The major costs of mental health to employers

In the private sector, poor mental health costs employers an average of £1,652 for each of their employees.

Recent large-scale reports have highlighted the significant cost of poor mental health to UK businesses and the economy as a whole [1, 2, 3]. The statistics are staggering.

Poor mental health in the workplace costs businesses up to £45 billion [1]. These costs can be attributed to a combination of absenteeism (an employee's intentional or habitual absence from work), presenteeism (working whilst sick) and staff turnover.

The newest figures show a rise in the costs to UK employers due to poor mental health

Since the last major report in 2017 [2], there has been a rise in presenteeism, where individuals choose to attend work despite poor mental health but are unproductive in the work they do. Therefore, although sickness absence has fallen, the costs of presenteeism have risen.

When considering this against the number of those currently employeed within the UK, this equates to an average cost per employee of £1,652 per year, regardless if the individual is deemed to be ill. The below figure shows how this can be broken down by industry, with some industries being more affected than others.

Finance, insurance and real estate have the largest average costs per employee

However, there is also cause for optimism and early mental health interventions in the workplace are both highly effective and therefore have a huge potential for return on investment with an average of 5:1 [1].

  • For every £1 spent on reactive mental health support, there is a £3 return to employers.

  • For every £1 spent on proactive mental health support, there is a £5 return to employers.

  • For every £1 spent on organisation wide culture and awareness raising, there is a £6 return to employers.

On the best types of interventions for return on investment [1]:

"Employers should screen individuals to provide targets and early-stage support to prevent their mental condition from worsening."

This is precisely what we aim to achieve as part of our Psynergy Mental Wellness Programme.

References [1] Monitor Deloitte. (2020). Mental health and employers: refreshing the case for investment. https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/consultancy/deloitte-uk-mental-health-and-employers.pdf [2] Monitor Deloitte. (2017). Mental health and employers: the case for investment. https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/public-sector/deloitte-uk-mental-health-employers-monitor-deloitte-oct-2017.pdf [3] OECD Health Policy Studies (2018). Making mental health count. The social and economic costs of neglecting mental health care. https://www.oecd-ilibrary.org/docserver/9789264208445-en.pdf