on its mental health initiatives, this will ultimately cost them in terms of employee morale, the quality of their output, and consequently, employee productivity. And when the economic situation rebounds, these employees may be the first to look to leave.

Employees who believe their workplace is mentally unhealthy are unlikely to disclose to their employers that they are experiencing a mental health condition. They are also unlikely to seek support from HR/management or even to offer support to a colleague with a mental health condition. Ultimately, this leads to issues that are allowed to fester. Employees with low morale will take more time off, will be less active and proactive when they are present, and may ultimately walk away from the job entirely. So, an employer hoping to save money by cutting back on mental health could actually be costing themselves money.

But that doesn’t mean that mental healthcare for employees has to be expensive. Just as employers invest in their infrastructure proactively to avoid expensive issues down the line, employers can invest in mental health to avoid bigger problems. The easiest way for employers to manage both their budget and their healthcare programs is to become creative about the ways in which they’re providing mental health support.

What challenges does it tackle?

Reducing onsite accidents

These cost Australian businesses $61.2B a year.

Reducing onsite accidents

These cost Australian businesses $61.2B a year.

Reducing onsite accidents

These cost Australian businesses $61.2B a year.

Reducing onsite accidents

These cost Australian businesses $61.2B a year.

How it works

Our qualified professionals coach and educate your team to recognise your body’s warning signs that signal it’s time for a physical and mental reset. Delivered onsite, your team can put theory into action within their own work environment, which increases uptake and memorability while recruiting champions from within your team helps the change become part of the culture.

We understand every workplace is unique, so we use a 4-step approach to understand exactly where we need to focus.