Poor mental health costs Welsh employers £1,557 a year per employee

Poor mental health costs Welsh employers £1,557 a year per employee

New analysis by Deloitte finds that poor mental health costs employers in Wales £1,557 per worker each year and nationally, across UK employers as a whole, up to £45 billion each year. This is a rise of 16% since 2016 – an extra £6 billion a year.

For employers in Wales, the research reveals that the annual cost of a worker leaving their job for mental health reasons is £212 per employee.

The research also looks at how employers can take steps to negate the costs and finds that it pays to support employees’ mental health. 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

Analysis from ‘Mental health and employers: the case for refreshing investment’ shows that higher return on employers’ investment can be achieved by early interventions, such as organisation-wide culture change and education, than more in-depth support that may be needed at a later stage when a person is struggling.

Ian Howse, a partner at Deloitte in Wales, said: “As our ways of working evolve, so do expectations of employers about how we should support our people. This analysis shows very clearly that it pays for employers to provide mental health support at work.

“Support can come in many forms. For example, I’m a mental health first aider for our people in our Cardiff office. Early intervention is vital, for those experiencing poor mental health and employers alike.

“With one in four adults in Wales¹ likely to experience mental ill health at some point in their lives, it’s something that Welsh businesses of all sizes could consider implementing for their workforce.”

Positive changes in the workplace

The latest research builds on work conducted by Deloitte in 2017 for the Stevenson-Farmer Review on workplace mental health, which calculated that poor mental health costs UK employers £33-42 billion a year.

Since then, Deloitte has found that there have been positive changes in workplaces, including greater openness in discussing mental health at work in larger employers in particular and more provision of support overall.

However, research also finds that despite this progress, costs continue to climb.

Costs driven largely by ‘presenteeism’

 The increase in costs to employers can be attributed largely to a significant rise in mental-health-related ‘presenteeism’, where employees work when they are not at their most productive.

The analysis puts the cost of presenteeism for Welsh employers at £1,067 per employee each year. Presenteeism is part of a complex picture in which people with poor mental health continue to work when they are not at their most productive, rather than take time off.

Mental-health related absenteeism also has a cost associated with it. When staff members are off work for reasons related to mental health conditions, the cost to an employer in Wales works out to be £278 per employee per year.

When comparing the costs of someone being absent due to mental health reasons and someone in the same situation continuing to work when not at full capacity, the figures indicate that presenteeism over absenteeism costs Welsh employers nearly four times as much each year.

‘Always-on’ culture impacts mental health

The analysis also highlights ‘leaveism’ as a growing trend in the workplace, where employees feel they must work outside of their standard working hours, finding themselves unable to disconnect from their work. Both leaveism and presenteeism as characteristics of an ‘always-on’ culture that’s enabled by technology, which in turn can lead to burnout.

Howse added: “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 people to switch off from an ‘always-on’ culture.

“The costs of this are significant, for those with poor mental health and for employers, and we hope this analysis can help both. Many large employers are already encouraging a greater openness in discussing mental health at work, which is a step in the right direction.”

Young people – the most vulnerable demographic in the workplace

The report also highlights recent studies which find higher prevalence of mental health problems among younger people, who emerge as the most vulnerable demographic in the workplace to poor mental health. Research show young people are less likely to disclose mental health problems to employers and more likely to use their holiday allocation for days off rather than taking sick leave.

Paul Farmer, Chief Executive of Mind, said:

“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. Employers can access resources to help prevent poor mental health and promote wellbeing through the Mental Health at Work Commitment.”