Investing in employee mental health good for business: report


While organizational leaders may not be convinced about the return on investment of mental-health programs, the costs of the alternative — doing nothing — are great and rising, according to a new report by Deloitte.

“While average workplace absences per employee have fallen over the last decade, the proportion of days lost due to poor mental health has increased, making mental illness the fastest growing disability claim type,” it noted.

The report found, o average, mental-health issues account for 30 to 40 per cent of short-term disability claims and 30 per cent of long-term disability claims, with numbers for mental-health diagnoses climbing at a rate of 0.5 per cent to one per cent annually.

“One of the impetus for doing this research was an understanding and the realization that the business cost of poor mental health are really quite staggering,” says Sarah Chapman, director of sustainability and social impact at Deloitte Canada. “Some 30 out of 1,000 Canadian employees are missing work every week and, when we think about the economic costs related to loss of productivity, and based on other research, it adds up to about $6.3 billion annually across just Canada — and then there’s a whole bunch of other indirect economic costs.

“So when we think about things like chronic illness that’s related to mental health, those types of things indirectly are costing the economy a significant amount of money.”

The report noted the median yearly ROI for mental-health programs in the workplace was $1.62. Employers with programs in place for three or more years had a median annual ROI of $2.18.

“Based on our analysis, mental-health programs are more likely to achieve positive ROI when they support employees along the entire spectrum of mental health, from promotion of well-being to intervention and care, as well as mitigating risk factors in the workplace,” noted the report. “Programs are also more likely to see greater returns as they mature, rather than yielding immediate financial benefits.”

The report also found companies with a positive ROI are more focused on training leaders, while those that haven’t yet seen a positive ROI are focused more on investing in training employees.

A leadership training program can increase an organization’s ROI where mental-health programs are concerned, says Chapman. “Training leaders and, frankly, all employees in the organization to be able to identify when someone might be having, or coming close to a mental-health issue . . . actually empowers well-being across the organization.”

The report also identified leadership training and return-to-work programs as critical to creating a positive ROI for mental-health programs in the workplace.