As companies make large investments in the mental well being of their workers, many wonder if all the spending will offer long term benefits to their firm. - By Malibu Kothari
It has been widely demonstrated across Canada that spending money on mental health services for employees can offer organizations meaningful benefits – at least in the short term. In its landmark 2019 study, The ROI in workplace mental health programs: Good for people, good for business, Deloitte was able to show that firms that invested in mental health could expect to see a positive ROI within the year. This has motivated millions of dollars in spending on mental health programming at large and small firms across the country.
However, some have argued that the dramatic improvements are partially caused by the huge difference between doing nothing at all to support employee mental health and providing a bare minimum of services. Of course any such “up from zero” investments will look good! The larger question for many firms, though – especially as costs mount – is whether these investments have the potential to truly future proof the organization against disruptions and losses due to mental health risks.
Although some have tried to dismiss mental health challenges as a trending issue, the reality for many firms is that employee output is increasingly tied to employee mental health. Further, thanks to more advanced productivity tracking and data analysis, firms in Canada have gained greater clarity on where and how mental health issues are impacting their bottom line.
Take, for example, the challenge of “presenteeism” at work. Presenteeism occurs when employees are physically present in the office (or logged in online) but not actually performing the duties of their role as expected. In the past, such behavior was hard to track and still harder for organizations to address, especially as compared to more visible situations like chronic absenteeism. Now, firms have the tools to know that presenteeism is a problem – and indeed, may be more of a problem than absenteeism itself.
Presenteeism, along with more traditional absenteeism, has been linked to mental health challenges, especially the more chronic and less fully debilitating forms. A worker with persistent depression, for example, may feel well enough to turn up for work, but not well enough to contribute to the team. And, studies have shown that workers with such mental health challenges can create costs that are five to ten times higher than those created by employees who are simply absent.
That’s a considerable financial burden – and one that has been growing in Canada for some time. Indeed, according to OHS Canada, rising trends in short term disability claims for mental health issues were a challenge before the pandemic era, and they’ve positively exploded since. Workers feel increasingly stressed, scattered, and anxious, leading to increases in mistakes, safety incidents, call-outs, and disability claims.
At WestJet, for example, things had gotten so intense that the company felt the need to create a targeted intervention program for mental health. The aim of the program was to help employees cope with their anxieties and stresses – and also to reduce the number of workers calling out so that the airline could minimize service interruptions due to staffing issues. Without such an intervention, the company worried about costs, yes, but also its ability to continue to be a competitive force in Canada. Such is the seriousness of the situation for firms these days!
Evaluating today’s risks against
tomorrow’s potential problems
Knowing the high stakes – costs, lost productivity, and even the risk of being unable to continue smooth operations – firms need to frame today’s risks against tomorrow’s potential problems. This includes potential challenges with retaining employees, maintaining operations, and of course, continuing to attract and hire the best talent in the marketplace. Can sufficient mental health investments now actually protect the firm against these risks, providing a layer of effective future proofing?
Early evidence suggests that the answer may be yes. Consider the talent recruitment picture. Given Canada’s skilled labor shortages, younger workers entering the marketplace and in-demand talents changing jobs have become quite choosy about their employers. They actively look for firms that have the best benefits programming available, which includes formalized Employee Assistance Programs (EAPs) and support for mental health issues. This makes investments in these items a means of future proofing against future talent shortfalls.
Of course, it’s not just about incoming hires. Existing employees are also enthusiastic proponents of mental health programming. Employees – through EAPs or financial support for counseling – are leaning on their employers more often to gain access to mental health interventions that can have them showing up for work more often and more able to be fully present. This helps with retention issues as well as with workplace safety and productivity, future proofing the bottom line as well as minimizing future turnover costs.
Finally, employers can expect that ongoing investments in mental health initiatives to help meet employees' evolving mental health needs will generate ongoing positive ROI. Deloitte’s study (and follow up pieces) noted that large Year One returns became even larger over time. Further, studies in Australia have shown that mental health investments can generate ROI levels of up to 10x the initial spend when they are supported for multiple years.
Thus, even as supporting employee mental health becomes a larger part of the overall benefits budget, firms can make these investments knowing it’s not a wasted spend. By making meaningful and ongoing investments in mental health, employers can reasonably expect to provide their firms with a “future proof” layer of protection. This layer should help the firm withstand the ongoing worldwide uncertainty by giving existing staff the support to perform at an optimal level and by signaling to prospective hires that the firm treats mental health with an appropriate level of seriousness.