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Poor mental health costs UK employers £45bn a year

Technology‑enabled, 'always‑on' workplace culture is contributing to poor mental health among UK workers. Photo: Getty

Employees’ poor mental health is costing UK employers up to £45bn ($58.8bn) each year, a rise of 16% since 2016, a new report has found.

This is largely due to mental health related “presenteeism,” where employees come to work but are unproductive due to poor mental health. This is costing businesses £29bn a year, according to the research by professional services network Deloitte.

Mental-health related absenteeism is costing employers £7bn a year, along with staff turnover costs of £9bn.

The newer trend of “leaveism,” where employees are unable to disconnect from work and feel they must work outside of their normal working hours, is also contributing to the problem. This is a sign of technology‑enabled, “always‑on” workplace culture and has been closely linked to employee burnout.

READ MORE: Employers losing £15bn a year to workers' money worries

Rising levels of debt and an increase in perceived job insecurity —with around 20% of the workforce believed to be working in ‘unsecured’ roles — have also led to an increase in stress caused by personal finance worries among UK employees.

Employers lose the most from young workers aged 18 to 29 as a result of poor mental health — an equivalent of 8.3% of their salaries, compared to a 5.8% average across all age groups. Young people are twice as likely to suffer from depression as the average worker, and are more susceptible to leaveism and financial concerns, according to the report.

Across industries, the highest annual costs of mental health are in the finance, insurance, and property industries, standing at £3,300 per employee. Public sector average costs per employee are slightly higher than private sector costs at £1,716 compared to £1,652.

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The cost of workers’ poor mental health is highest in London where businesses are losing an average of £2,277 per employee.

Levels of work‑related mental health problems, such as stress, depression, and anxiety have been rising steadily since 2015. The main causes are increased pressure and workload and lack of support, according to research by charity Business in the Community. Negative work relationships, lack of trust in managers, and the poor handling of organisational changes are other prominent factors.

But it pays for businesses to support workers’ mental health — on average, for every £1 spent on supporting people’s mental health, employers get £5 back on their investment in reduced presenteeism, absenteeism, and staff turnover, according to Deloitte’s report.

Elizabeth Hampson, Deloitte director and author of the report, said: “Understanding more about the relationship between mental health and work is in all of our interests. 

“Our research finds that, while an increased use of technology can enhance working practices, having the ability to work outside of normal working hours can add to the challenge of maintaining good mental health, and make it hard for some to disconnect from an ‘always-on’ culture.

“The costs of this are significant, for those with poor mental health and for UK employers.”

READ MORE: Three quarters of Brits say work is damaging their mental health

Paul Farmer, chief executive of mental health charity Mind, said: “Smart, forward-thinking employers are investing in staff wellbeing, and those who do tend to save money in the long run. This report shows the link between prioritising staff wellbeing and improved loyalty and productivity; and decreased sickness absence and resignations.

“However it also shows a rise in 'presenteeism' — unwell staff spending unproductive hours at work rather than taking time off. As presenteeism costs three times more than sick leave, we need to look at supporting employers to change the culture so their staff feel able to take time off when they are unwell.

“The Government must also play their part by improving the definition of disability under the Equality Act, so more people with mental health problems can benefit from its rights and protections, as well as increasing the amount of Statutory Sick Pay (SSP) staff receive when they’re off sick. Employers can access resources to help prevent poor mental health and promote wellbeing through the Mental Health at Work Commitment.”