Building a Strong Business Case for Workplace Mental Health

Addressing mental health in the workplace has never been more critical as businesses navigate an increasingly complex landscape. Unfortunately, many employers may not fully grasp the urgency, potentially leading to a tipping point where costs and risks to their workforces escalate to unsustainable levels.

Mental and physical health are intrinsically linked to occupational health and safety, forming a triad significantly affecting employee well-being and organizational productivity. A lack of robust safety measures can create a work environment that heightens anxiety and decreases morale, further perpetuating a cycle of declining health.

The critical connection between mental and physical health 

What comes first, chronic physical health issues like diabetes, stroke and hypertension or mental health challenges? The answer is nuanced and often depends on individual circumstances.

Understanding the intricate relationship between mental and physical health is vital for employers and healthcare professionals to provide effective support and intervention strategies. By considering both aspects simultaneously, employers can develop holistic approaches that promote overall health and prevent further complications in both domains.

For instance, long-term mental health conditions such as depression and anxiety can lead to unhealthy lifestyle choices like poor diet and inactivity, increasing the risk of developing serious physical health problems. Conversely, individuals struggling with chronic physical conditions may experience heightened levels of stress, which can contribute to or exacerbate mental health issues.

It becomes a vicious circle. For example, an employee with a chronic condition such as diabetes, might find it stressful and could begin to experience anxiety and helplessness. If these mental health challenges are left unaddressed, they could deteriorate the employee’s overall well-being, causing them to neglect their physical health.

The risks and costs of ignoring mental health in the workplace are growing

A recent Deloitte study predicts that from 2024 to 2040, the U.S. will spend $477 billion in avoidable and unnecessary expenses related to mental health inequities. The study infers that many chronic physical illnesses are attributed to mental health concerns.

The Mental Health Commission of Canada reported in 2013 that the estimated economic impact of mental health on the Canadian economy was $50 billion or 2.8 per cent of Canada’s 2011 gross domestic product.

After a pandemic and population growth, it is reasonable to assume this number has grown. A 2023 study from BCG estimated the direct and indirect costs of mental health to be closer to $220 billion. A 2024 Yale study estimated the direct cost of mental health in the U.S. to be $282 billion annually.

You can’t control all of the global uncertainties affecting your employees, but you can impact what is within your circle of influence. The actions you take in your workplace can have a far-reaching effect on the economy.

The  report “Thriving Workplaces: How Employers Can Improve Productivity And Change Lives,” released by the the World Economic Forum in collaboration with the McKinsey Health Institute in January, revealed that investing in holistic employee health can create an estimated $12 trillion in global economic value.

Build the business case for investing in employees’ mental health

Implementing evidence-based psychological safety programs (i.e., mental health initiatives) will help you create a healthier work environment and protect people, productivity and financial stability.

Below is a list of steps you can take to garner support for investing in and protecting employees’ mental health:

• Collect data on employee experience and risks: leverage organizational data and present credible studies to highlight the financial impact of mental health issues on performance, making the case clear and relatable.

• Highlight the ROI of mental health initiatives: Showcase case studies of companies that have benefitted from investing in mental health programs, demonstrating the potential return on investment through improved employee productivity and reduced healthcare costs. Highlight the growing global emphasis on workplace mental health, showing how progressive companies embrace this challenge and gain a competitive advantage.

• Emphasize risk management: Frame mental health as a critical aspect of organizational risk management, illustrating how neglect can lead to absenteeism, turnover and accidents, ultimately affecting the bottom line. Highlight the future costs of doing nothing today.

• Map your path to progress: Organize workshops on psychological safety and mental health literacy, and if you already have a program in place, consider an independent evaluation of your current mental health policies, procedures and resources.

• Foster a culture of continuous improvement: Recommend establishing ongoing mental health check-ins and feedback channels, creating a culture where employee well-being is assessed and addressed regularly. Promote the benefits of adopting a Plan-Do-Check-Act approach similar to a mature OHS program.

• Engage in collaborative leadership: Encourage leaders to work with mental health experts and advocacy groups to develop comprehensive, evidence-based strategies tailored to your workplace. Leaders should be empowered to play an active role in deciding where to start, what resources are needed, and how internal competencies and expertise can be improved.

Poor mental health can lead to physical ailments, increased absenteeism and higher workplace accident rates, while physical health issues often exacerbate mental stress and emotional strain. By recognizing and addressing the connection between physical and mental health and safety, organizations can foster a healthier workforce, enhance performance and reduce absenteeism and healthcare costs.

Get to know the authors – Dr. Bill Howatt