Workplace mental health programs deliver healthier bottom lines

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Programs that promote good mental health at work aren’t just good for the people — they’re good for business, too.

A new analysis from Deloitte Insights, the research arm of accounting giant Deloitte, calculated the return on investment (ROI) of workplace mental health programs at various stages of maturity.

It found that for every $1 invested in workplace mental health, the median yearly return was $1.62, a figure that rises to $2.18 for programs that have been in place for three years or more.

To arrive at these findings released this week, the researchers examined 10 Canadian companies with established mental health programs or initiatives. The subjects were chosen to represent a variety of industries and locations across the country. Ultimately, data from seven were included in the calculations.

“Through our research we know that over 500,000 Canadian employees a week are unable to work due to poor mental health. The lost productivity there is enormous,” said report co-author Sarah Chapman, a director in Deloitte’s sustainability and social impact advisory practice.

We know inherently that investing in workplace mental health is good for our people, but this report tells us it’s actually good for business as well.— Sarah Chapman, Deloitte

The estimated economic cost of poor mental health in Canadian workplaces is $50 billion annually, not including an additional $6.3 billion in lost productivity, the report notes.

Although in recent years the stigma around mental illness has decreased and more companies have implemented mental wellness programs, research hadn’t yet quantified the bottom-line benefits, said Chapman, who holds a PhD in corporate social responsibility.

Sarah Chapman, who holds a PhD in corporate social responsibility, is a director in Deloitte’s sustainability and social impact advisory practice. She said the findings about workplace mental health programs showed even higher returns than expected. (Submitted by Deloitte)

“We know inherently that investing in workplace mental health is good for our people, but this report tells us it’s actually good for business as well.”

Proactive approach pays off

One of the key insights was that companies and employees are best served when employers go beyond just providing resources to treat problems when they arise, and instead invest in proactive programs that promote good mental health.

Those proactive steps could include working to reduce or eliminate major sources of stress particular to the job, or starting wellness initiatives that encourage staff to exercise or meditate. 

The report found that a good first step is to provide leadership with training on how to identify issues before they arise, said Chapman. Another was to put thoughtful return-to-work policies in place to ensure that people who have been absent for mental health reasons can successfully transition back, often by gradually building up to full-time hours.

Sevaun Palvetzian, CEO of the non-profit Civic Action, said failing to establish proactive mental health programs will cost Canadian employers good talent. (Submitted by Civic Action)

In order for businesses to know whether their investments in mental health are having a positive impact, they should use data to establish a baseline from where they can measure progress, she said.

That could involve tracking the number of short- and long-term disability claims, measuring employee participation in new mental health services, tallying the number of leaders who receive training in mental health prevention as well as conducting employee engagement surveys.

Canada has voluntary guidelines called The National Standard of Canada for Psychological Health and Safety in the Workplace, known as the Standard. It was established in 2013 by the government-mandated Mental Health Commission of Canada as a framework to help organizations promote mental wellness and prevent psychological harm at work. 

Chapman said it’s important for employers to know they don’t have to “start from scratch” because the Standard outlines a step-by-step guide based on best practices. “Nor do you need to fully adopt the Standard in its entirety all at once. It’s an iterative process, and you can make incremental improvements over time.”

The report says that only one-third of Canadian employers have a mental health strategy.

‘People aren’t just employees’

Sevaun Palvetzian, CEO of Civic Action, a non-profit organization that focuses on big urban challenges in the Greater Toronto Area, including workplace mental health, said mental illness and stress have been called “the second-hand smoke of this generation.”

“We are more stressed-out than any other generation that preceded us.” 

In addition to the tremendous price of treating mental illness when it arises, she said, failing to take the initiative on mental wellness will cost employers good talent. “Millennials as a generation are looking at mental health supports before they decide to sign on to work there.”

Companies like Starbucks, Manulife and Deloitte have increased the amount that employees and their dependents can spend on mental health, and that’s a big market differentiator in a war for talent, said Palvetzian.

Civic Action worked with experts in mental health at work to create a free online assessment tool called MindsMatter, based on the principles in the Standard.

Some things just make human sense and business sense. This is one of them.— Sevaun Palvetzian, Civic Action

Employers answer 12 questions, then receive an email with three action items for improving mental wellness at their places of business, along with resources for doing so.

“We need to appreciate that people aren’t just employees. They are also sons, mothers, sisters, children, and our mental health travels with us wherever we go, yet most of our waking hours are spent at work,” said Palvetzian.

“For us not to have our employers pay attention to this issue hits not only the workplace, but every other aspect of our life as well.”

Palvetzian she wasn’t surprised to see the Deloitte report establish a positive return on investment for mental health initiatives.

“Some things just make human sense and business sense. This is one of them.”

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