Work related stress represents a
‘huge cost’ for worker health and productivity. The costs to Australian
business of over stressed employees from being absent from work or
under-performing at work is estimated at $12B annually. Employees with job‑related
stress and mental illness are absent from work for an average of almost 11
weeks a year.
As employers where do we focus, how much should we spend and what’s the return on investment when we allocate funds and resources to improve workplace mental health?
Declining mental health costs employers
Nearly one in six Australian employees, experience a significant level of mental ill-health in a four-week period (males 13.2%, females 16.1%) to require time off work. Due to the continuing nature of many of these conditions, the proportion of the workforce experiencing such levels of mental ill-health over a year is estimated at 18.7%. Safe Work Australia notes that mental illness accounted for 6% of all workers’ compensation claims in 2014‑15. Although the number is small, these employees had more time off work – 15.3 weeks off work compared to 5.5 weeks for all claims. Mental health claims also saw higher average claim costs – $24,500 per claim compared to $9,000 for all other claims. In 2014-15, the number of serious claims linked to mental illness was similar to that recorded in 2000-01. However, over this same period, claims linked to most other causes of injury had fallen significantly.
In 2017, it was estimated that over half a million (272,000 men and 290,000 women) NSW employees have poor mental health. Mental ill-health is most prevalent in industries with low job security and low job control, including accommodation/food services, manufacturing, retail and administrative services where nearly 20% of workers have poor mental health. The ‘frontline’ roles commonly found in these industries (with the least autonomy and security) were found to have higher rates of mental ill-health. Across all industries, the average annual cost per employee due to absenteeism is $825, which rises to $1,230 for frontline employees. Across all industries, the proportion of employees affected by presenteeism was 18.6% with an average cost of $1,680 per employee annually.
Implementing interventions to reduce mental ill-health
Prior to embarking on any intervention to improve workplace mental health there are six factors recommended:
- Commitment from senior organisational leaders and business owners – Organisational leaders and business owners must make visible, long-term commitments to improving and maintaining good mental health in their workplaces if they want to create lasting positive change.
- Employee participation – Employee participation is essential to improving mental health in the workplace. Employee input must be sought in every step, from planning through to implementation and review.
- Develop and implement policies – Policy lays the groundwork for action. It needs to be clearly articulated and flexible enough to meet the needs of the organisation or business.
- Resources necessary for success – Initiatives aimed at improving mental health in the workplace require adequate resourcing if they are to succeed.
- A sustainable approach – Initial success requires ongoing effort to be sustained permanently.
- Planning – Successful implementation will be well thought out, identifying the intended goals and objectives, including the inputs required – such as financial resources, time or additional staffing.
Which interventions provide a return on investment?
- Job Redesign, which involves interventions targeting adverse job demands, job insecurity, and job control, which together combine to produce job strain. The costs of reducing work demands, or increasing job security or job control, generally dominate the benefits generated by lower absenteeism and presenteeism. The ROI for reducing job demands remains below breakeven for a 5 or 2.5% increase in extra full-time staffing, and becomes positive only if no additional staff are added. Similarly the cost of providing permanent employment exceeds the benefits of reduced presenteeism, and actually incurs higher absenteeism as permanent employees use their leave entitlements. The ROI is around break-even when addressing job control and autonomy over workload and skill using meetings between supervisors and each employee.
- Workplace Health Promotion, which involves providing fitness or similar classes. For both small/medium and large employers, there is a positive ROI for providing a health promotion program. For SMEs, the return is $2.86 benefit for every dollar invested, while for large employers, the ROI is $4.01.
- Cognitive Behaviour Therapy, externally facilitated for up to 20 employees. There is a small, positive ROI for the CBT intervention – a return of $1.56 for every dollar invested in a small/medium firm, and $2.39 in a large employer. The benefit arises virtually exclusively through a reduction in presenteeism behaviour. The ROI figures remain positive for a higher facilitation costs; but become close to break-even for a longer course which requires two days per employee i.e. the costs of employees missing work for the training has a greater impact than the cost of the facilitator.
- Return to Work Programs, for employees after time off for a mental health illness. The ROI for RTW interventions is positive, returning $3.90 per dollar invested in a small/medium employer, and $3.74 in a large organisation.
- Manager Training, specialised training for managers to promote understanding of mental health problems among workers. ROI of nearly $10 for every dollar invested due to the employees of trained managers taking 6.45 hours less work related sick leave in the six months after the intervention.