Economic impact of mental well-being in the workplace

Economic impact of mental well-being in the workplace

Cristina Pérez

April 7, 2021

April 8, 2021

Looking out for employee mental and emotional well-being is not just the right thing to do, it is a clear competitive advantage. As we all know, mental health disorders are pervasive in the workplace.

60% of the employees that participate in the Mind Share Partners study reported symptoms of a mental health condition.


Consequences of mental health problems in the workplace:

  • Absenteeism: Poor health due mainly to stress and burnout that translates to frequent short periods of absence.
  • Lower work performance: Drop in productivity and poor decision-making. Lower control of work and planning management.
  • Relationships at work: More conflicts with the coworkers and less fluent communication.
  • Changes in attitude and behavior: Loss of motivation and commitment to work.

Impact of mental health in the workforce

Mckinsey’s “Mental health in the workplace: The coming revolution” reveals that mental health disorders are expensive. They create serious disease (health), increase healthcare costs, diminish productivity, and increase turnover. 

Diagnosis is crucial here and one surprisingly, a higher proportion of employees suffering from mental health problems don’t receive treatment. Mark Olfson, professor of psychiatry at Columbia University, found that 62% of people with mood disorders, 76% of people with anxiety disorders, and 81% of people with substance use disorders did not seek out or receive treatment due to high costs, coverage limitations and the social stigma associated.

The fact that the majority of people do not raise their hand, raises crucial questions for all organizations. How do we proactively identify mental health issues? How do we make sure we show up for our people and facilitate treatment

There is a study of Harvard Medical School that has shown how by being actively identifying at-risk employees and providing treatment, an organization can improve employees' mood, reduce turnover and improve their productivity around 2.6 hours of extra work per week that are worth around $1,800 per year (based on average wages) 

While the employers' cost per intervention is around $400 per treated employee. Confirming that for every $1 spent on mental health, it returns $4 to the business. That is a 300% ROI.

This study proves how companies’ expenses on mental health end up representing an investment that will play off in healthier and happier employees and also in higher productivity and benefits for the company.

Cost of mental health should be seen as a safe and profitable investment.


How to overcome the mental health challenges?

All organizations have limited time and resources. In today’s world, it might be tough to hire mental health clinicians or HR managers to evaluate the employees’ well-being of your organization. 

Erudit AI empowers organizations to actively identify at-risk groups, pinpoint psychological well-being needs, and deploy their resources efficiently and effectively. Allowing organizations to make better informed and more impactful decisions. Driving business outcomes and maximizing initiative ROI.

Want to know more about it? Go check our Erudit University at www.erudit.ai/erudit-university.