The surprising cost of mental health in the workplace

A mentally healthy workplace is good for business. Research shows it leads to less absenteeism, more-engaged workers, better productivity and morale. It reduces the chances of a company being hit with workplace disability claims and fines for breaches of health and safety laws.

"Work-related stress and poor mental health are major reasons not only for absenteeism but also for occupational disability and for workers seeking early retirement."
Leon Gettler, Freelance journalist

There is a big price tag when employers ignore and fail to manage mental health conditions in the workplace. PricewaterhouseCoopers has estimated it costs business in Australia alone a whopping $A10.9 billion a year.

Research conducted for Beyond Blue has found more than six million working days are lost per year as a result of one mental illness alone – depression - and each worker whose depression is untreated costs their employer $A9660.

The stats show people experiencing symptoms of depression can be away from work more often than those with ulcers, high blood pressure, diabetes, arthritis, back problems, lung problems or gastrointestinal disorders.

Apart from depression, the other most common mental health issues are anxiety, attention deficit hyperactivity disorder (ADHD), alcoholism, drug use disorder and bipolar disorder.

All this inevitably spills over into the workplace.

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Stress-related physical conditions such as sleeping disorders and low-resistance to infections can result in an increase in overall sickness absence. Work-related stress and poor mental health are major reasons not only for absenteeism but also for occupational disability and for workers seeking early retirement. 

A recent Harvard study examining the financial impact of 25 chronic physical and mental health problems found workers with depression reported the equivalent of 27 lost work days per year. Other research has found employees with depression are more likely than others to lose and change jobs frequently.

According to Comcare, one in five people in Australia will experience some form of mental illness, like depression, at some stage of their lives. As many of us spend at least nine hours a day at work, there has to be some spill over. 

That means the workplace can heavily influence the health of workers and therefore the community. Psychologically healthy workplaces are high functioning and productive zones.

Comcare says the workplace can trigger or worsen mental health conditions.

“Just as good work can provide a sense of social connection that promotes mental health,” it says, “poor health arising from job stress can be debilitating and isolating, but is largely preventable.”

Medibank Private estimates a total of 3.2 days per worker are lost each year through workplace stress alone. Stress-related workers’ compensation claims have doubled in recent years.


So what can businesses do to help?  The Australian Human Rights Commission outline some ideas in its report Workers with Mental Illness: a Practical Guide for Managers.

Managers can talk to the worker and offer the option of bringing a support person to the meeting. All discussions at the meeting, held at an appropriate time and place, have to be kept strictly confidential.

If the manager feels uncomfortable, they could bring in a health professional like a psychologist, social worker or occupational therapist. If the person doesn’t want to talk about it, they should ask if any they need any assistance.

Managers can also offer more flexible work arrangements or change aspects of their task. They can also ensure colleagues are not overloaded with extra work.

Given the importance of dealing with the issue for workplace productivity, it should be a top priority for managers.

BeyondBlue chief executive officer Georgie Harman has noted big shift in recent years toward recognising the importance of mental health in the workplace. She has been struck by how managers and executives now seem to understand the importance of it.

She says companies leading the way are in the mining and construction industries, two sectors with a big focus on workplace safety.

“We don’t talk about it as a feel-good exercise,” Harman told BlueNotes. “It’s actually something good for business.”

Diligent managers can pick up warning signs of mental illness straight away: absenteeism, chronic lateness, fatigue, loss of motivation and increasing frequency of sick days among them.

“It means talking to [your staff] about what’s happening,” Harman says. “You are not there to diagnose, just to give support.”


Mental health in the workplace is an issue right around the world, including Asia. According to a Singaporean study in 2011, depressive disorders, alcohol abuse and obsessive compulsive disorder emerged as the top three most common disorders in the country.

Extraordinarily, the study found one in 16 people in Singapore have suffered from depression at some time in their lifetime, while alcohol abuse and obsessive compulsive disorder affected one in 29 and one in 33 people, respectively.

Silver Ribbon, a non-profit organisation in Singapore established in 2006 to combat the stigma of mental health issues, has published a guide for promoting mental health in the workplace.

The guide, put together by various mental health specialists, has a number of suggestions which include working closely with organisations to provide education, information and flexible work environments. The publication also offers guidelines on how to handle colleagues experiencing mental health issues and also a list of services.


Psychologist Louise Ryan says mental health covers a broad array of issues, some of them psychiatric and some not. Proper diagnosis is important.

“When we talk about mental health, [we can be] talking about diagnosable psychiatric disorders or people struggling with anxiety or mood problems,’’ Ryan says. “[Sufferers] may have received a diagnosis or it may not have been diagnosed.”

Diagnosed or not, these conditions have an impact at work, she says.

“They might even cause disruption in the work place,” Ryan says. “They can miss lots of days or they can start not getting along with [colleagues]. It’s not just the task that becomes difficult; it can be other aspects of work life.” 

Ryan says the problem risks being swept under the carpet if the manager isn’t up to it.

“In good workplaces there’ll be a manager who recognises it and provides support,’’ she says.  “To a manager who doesn’t understand, this employee will look they’ve stopped performing, and they’ll be called in for a performance problem.”

While mental health tends to be handled well in larger companies with employee assistance-programs, there’s still some way to go.

Ryan says small-to-medium sized businesses tend to struggle simply because they don’t have the resources.

“I think that’s one of the reasons smaller companies might find staff turning around,” she says.

Psychologist Dean Janover says all companies need to have regular mental health audits and to develop policies to deal with the issue.

“They need to have a plan in place,’’ he says. “They need to have a look at the general health of their workforce, and [ask], what are the kinds of risks impacting on their employees’ mental health?”

“They need to develop policies around how they are going to address each of those areas. They need to educate their staff and the people who manage them. They need to put the proper support processes in place, before they pick up the danger signs.”

“If they don’t have these systems in place, they might not be as well-placed to manage these kinds of mental health issues.”

Leon Gettler is a freelance journalist

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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