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Poor Mental Health Costs UK Employers up to £45bn a Year

Updated: Nov 10, 2020

New research by Deloitte has found that poor mental health costs UK employers up to £45 billion each year. That's an increase of 16% since the 2016 estimate of £37 billion.

The research also explores how employers can face this challenge, finding that it pays to invest in workplace mental health initiatives. On average, for every £1 spent on supporting employees’ mental health, employers get £5 back on their investment in reduced presenteeism, absenteeism and turnover.

This research builds on the 2017 Stevenson-Farmer Review on workplace mental health. Since that report, there have been many positive changes in workplaces, including greater awareness and openness (particularly in larger employers) and increased provision of support overall. However, changes in work practices have maintained the challenge of managing employee mental health.

The increasing costs detailed in the report are driven in large part by the phenomenon of ‘presenteeism’. That's where employees work despite not feeling up to it, for example, when they're not feeling mentally well. According to Deloitte, the resulting loss in productivity costs employers more than when staff take a sickness day. Mental health-related absence, burnout and staff turnover are also contributing to these rising costs.

Deloitte’s analysis paints a complex picture. The data reveals that the overall number of sick days taken per employee fell, while the amount of time lost due to mental health conditions rose. It is suggested that workers are still fearful of the consequences or prejudices they may face when talking about mental ill-health and requesting the days off that they need.

More people are continuing to work during periods of poor mental health, when they are not at their most productive, rather than taking time off. In addition, ‘leavism’, where employees use flexitime and leave entitlement to have time off when they are in fact too unwell to work, and an inability to disconnect from work due to technology, contribute to an unhealthy relationship with the workplace.

Elizabeth Hampson, Deloitte Director, said:

“Our research finds that, while an increased use of technology can enhance working practices, having the ability to work outside of normal working hours can add to the challenge of maintaining good mental health, and make it hard for some to disconnect from an ‘always-on’ culture.”

Forward-thinking employers should invest in staff wellbeing, as they tend to save money in the long run. By changing workplace culture so employees feel able to switch off from work and take time off if they are unwell, the cost of poor mental health can be reduced.

Paul Farmer, Chief Executive of Mind, said:

“This report shows the link between prioritising staff wellbeing and improved loyalty and productivity; and decreased sickness absence and resignations”.

Employers looking to make positive commitments to employee mental health can find support and resources through the online Mental Health at Work Gateway. Embrace Performance also provides structured support in developing workplace wellbeing plans, delivering training and leading on culture change. Get in touch today to find out how.

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