Poor mental health cost UK employers a staggering £56 billion in 2020/21 according to Deloitte. And, with this representing a 25 per cent increase on its 2019 figures, there’s an urgent need for employers to do more to safeguard employee mental health.
Most employers are aware of their responsibilities but Emma Capper, UK wellbeing leader at Howden Employee Benefits says the nature of how they support employee mental health varies enormously. “Some are very proactive with a variety of apps, training and even onsite counsellors while others see it as just a tickbox exercise, implementing an employee assistance programme and a mental health policy as the bare minimum,” she explains. “But all the evidence points to better business outcomes for organisations that support employees’ mental health.”
Business case
For those organisations cynical about supporting employee mental health, the business benefits are certainly compelling. Vitality’s Britain’s Healthiest Workplace survey found that productivity has been dropping steadily since 2014, with organisations losing an average of 49.7 productive days per employee in 2023, at a cost of £138 billion to the UK economy.
While this lost productivity stems from all types of health issues, mental health was found to have the greatest negative impact on productivity. Those at risk of depression, fatigue and burnout lost 151 per cent, 141 per cent and 120 per cent more productive days respectively than those who didn’t report these health issues.
The problem is widespread too. The CIPD’s Health and wellbeing at work 2023 survey found that over 76 per cent of respondents reported stress-related absence in their organisation in the past year. And, with 63 per cent citing it as a concern, mental ill health was the number one cause of long-term absence.
What’s also concerning is the number of people suffering from work-related mental health issues. Simon Blake, chief executive of Mental Health First Aid (MHFA) England explains: “Around 1.8 million workers are suffering from work-related illness according to figures from the Health and Safety Executive, with half of this due to poor mental health. That’s equivalent to 900,000 people.”
Support benefits
Alongside the negative effects of doing nothing there are also positives for those looking after employee mental health. Wolfgang Seidl, partner and leader, workplace health consulting for UK and Europe at Mercer, points to research by Oxford University’s Saïd Business School, ‘Does employee happiness have an impact on productivity’, as an example.
“This found a strong correlation between employee wellbeing and performance, with happy workers 13 per cent more productive,” he explains. “Research by Business in the Community and McKinsey Health Institute ‘Prioritise people: unlock the value of a thriving workforce’ also found that looking after employee wellbeing, including their mental health, delivered a benefit of between £4,000 and £12,000 a year per employee.”
Return on investment figures also provide some encouragement to employers who may feel daunted by the scale of the problem. Deloitte’s research, ‘Mental health and employers: The case for investment – pandemic and beyond’ puts an average return of £5.30 for every £1 invested in employee wellbeing.
Supporting employee mental health could benefit business performance in other ways too. Peer review platforms such as Glassdoor make an organisation’s approach to employee wellbeing much more visible, potentially affecting recruitment and retention.
This scrutiny is going beyond potential recruits too. Seidl says two of the top credit rating agencies are currently looking at including employee wellbeing in their analysis. “Investors will be looking at human capital and wellbeing when they make investment decisions. This transparency, which we also see in the growth of ESG reporting, has made it more important to support employee mental health.”
Perfect fit
Greater visibility may mean firms are judged against their peers more frequently on the wellbeing of their employees, but there’s no one-size-fits-all approach to topping the tables. “Every business needs a strategy that fits with its culture and objectives,” says Eugene Farrell, mental health consulting lead at Axa Health. “In an ideal world, an organisation would have every programme available but this risks confusion through over-provision.”
To avoid this, and ensure an effective mental health programme, he recommends understanding the risk within the organisation before determining whether it can be resolved and how. “Many organisations will already have resources in place that could be used within a strategy,” he adds. “Often the problem is that no one knows they’re there.”
Take the ubiquitous employee assistance programme as an example. These have an impressive average return on investment of £10.85 for every £1 according to the Employee Assistance Professional Association but Capper says they’re often under-utilised. “Communications must be often and tailored to the workforce demographics,” she explains. “Also make sure there’s appropriate signposting in place so employees know where to go if they do need support.”
Employers keen to maximise the return on their mental health investment may want to be guided by Deloitte’s research. Alongside its overarching figure of £5.30 for every £1 spent, it compared the value driven by different interventions.
It found that screening programmes had the highest return, at £6.30, followed by training at £6.00, awareness raising at £5.30 and therapy the lowest at £3.10. Additionally, organisation-wide interventions such as education campaigns delivered a higher return at £5.60, than proactive interventions (£5.00) and reactive ones (£3.40).
Farrell says screening can be effective, pointing at apps such as Thrive which provide signposting to further support where necessary, but warns against taking these figures in isolation. “An organisation must always consider its culture when designing a mental health programme,” he adds. “This will determine which interventions are most effective.”
Moving the needle
For those watching the budget, the good news is that even small changes can help
to create a culture where employees feel able to reach out for support. Capper suggests adopting a preventative approach to mental health. “Educating employees about their mental wellbeing and how to improve it is hugely important but an organisation might also want to use resilience training and line manager training to give everyone the tools to prevent mental health issues,” she explains.
These types of initiatives also help to shift the culture of a workplace. Blake says a psychologically safe culture, where employees feel they have autonomy, flexibility and a sense of purpose, is essential. “Think about how stresses can be removed from work rather than simply helping employees to manage them,” he adds. “This fosters an open culture where employees feel their wellbeing is taken seriously.”
Data is the other key element for organisations looking to optimise spend on workplace mental health. Seidl recommends collecting data on everything from the current benefit spend, claims history and accident data through to absence, employee engagement and turnover. “How much data you need will depend on the size and maturity of the organisation but even a small company can monitor a few metrics,” he says, pointing to the HSE’s Management Standards as an example. “These are a simple way for a small firm to evaluate what they’re doing and the health and safety language is great in sectors such as manufacturing. This insight, alongside the organisation’s priorities and objectives, enables data-driven decisions to be made about benefit spend and optimisation.”
Whether an organisation implements a mental health programme out of a sense of paternalism, or they simply want to cut absence to make the business more profitable, there’s no shortage of multi-billion-pound reasons to take employee wellbeing seriously.
