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Understanding Employee Mental Health and Productivity

01/04/2024 Written by: AP Employee Benefits

Employers are increasingly noticing the impact that the overall well-being of their population has on their bottom lines. Whether it be noticed through increased absence rates and turnover, reduced profits as a result of decreased productivity and innovation, or an increase in direct costs associated with claims resulting from illnesses due to mental stress and burnout. Many studies have shown a close link between mental health and employee productivity levels in the workplace. Poor mental health management throughout an employee population can be detrimental to organizational culture and morale and lead to burnout both personally and professionally.

Impact on Productivity and Turnover

Increased work-related stress levels can have a significant impact on an employee's mental health and professional productivity. When an employee continuously feels pressured in the workplace, it can lead to an increase in errored work and higher turnover rates. According to a recent Forbes article, turnover rates in professional services reached an average of 63% in 2023.

The negative impact of not taking a proactive approach when it comes to organizational mental well-being can be seen in decreased overall employee satisfaction and engagement, reduced levels of innovation and creative problem-solving, and employee communication and feedback. A recent survery from Workhuman and Gallup, shows that 44% of employees who are struggling mentally are actively looking for new job opportunities, and that number increased to 62% for those employees who considered their well-being to be suffering. These employees are far less likely to be able to adapt to new ideas and change and may present some resistance to new ideas.

Legal Considerations

Employers must also take into consideration the legal requirements that come into play when designing a workplace that supports positive employee mental health. Employers who do not take a proactive approach and supply their employees with the resources necessary when facing mental health challenges, may both reputational damage and legal consequences.

The Bottom Line

Investing in your employees' mental well-being not only cultivates a positive workplace, but it can also have an impact on the bottom line. When your employees are supported in both their personal and professional lives, they are far more likely to be more innovative and collaborative leading to increased job satisfaction and productivity levels. Engaged employees are more likely to show up engaged to work, leading to a 41% reduction in absenteeism according to a recent Gallup report.

There are additional benefits related costs associated with mental health claims that can have an impact on your bottom line. Claims resulting from additional comorbidities that surface as a result of an employee’s struggling mental health including hypertension, can begin to take their toll on an organization’s finances.

For support on identifying ways that your organization can support your employees' mental well-being, reach out to your local AssuredPartners representative.


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