Costs of poor employee mental health soars for North West firms

A new report from accountancy firm Deloitte said the cost to companies of not properly tackling mental health problems had risen by 16% since 2017 to £45bn a year. Tony McDonough reports

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Poor mental health of employees is costing UK firms billions of pounds every year


Poor mental health among workers is costing UK employers up to £45bn a year – a rise of 16% with firms in Merseyside and the North West paying out an average of £1,491 per employee per year.

A new report from accountancy firm Deloitte said the cost to companies of not properly tackling mental health problems had risen by 16% since 2017. Among other things, it blames the ‘always on’ workplace culture driven by digital communication.

In order to calculate the costs of poor employee mental health, a range of costs were considered. They included absence from work, presenteesim (pressure to work past normal office hours), and staff turnover and associated costs.

ROI (return on investment) figures are based on a systematic review of 125 reports about mental health interventions and calculated by the net return (benefits minus costs) divided by costs incurred by the organisation.

Deloitte’s Mental health and employers: the case for refreshing investment report revealed the effect is particularly felt among young people, with employers losing the equivalent of 8.3% of the salaries of those aged 18-29 as a result of poor mental health.

The report also found that young people were less likely to disclose mental health problems to employers and more likely to use their holiday instead of taking time off work.

It highlighted the benefits of employers supporting the mental health of its staff. On average, for every £1 spent on supporting their people’s mental health, employers get £5 back on their investment in reduced presenteeism, absenteeism and staff turnover.

A higher return on investment can also be achieved by early interventions, such as organisation-wide culture change and education, compared to more in-depth support that may be needed at a later stage when the individual is struggling.

Some companies are taking the issue seriously. In December LBN reported how Merseyside recruitment firm Tezlom was investing £50,000 to support the mental wellbeing of its staff.

Doug King, director and mental health champion at Deloitte in the North West, said: “As our ways of working evolve, so do expectations of employers about how we should support our people.

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Presenteeism, and the ‘always on’ culture, is adding to the problem, says Deloitte


“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.

“This analysis shows very clearly that it pays for employers to provide mental health support at work and that early intervention is vital, for those experiencing poor mental health and employers alike.”

Paul Farmer, chief executive of Mind, added: “Smart, forward-thinking employers are investing in staff wellbeing, and those who do tend to save money in the long run. This report shows the link between prioritising staff wellbeing and improved loyalty and productivity; and decreased sickness absence and resignations.

“However it also shows a rise in presenteeism – unwell staff spending unproductive hours at work rather than taking time off. As presenteeism costs three times more than sick leave, we need to look at supporting employers to change the culture so their staff feel able to take time off when they are unwell.”

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