The staggering cost of poor mental health management in the workplace


27th June 2019

Insight from Chris Phillips, Partner and Employment Law Specialist at Thorntons 

A leading employment lawyer has seen an increase in enquires relating to mental health in the workplace – demonstrating that employers are recognising the importance of good mental health practice. Coupled with recent statistics that poor mental health in the workplace can cost the economy billions, it can’t be ignored.

Chris Phillips, partner at Thorntons, suggests poor mental health in the workplace can cost businesses in a variety of ways but can be avoided through greater awareness, better training and effective workplace practice.

He said: “Costs can come through health related absences and higher turnover rates as well as presenteeism.  This describes the situation where people feel compelled to keep working due to financial or cultural pressures, even though they shouldn’t be at work.  As a result they are less productive, make mistakes and potentially allow their health to further deteriorate to something more serious.”

A government commissioned study by Stevenson and Farmer revealed the total cost to the economy annually from poor mental health in the workplace is an estimated £74-99 billion.

This is broken down as £37-52 billion due to poor productivity and disruption caused by presenteeism, £8 billion for absenteeism, £8 billion for staff turnover, £37-52 billion in lost output overall  and at least £3 billion for the NHS in picking up the pieces. The cost for employers alone was placed at between £33-43 billion per annum. 

Chris added: “If anyone was ever in doubt that having a positive and supportive attitude to mental health in the workplace was the right thing to do, the impact on the bottom line must surely remove any remaining uncertainty.

“The key message is, if you are proactive on mental health, your staff are off work less, stay with you rather than moving on and are productive while they’re at work. This means you spend less on sick pay, recruitment, management being tied up on staff issues and claims.

“You also help attract talent if you are known as having a supportive and inclusive culture.”

If a business gets it wrong then they may face discrimination, unfair dismissal and even personal injury claims from their workforce. These claims, even if they are dealt with successfully can become a significant drain on a company’s human and financial resources. 

Chris said: “Why wouldn’t you want to avoid this. Having a clear policy in place is a step forward, as is raising awareness through training and publicising your policies. Providing access to a confidential helpline or counselling is another strategy. 

“All of these elements help to positively reshape culture, create greater efficiency, achieve a healthier, happier workforce and minimise risk to the organisation. For all of these reasons there is a compelling case for encouraging positive mental health in the workplace.”

Thorntons Law

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