Why workplace mental health matters

EDITOR’S NOTE: ‘Solving the Puzzle: How to facilitate psychological safety at work’ is a monthly series published by OHS Canada and Talent Canada, in partnership with Dr. Bill Howatt of Howatt HR Consulting in Ottawa.

More employers are concerned about workplace mental health as the associated costs negatively trend upward — costing billions of dollars in lost productivity and disability claims.

When employers see this negative trend in their data, the following kinds of stats become more believable:

• Workers’ short-term disability claims due to mental health issues increased six per cent and duration by 12 per cent in 2021.
• On average, mental health issues account for 30 to 40 per cent of short-term disability (STD) claims.
• Claims for mental health supports increased 24 per cent during 2020, according to data from Canadian Life and Health Insurance Association members.
• Mental illness costs an estimated $50 billion annually in Canada, $20 billion stemming directly from workplace losses. The average cost per employee due to mental illness is approximately $1,500 per year.

How workers’ mental health impacts performance

Workers experiencing strained mental health (such as languishing — which is not a mental illness) are at increased risk due to such factors as declined performance and employee experience in the workplace.

• Mental health was a challenge before the pandemic; today, one in five employees is experiencing increased concern over mental health.
• The U.S. Centers for Disease Control suggests that strained mental health is responsible for declines in job performance and productivity, quality of engagement with assigned functions, communication with co-workers, physical capability, and daily functioning.
• Harassment and bullying at work are commonly reported problems that adversely impact mental health.
• A study by World Economic Forum and Ipsos reported that nearly half of employees working remotely feel isolated and lonely.
• Mental illness dramatically impacts employees’ capabilities. Research suggests that depression reduces a person’s cognitive performance by about 35 per cent and interferes with their ability to complete physical tasks about 20 per cent of the time.

Growing accountability beyond profit and loss statements

As more CEOs, senior leaders, and boards of directors pay attention to workers’ well-being, they realize that ignoring their stress limits is becoming too costly.

• Between 2000 and 2016, deaths from heart disease due to working long hours increased by 42 per cent, and stroke — 19 per cent.
• Globally, stress from working excessively long hours contributes to nearly 2.8 million workers’ deaths every year.
• A Harvard researcher reported in 2021 that psychological and physical problems of burned-out employees cost $125 billion to $190 billion a year in health-care spending in the U.S., not including costs of low productivity, turnover, and lost capacity of skilled workers.
• Stanford researchers suggest that five to eight per cent of annual health-care costs are associated with, and may be attributed to, how U.S. companies manage their workforces.

Fiscally responsible leaders are discovering the benefits of investing in workplace mental health to reduce workers’ risk of mental harm and promote mental health.

More organizations and boards of directors are paying increased attention to non-financial data like environmental, social and governance (ESG) reporting to evaluate their organizations’ sustainability.

A review of the Sustainability Accounting Standards Board’s A Practical Guide to Sustainability Reporting Using GRI and SASB Standards suggests a growing trend in over 52 countries of more non-financial reporting such as ESG disclosures that address workers’ health and safety.

It appears that workplace mental health is a factor in workforce stability because of increased costs of lost talent.

As a result, more attention will likely focus on the “S” (social) disclosures of what and how leadership protects and supports workers’ mental health (i.e., workplace mental health score).

Where employers can start

Understand that investing in workplace mental health programs can provide a positive ROI. One study found that investing in mental health programs resulted in a median ROI of CA$1.62.

Positive economic impact and good decisions require good data. Leaders cannot make sound financial decisions without accurate data.

Likewise, good decisions regarding mental health need good data.

Holding leaders accountable for employees’ workplace mental health requires upstream data to predict downstream risk.

Languishing employees — feel blah but do not have a mental illness — that do not find relief are at more risk of mental health concerns than flourishing employees.

Assessment tools like the Mental Fitness Index (i.e., see MFI in Psychologically Safe Workplace Award) collect evidence-based data to measure workers’ mental fitness and psychological safety.

MFI data provides employers with insight into the percentage of their employees who are flourishing.

The profile data also provides input on the effectiveness of current policies and programs and how psychologically safe workers perceive their direct managers.

Reducing workers’ risk of mental illness in the workplace begins with collecting the right kind of perception and behavioural data to facilitate a Plan – Do – Check – Act (PDCA) approach to supporting their mental health.

Dr. Bill Howatt is the Ottawa-based president of Howatt HR Consulting.

The Psychologically Safe Workplace Awards (PSWAs) are a national, evidence-based annual competition that measures the employee experience with respect to workplace mental health.