Cost of poor mental health to employers up 16% in three years, argues report

The cost of poor mental health to employers has risen by 16% over the past three years, research by Deloitte has found.

It has estimated that employees’ mental ill health now costs the UK economy between £42bn and £45bn a year, compared to £33bn to £42bn in 2017. The 16% rise is calculated from the mid-point between the two.

Although there have been positive changes made by employers in that time, including encouraging greater openness in discussions about mental health at work and increased support provision, Deloitte’s Mental health and employers: the case for refreshing investment report suggested that any financial benefits from these had been negated by increases in mental health-related presenteeism, absenteeism and staff turnover.

Poor mental health among younger workers in particular was having an impact on employers’ costs. The report suggested organisations lost the equivalent of 8.3% of 18-to-29-year-olds’ salaries as a result of mental health-related productivity loss – the highest proportion of salary among any age group.

Employees’ mental health had also been affected by an “always on” culture, enabled by technology and the belief that they needed to continue working instead of taking time off to look after themselves, the report claimed.

Elizabeth Hampson, Deloitte director and author of the report, said: “Understanding more about the relationship between mental health and work is in all of our interests.

“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.

“The costs of this are significant, for those with poor mental health and for UK employers, and we hope this analysis can help both.”

Paul Farmer, chief executive of the mental health charity Mind and co-author of the 2017 Farmer/Stevenson Thriving at Work review into mental ill health in the workplace, said: “Smart, forward-thinking employers are investing in staff wellbeing, and those who do tend to save money in the long run.

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“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.

“The government must also play their part by improving the definition of disability under the Equality Act, so more people with mental health problems can benefit from its rights and protections, as well as increasing the amount of Statutory Sick Pay staff receive when they’re off sick.”