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29 May 2024

Is it time for businesses to address the cost of poor employee mental health?

Is it time for businesses to address the cost of poor employee mental health?

Today’s business landscape moves faster than ever; tomorrows will move even faster. Whilst businesses must be determined to keep pace with change, they must also recognise and address the impact the spiralling speed of change has on the mental health of staff. Research just out from Deloitte reveals that the cost to employers now stands at a staggering £51 billion annually. While this represents a decline from the £55 billion reported in 2021, it remains significantly higher than pre-pandemic levels.

Presenteeism: A Silent Drain on Productivity

Presenteeism, the phenomenon where employees show up for work despite feeling unwell and/or disengaged, emerges as the largest contributor to this cost. Employers bear an annual burden of approximately £24 billion due to reduced productivity caused by mental health issues. As the workforce navigates the complexities of modern life, addressing mental wellbeing is becoming progressively more crucial.

Positive Trends and Lingering Concerns

The Deloitte study highlights some positive trends. More than half (58%) of working adults report their mental wellbeing as "good" or "excellent." Notably, younger individuals (aged 18-24) exhibit improved mental health, with nearly two-thirds (64%) expressing overall satisfaction. However, challenges persist.

Impact on Working Parents

For the first time, the research examines the impact of children's mental health on working parents. Alarmingly, 46% of surveyed parents express concern about their children's mental wellbeing. Half of these parents believe their child's struggles affect their own job performance. Employers must recognise this interplay and provide targeted support.

Burnout: A Growing Concern

The study delves into burnout, a pervasive issue affecting workplace performance. Nearly two-thirds (63%) of respondents exhibit signs of burnout, including exhaustion, detachment from their job, and declining performance. This represents a significant increase from the previous survey's 51%. Employers must address burnout to safeguard productivity, employee well-being and future recruitment costs.

The Business Case for Investment

Deloitte emphasises that investing in mental health pays dividends. Their return-on-investment analysis reveals that for every £1 spent on supporting employees' mental health, employers gain nearly £4.70 in improved productivity. Concrete evidence supports informed decisions, allowing organisations to maximise benefits and financial returns.

A Call to Action

As the "Great Resignation" reshapes the workforce, employers must prioritise mental health and well-being. Leadership must set the tone, foster awareness and reduce the stigma of mental illness. KPI Director Lily James said, “By addressing mental health proactively, businesses can mitigate costs, retain talent, and create a healthier and more productive workplace.”

“The cost of poor mental health to employers remains a largely unseen issue but also a critical one. By investing in wellbeing programs, businesses not only support their employees but also reap substantial rewards through a competitive advantage over companies that place less importance employee welfare.”

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Sources: Deloitte, OHW.