The Benefits of Investment in People

The toll of mental health challenges on UK employers is profound, and although estimates vary between £51bn (Deloitte) £102 bn (AXA UK) each year. A significant portion of this—around 72%—is attributed to lost productivity, as individuals facing mental health difficulties are often unable to participate in the workforce. This issue has been further amplified by the ongoing pressures of the COVID-19 pandemic, which has exacerbated mental health struggles for many, leading to even greater economic consequences. Mental health has increasingly been recognised as a critical factor in the broader economic landscape, with businesses and policymakers increasingly focusing on mental wellbeing initiatives as a strategy to reduce these costs and improve workforce participation.

Statistics produced by the Centre for Mental Health (March '24) estimate the total economic cost at a staggering £300bn

It should be noted that the Deloitte study also revealed that

for every £1 invested by employers in mental health training initiatives, they saw a return of £5.30 in cost savings related to absenteeism, presenteeism, and employee turnover.

The Cost
Statistics from The Centre for Mental Health, published March '24

Economic Cost
£110bn

Economic losses due to mental ill health encompass the costs to businesses from sickness absence, presenteeism, staff turnover, and unemployment among individuals experiencing mental health issues

Human Cost
£130bn

This represents the economic value attributed to the reduced quality of life and premature death experienced by individuals living with mental health challenges. It encompasses the financial impact of diminished well-being, as well as the loss of productivity and societal contributions due to early mortality among those affected by mental health issues.

Health and Care Costs
£60bn

This includes both the assistance offered by public services, such as healthcare, social services, and community support programs, as well as the informal care provided by family members, friends, and other close individuals who offer emotional, physical, and practical support to those in need.

So What Is The Return On My Investment?

Investing in services related to mental health, stress awareness, and managing mental health in the workplace offers significant returns for businesses, even if you may feel that the costs are prohibitive. However, the benefits can be significant. The following points (and associated returns on your investment (ROI) should be considered:

Improved Employee Productivity and Engagement

Mental health challenges, including stress, anxiety, and burnout, can lead to reduced focus, lower motivation, and disengagement from employees. By providing training and support, businesses help employees manage their mental health, which leads to improved productivity and greater engagement in their work.
ROI: Research consistently shows that employees who feel supported and equipped to manage mental health are more productive and engaged, directly benefiting the business’s bottom line.

Reduction in Absenteeism and Presenteeism

Mental health issues are a major contributor to absenteeism (employees missing work) and presenteeism (employees being at work but not fully functioning). By offering mental health support, businesses can reduce the number of days employees take off due to mental health issues and improve the quality of work done by those who might otherwise struggle.
ROI: Addressing mental health in the workplace can lower absenteeism, which reduces the financial impact of lost productivity.

Improved Retention Rates

Employees are more likely to stay with companies that prioritise mental health and well-being. Investing in mental health initiatives can create a positive company culture, improving employee retention and reducing the costs associated with high turnover (e.g., recruitment and training).
ROI: A focus on mental health can lead to a more loyal, committed workforce, reducing turnover and the associated costs of hiring and training new employees.

Enhancing Company Reputation and Employer Brand

Companies known for taking mental health seriously are more likely to attract the best people. In today’s competitive job market, employees are increasingly seeking workplaces that recognise the importance of understanding mental health and well-being.
ROI: Positive employee experiences and a reputation as a compassionate employer can be an important tool in attracting and retaining skilled and committed employees.

Legal and Ethical Compliance

UK businesses have a legal obligation to protect their employees’ mental health under the Health and Safety at Work Act 1974 and the Equality Act 2010. Employers can be held liable for not providing reasonable accommodations or not addressing mental health issues in the workplace.
ROI: Investing in mental health support helps businesses avoid potential legal costs and liabilities arising from failure to meet health and safety obligations or discrimination claims.

Improved Workplace Morale and Culture

Mental health training can create a more open and supportive workplace culture, where employees feel comfortable discussing mental health issues without fear of stigma. A strong culture of support can increase collaboration, reduce conflict, and promote overall well-being.
ROI: A positive and inclusive work culture enhances team dynamics, which can lead to improved performance and fewer interpersonal issues that could impact business operations.

Preventive Approach to Mental Health

Preventing mental health issues before they escalate into serious conditions (e.g., anxiety, depression) is much less costly than addressing them after they affect employees significantly. Training staff to spot early signs of stress and providing resources for employees to access help early on can prevent more serious health issues.
ROI: Early intervention can prevent long-term sick leave and the potential costs associated with crisis management and treatment.

Better Work-Life Balance for Employees

Training and well-being assessments often involve creating strategies that support better work-life balance, which can significantly reduce burnout and stress. Employees who feel they have control over their work-life balance are more likely to stay satisfied and productive in their roles.
ROI: Improved work-life balance enhances employee satisfaction, leading to greater retention and fewer performance-related issues.

Enhanced Creativity and Innovation

A mentally healthy workforce is more likely to think creatively and be innovative. By fostering a supportive environment, businesses can encourage employees to bring forward new ideas, which can contribute to growth and innovation.
ROI: Creative and innovative employees contribute to new products, services, or solutions that can drive business success and differentiation in the market.

For business owners, particularly those in smaller or budget-constrained companies, it’s important to recognise that the investment in mental health support, training, and assessments is not an expense but an investment in long-term business sustainability and growth. The return on investment is realised through improved productivity, reduced absenteeism, enhanced employee retention, a positive company reputation, and legal compliance. Given the significant business impact, the value far outweighs the costs involved in providing mental health resources and initiatives.

By implementing mental health initiatives early, we believe that companies are not only creating a better workplace but also ensuring a healthier bottom line. We welcome the opportunity to discuss your unique needs and business requirements.