Investing in Employee Mental Health and Wellbeing

Executive Summary

The COVID-19 pandemic highlighted the prominent issue of mental health and wellness in organizations and workplaces. Mental health issues affect more than half of the workforce, and it is a considerable personal and professional challenge. Employees affected with mental health disorders have decreased productivity, absenteeism, and lead to direct and indirect costs for businesses and the economy. However, the primary issue to this is that mental health goes untreated, often due to a lack of support from employers and limited access to appropriate services to treat it. This paper stipulates that a “mental health revolution” is incoming where employees will demand that their mental health needs be met through coverage, support or otherwise. Organizations need to adapt and embrace the issue as it ultimately benefits them that their employees are healthy and satisfied. From a human resource perspective, it is increasingly beneficial to offer mental health support in various ways to prevent the extensive consequences that the issue brings while promoting wellness within the company. Investing into mental health and wellness is both a popular trend and strategic decision-making on behalf of organizations which can benefit their bottom line.


The COVID-19 pandemic and subsequent lockdowns throughout 2020 had created an unprecedented situation in the business world, where millions of employees were furloughed or forced to work remotely from home. The personal challenges of these changes on employees were tremendous and it greatly accelerated the discussion around the topic which has been gradually introduced in business and human resource circles – that is employee mental health and wellbeing. Alongside the growing national discourse on mental health, both experts and research demonstrate the need for consideration of mental health for employees as it both directly and indirectly affects their performance and outcomes within a company. In the context of the modern business which alongside COVID-19 is also influenced by globalized structures, high-stress environments, and complex multitasking – mental health is a strong priority for longevity and sustainability of workers. This paper argues that it is crucial for businesses to invest in employee mental health and general wellbeing in terms of healthcare access, appropriate working hours, available vacation and personal days, and other benefits contributing to this in order to ensure employee satisfaction and ability to perform at optimal levels over sustainable periods of time.


Mental health is a complex concept. As defined by the World Health Organization (WHO), mental health is a “state of well-being in which every individual realises his or her own potential, can cope with the normal stresses of life, can work productively and fruitfully, and is able to make a contribution to her or his community” (Galderisi et al., 2015). It encompasses emotional, social, and psychological well-being, effectively influencing how a person thinks, behaves, and feels. Therefore, when there is a disruption to mental health, either through short-term or more long-term diagnoses such as depression and anxiety, the ability to work and productivity are compromised.

Centers for Disease Control and Prevention (CDC) (2019) indicates that mental health disorders are one of the leading health concerns in the U.S., with 1 in 5 adults reporting a mental condition, while as many as 71% of adults report symptoms indicative of high stress and anxiety. Depression being the most common condition causes estimated 200 million lost workdays annually, with a cost ranging from $17-44 billion (Minor, 2021). It is a public health issue and an economic issue. A common argument is that these issues are personal problems of each employee, so the workplace has little to do with it. However, that is not the case, as most adults spend a large portion of their time at work, workplace environments and stressors have been indicated in 37% of cases as contributing to symptoms, and 61% of workers indicate productivity is affected by mental health (Agovino, 2019). At the same time, workplaces are most often the optimal setting to address the mental health crisis and create a culture of health because of the communication and command structures are already in place, with social support networks and employer incentives available to stimulate health promotion and interventions for the wellbeing of all employees (CDC, 2019).

Dangers of Declining Mental Health and Wellbeing

There are two primary areas of concern regarding declining mental health status of employees in the workplace – productivity and health loss and cost burdens. Mental health illness impairs employees physically, mentally, and emotionally as they attempt to work. Approximately 30-50% of all U.S. adults experience mental disorders at some point in their life and another 8.4% have a substance use disorder which is also a mental illness. However, 50-60% of these adults never receive the professional help necessary, and can suffer for years if not decades leading to many other complications (Goetzel et al., 2018). Productivity impacts are well-documented for mental health disorders. More workers take absence from work due to stress, depression, or anxiety than physical illness, resulting in more work loss days from mental health issues than from chronic illnesses such as diabetes or asthma. Those that are present, report approximately 70% of peak performance when depressed or anxious, with 32 incremental workdays lost to presenteeism. Workers with major responsibility or need for creativity or mental acuity may struggle to fulfill these requirements, endangering either workplace safety or major business performance (Rönnblad et al., 2019).

There are numerous direct and indirect costs associated with mental health disorders in the workplace, with total expenses ranging in the tens of billions of dollars for the economy. It is necessary to note that poor employee mental health results in higher medical costs for the employer. For example, behavioral health claims are leading to a 20% increase in mental health spending, which has grown to be twice that of the overall healthcare spending. Average annual health costs for a depressed individual can be as high as $10,836. There is also a strong link between mental health disorders and physical or chronic illnesses. There are associations of co-morbidities such as 58% of individuals with depression are likely to develop obesity, while 55% of obese individuals are likely to develop depression (Goetzel et al., 2018).

At least one-third of the mental health cost burden is associated with lost productivity such as disability, decreased performance, and unemployment. There is another hidden cost of turnover, as 9% of employees leave due to wellbeing concerns, those experiencing mental health issues being twice as likely to quit. Hiring a replacement is on average 33% of an employee’s salary, which is costly. Furthermore, negative mental health status can impact co-workers or the general workplace environment, so even those that are healthy may experience distraction or decreased productivity due to the detrimental environment (McDaid, 2011)

In addition, large-scale studies have indicated that employees who scored high risk for mental health disorders had the highest levels of medical expenditures in the years after initial assessments, even when controlling for other health factors. Researchers have identified a clear relationship between self-reported mental health and psychosocial risk factors and detrimental impacts on productivity measured via absenteeism, compensation claims, and short-term disability. Mental health issues tend to impact physical health as well, leading to poor lifestyle behaviors such as smoking, poor diet, and physical inactivity. Harmful work cultures result in higher absence rates and lower job performance (Goetzel et al., 2018).

The ‘Mental Health’ Revolution

Many experts have identified that as a result of the COVID-19 pandemic and accelerated discussions around mental health, there are significant changes in process and incoming in regards as to how businesses and organizations perceive and address mental health. Unofficially named as the “mental health revolution,” the phenomenon is associated with increased employee demands for attention to mental health and for employers to take the issue seriously. The mental health revolution is multifaceted, it addresses both the official aspects such as insurance-coverage of mental health and availability of personal days, as well as the general culture and environment in the workplace which is inclusive of mental health disorders and protects individuals (Pfeffer & Williams, 2020).

Companies are encouraged to be proactive in the wellbeing of their employees and provide the benefits to help them cope. Providing greater access to mental health resources and improving attitudes about mental health are the top priorities for businesses, particularly with younger worker generations such as millennials or generation Z have the highest prevalence of mental disorders but are also more willing to openly the discuss the issue publicly (Pfeffer & Williams, 2020). Therefore, it is a revolution which is beneficial for companies to embrace, to both maintain a positive public image and to increase employee satisfaction and motivation as means of boosting productivity and loyalty.

Solutions for Businesses

It is within an employer’s control to provide effective benefits, and if correctly applied, they not only address employee needs, but have direct connection to aspects such as turnover, productivity, and the bottom line. Primary healthcare plans are often leaving a void in coverage for mental health care, while employee assistance plans do little to address or finance current or future needs. While many employers offer wellness programs, more than half of employees are now aware that these exist. Furthermore, 60% of employees believe employers should be directly involved in worker health and wellbeing, while 72% believe insurance premiums should be lowered for those participating in employer-sponsored wellness programs (McCleary et al., 2017). To address these gaps and meet the market shift of mental health and wellness demands from employees, businesses should work closely with HR to determine weaknesses and create an appropriate benefit mix to support employees.

Workplaces that embrace positive mental health approach are characterized by 3 vital components. First, the organization recognizes that success and efficiency from a business standpoint requires a psychologically healthy workplace. Second, comprehensive strategies based in company policies are required to ensure mental health sustainability and penetration of programs at employee, workplace, and organizational levels. Finally, companies should offer prevention and treatment referral services for employees and immediate family as this both reduces the stigma against mental health as well as attempts to resolve the costly problems. However, for all this to work, it is critical that senior leadership recognizes the problem and personally gets involved in resolving and promoting mental health acceptance and inclusive work culture to provide support for those that may be struggling with mental health issues (Attridge, 2019).

Just as ignoring or pushing detrimental mental health practices has the multiple negative effects described earlier, promoting positive mental health and wellness practices provides the opportunity to not only counter those pitfalls, but actually provide net-positive benefits for the company, highlighting once again the positive ROI of investing into this. Workplace wellness programs are generally successful if implemented competently and include comprehensive mental health care as well. They can lower health risks, which brings down healthcare costs in the long run. Reduction of healthcare costs and lowering lost productivity are one of the most tangible benefits. Eliminating those 20-35% in lost productivity and absenteeism provide tremendous benefit to businesses. In fact, for many employees, the benefits of mental health and wellness support can actually improve health and well-being, pushing productivity and engagement upward. By providing a wide range of health and wellness services, increasing awareness about mental health issues, and offering support in these areas, companies can shatter the stigma, provide preventive services, and identify risk factors both for individual employees and collectively before it becomes a chronic issue for the business.

Employees struggle with mental health disorders becomes issue in the long-term because they either do not receive or do not know about the available resources to them, and due to the stigma associated with psychiatric disorders which ultimately prevents them from seeking help. There needs to be a shift in attitude by both employers and employees about mental health to address this issue comprehensively, with an understanding that in many workplaces the culture and individual employees are deep in crisis – so it will not be a quick or comfortable fix, but rather commitment and investment that pays off over time. To achieve the greatest mental health benefits for the workplace population, interventions have to be comprehensive, offering an integrated approach of medicine, public health, and psychology as they attempt to balance prevention and management. The three main pillars of this approach are to 1) protect mental health by avoiding work-related factors, 2) promoting mental health through positive awareness and worker strengths, and 3) addressing employee mental health issues regardless of cause (LaMontagne et al., 2014).

HR Recommendations

It is ultimately the responsibility of HR to guide organizations to become more transparent, flexible, and resilient in the context of the mental health revolution and meeting employee needs. While the problem is not easy to resolve, requiring a comprehensive approach, it is solvable. First, the organization needs to improve the comfort level, by making it clear that the company is accepting of mental health and implications of behavioral health, as well as optimizing operations that ensure better workflow and minimum stressors, reaching all levels of the organization. If possible, special attention should be given to employee work-life balance, a significant element that can either worsen or benefit mental health (Kotera et al., 2019). Changes should be made within the organization and its culture. Employees can benefit from various workflow shifts such as flexible scheduling, remote working, or paid time off. It is necessary that the tone and message starts at the top, beginning with executive leadership but also touching middle management and training leaders to be aware of the issue and knowing how to approach it sensitively and competently (Dean, 2018).

The next recommendation is to leverage available resources to creatively find solutions for employees. This can range from increase employee health benefits to include more mental health coverage to offering onsite health professionals with the key to increase engagement and promote self-care and mental health wellness. In addition to making changes to policy, job design, and culture, one popular approach is the use of employee assistance programs (EAP). However, as mentioned earlier, these programs often go unnoticed. It is important for employers to not offer stripped down versions, but on the opposite, to enhance them to the best extent possible from a fiscal standpoint. Some additions can include comprehensive wellness programs, expert consults, educational resources, and risk screening tools. EAPs can be a strategic partnership for health promotion professionals to advance effective workplace mental health initiatives (Attridge, 2019).

Finally, HR and top leaders should learn to care about employees on a personal level and focus on their needs just as they would on the needs of a customer. This may range from supportive comments to activities of bringing colleagues together to practicing active listening. HR should utilize a continuous feedback loop to gain insight into what is troubling employees and how the business can improve. Balancing the needs of the organization with recommended guidelines for mental health and wellness ultimately has long-term positive effects.


Mental health is undoubtedly a difficult and sensitive topic, potentially pushing away HR and leadership of businesses due to fear of liability. However, it is necessary to address as the traditional workplace culture has created an environment which has fostered various negative consequences of mental health issues among employees. There have to be bilateral conversations between employees and employers to make sure that mental health and wellness needs are met proactively and there are opportunities for companies to evolve into much more inclusive and productive workplace environments. The “mental health revolution” is an inevitability in the context of modern business and human resources, the sooner companies are prepared for it, the better outcomes there will be for all stakeholders involved.


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