Investing in Workplace Mental Health Makes Financial Sense

Investing in workplace mental health

What are the economic benefits of investing in workplace mental health?

Thankfully, the analysts at Mental Health Australia and KPMG have crunched the numbers.

The Investing to Save Report provides tangible options to deliver additional economic and productivity gains for businesses investing in psychosocial safety in the workplace.

In this article, we distil the key takeaways:

  • 20% of Australians in any given year experience mental ill-health
  • Employees with mental ill-health are more likely to be absent from work and be less productive
  • Mental ill-health costs the economy $60 billion a year
  • Investment in workplace mental health could improve workforce participation rates by as much as 30%

Key Recommendations for Business

Three recommendations are made in the report:

  1. Support individuals to maintain the mental health and wellbeing of the workforce.
  2. Minimise emergency department presentations and hospitalisations
  3. Invest in promotion, prevention and early intervention

These recommendations contain 10 sub-recommendations, we delve into 3 that are pertinent to Australian business:

  1. Workplace mental health interventions
  2. Prevention and early intervention
  3. e-Health early interventions

Workplace Mental Health Interventions

Work with employees to improve workplace mental health and wellbeing

Almost 12 million Australians (50% of the population) are in the workforce.

Mental health issues affect business in that it interrupts the labour supply through absenteeism and productivity in terms of presenteeism (reduced work output).

Indirect costs of mental health issues create reduced labour participation. This, in turn, reduces wages, economic growth and taxation revenue, and increases consumer welfare costs.

Improved mental health and well-being can lead to better workplace outcomes; similarly, improved workplace outcomes can improve mental health and wellbeing.

  • 73% of people with workplace mental illness took five days or more off work.
  • 25% of the workforce suffer mild depression resulting in 50 hours of absenteeism per person per annum.
  • This increased to 138 hours off work for a further 8% who suffer moderate or severe depression.

A wide range of interventions have been trialled globally that businesses investing in improving psychosocial safety in the workplace should consider:

  1. Job Control – Design roles that provide employees with increased control over how, when and where they complete their work. Studies have shown that this is effective in reducing absenteeism. ROI = $1.30 for every dollar invested.
  2. CBT-Based Resilience Training – Stress management techniques to learn effective management and cope with setbacks. Studies have shown that Cognitive Behaviour Therapy (CBT) interventions are effective in reducing stress and improving wellbeing. ROI= $1.70 for every dollar invested.
  3. Mental Health Screening – Screening employees for signs of depression and referring to psychological services. This is effective in reducing lost days at work but only when post-screening procedures are in place. When identifying staff with signs of depression support mechanisms must be in place. ROI = $1.70 for every dollar invested.
  4. Manager Mental Health Training – mental health First Aid training has been shown to be effective in reducing work-related sick leave.
  5. Worksite Physical Activity – Fitness programmes, exercise and fitness coaches. Effective in improving mental health as long as the exercise is sustained. ROI= $2 for every dollar invested.
  6. PST-Based Return to Work Programmes – Sessions with a psychologist as part of a return to work programme. Effective in supporting employees return to work for both the individual and the business. ROI= $4.70 for every dollar invested.

Mental illness costs business an average $3,200 per employee per annum in absenteeism and presenteeism. This rises to $5,600 for employees with severe mental illness.

Recommended reading: SafeWork NSW (2017) Mentally Health Workplaces in NSW

Prevention and Early Intervention

Invest in prevention and early intervention, and build the evidence base for promotion

There are three types of interventions in the psychosocial safety space:

  1. Promotional Interventions – aim to increase public awareness and understanding of mental illness
  2. Preventative Interventions – aim to reduce the likelihood of mental illness by building up protective factors e.g. resilience.
  3. Early Interventions – usually targeted at individuals who are showing early signs and symptoms of mental illness and aim to mitigate the impact by building up protective factors and lowering psychosocial risks e.g. working conditions that are high-stress.

There are numerous preventative and early intervention programmes and activities available. In this study three were tested that they recommend for businesses investing in workplace mental health:

  1. Prevention – CBT for children and young people whose parents have a depressive disorder – effective in preventing depression and anxiety symptoms. Most mental health illness begin before the age of 24, so targeting young people is effective in reducing the prevalence.
  2. Early Intervention – CBT for individuals at the onset of a depressive disorder – The evidence reports that there are fewer depressive symptoms at post-intervention and follow-up for those showing early signs of depression when CBT programs are used. ROI = If 1% of long-term costs associated with mental illness were reduced the long-term ROI would be $9.10 for every dollar invested.
  3. Early Intervention – Community-based outreach for individuals at the onset of a depressive disorder is more effective than standard care and leads to improved quality of life and vocational outcomes.

Recommended reading: Developing a Mentally Healthy Workplace

e-Health Early Interventions

Use e-health as an enabler to deliver early intervention services

e-Mental health interventions deliver components of psychological therapies through teleconference/telephone, video-conference and/or internet-based apps with no one-on-one relationship with a clinician.

e-Mental health programmes can be highly effective, particularly for mild to moderate mental illnesses. They should now be considered part of the mainstream service delivery portfolio, not an add-on.

For businesses investing in workplace mental health, e-Mental health interventions remove barriers typically experienced in traditional and face-to-face interactions including:

  • Low cost
  • Fidelity of the intervention process
  • Reduction of stigma and increased privacy
  • Accessed anywhere and self-paced
  • Positive impact on symptoms of major depression, panic disorder, social phobia and general anxiety.

The report discusses the importance of e-health solutions and notes to improve organisational psychosocial safety:

  1. e-Health interventions have the potential to deliver an ROI of $1.60 for every one dollar spent.
  2. Rolling out e-health CBT could see savings to the economy of $442 million.

 There is an opportunity for Australian mental health treatment and support to genuinely embed e-mental health as a recognised service delivery mode, optimising cost effectiveness, reach and access.

e-Mental Health Solution

Tap into Safety offers e-mental health literacy training delivered online and via smart devices, anywhere, anytime on relevant workplace topics that impact mental health using fun animation, gamification and interaction.

For businesses investing in workplace mental health,  the solution helps by intervening early to support workers’ mental health better by providing relevant and interactive workplace wellbeing training and courses on psychosocial safety development.

The solution increases help-seeking by 100% as shown in the product evaluation conducted in 2017. By encouraging help-seeking early, we reduce the escalation of serious stress claims. This assists employees to tell us when they are not well or not feeling as good as they should.

Having microlearning courses that train how to develop and support the organisation’s psychosocial safety environment are an excellent resource, given the legislative requirement in Australia to actively do so.

Try a free demo.


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