UK: Mental Health And Employers: The Case For Investment

Last Updated: 14 November 2017
Article by Elizabeth Hampson and Ushma Soneji

Just over a week ago, the media was awash with news about mental health, the focus this time was on its impact on businesses of all sizes in the UK. The interest was fanned by the publication of the independent review into workplace mental health, commissioned by the Prime Minister in January 2017. Thriving at Work: The Stephenson/ Farmer review of mental health, set out what employers can do to better support all employees, including those with mental health problems to remain in and thrive through work.1 In the light of this important issue, this week we're featuring a mid-week blog, by Liz Hampson and Ushma Soneji - who supported the independent review over the past six months. Their specific task was to develop the case for investment that underpins the review's recommendations. Their report, Mental health and employers: The case for investment, provides detailed insight into the cost to employers of failing to address and support mental wellbeing in the workplace.2 Deloitte's report was published alongside the review, and attracted wide media attention.

Mental health and employers: The case for investment

The 'Thriving at work' review estimated that 300,000 people with long-term mental health problems lose their jobs each year. The reviewers called for all employers, regardless of size or industry, to adopt six 'mental health core standards' and lay down the basic foundations for an effective approach to workplace mental health. These include mental health at work plans, mental health awareness for employees, line management responsibilities, and routine monitoring of staff mental health and wellbeing. Large employers and the public sector were asked to go even further, demonstrating best practice through external reporting and designated leadership responsibility.

Other recommendations included:

  • the creation of an online health and wellbeing portal to help employers access the tools and guidance they need
  • additional support for small and medium enterprises
  • the use of digital technology as a means to support those working remotely or in the gig economy
  • changes to legislation to offer better protection for staff with mental health problems
  • measures to ensure that workplace mental health is promoted and enhanced through greater transparency and the role of regulators.

The review made a number of specific recommendations for Government to support these changes, including implementing them within the public sector, and ensuring the NHS continues to prioritise mental health services enabling individuals to access high quality treatment while maintaining employment.

Deloitte's contribution

Deloitte were asked by the reviewers to look into three specific questions:

  1. What is the current cost of poor mental health to employers?
  2. What is the return on investment to employers from mental health interventions in the workplace?
  3. What can we learn from international examples in terms of good practice?

We found that the cost to employers of poor mental health is between £33 billion and £42 billion each year. This cost is made up of absence costs of £8 billion, presenteeism (defined as attending work while ill and therefore being unable to work at your best) costs of £17 - £26 billion and turnover costs of £8 billion. In the past few years the costs of presenteeism has increased at a far higher rate than absence costs, due to fact that average days lost to absence per employee has been falling. This is partly due to an increase in perceived job insecurity and changes in the working patterns, including people working remotely. These changes in the work environment are increasing the extent of work-related mental health.

We also looked at how the costs vary across different industries. Our research found that the costs of poor mental health at work were disproportionately borne by the public sector and that the NHS had the highest cost per person at £1,724 - £2,174 per employee per year. In the private sector we found the highest per employee costs are in the finance, insurance and real estate industries (£2,017-£2,564). Indeed, our analysis indicated that the costs to businesses of all sizes and across all industries are significant.

The good news is that our analysis also showed how investing in supporting mental health at work is good for business and improves productivity. We found that the return on investment for workplace mental health actions is overwhelmingly positive. A systematic review of the evidence around workplace interventions showed a return on investment (ROI) for business of between £1.50 and £9 for every £1 invested. Thinking about an employee journey we found that earlier interventions in workplace culture and mental health awareness yielded the best returns, but that even reactive interventions, when an employee may be in significant need and may be already taking time out of the business, have a strong payback.

Shortly after the review was released, the Prime Minister confirmed that NHS England and the Civil Service, who together employ over two million employees, would abide by the recommendations of the review and that they would introduce the recommended core and enhanced standards.3 This means that employees of the NHS and the civil service will now be guaranteed tailored in-house mental health support and actions will be undertaken to build confidence and understanding in their own and colleague's mental health.

Our involvement in this work was both personally and professionally rewarding. Not only did it build on our previous work over the last few years supporting the mental health charity Mind's workplace wellbeing team it also added to the evidence base in our March 2017 report, At a tipping point? Workplace mental health and wellbeing.4 More specifically, the economic case together with the independent review, starts to address some of the main challenges that employers told us was preventing them from investing to improve workplace mental health and wellbeing – principally - the poor evidence base on ROI, a lack of collective knowledge on best practice and a focus on reactive rather than preventative policies.

We will follow with interest how the momentum in this area, which is important for employers and employees alike, continues.

Footnotes

1. https://www.gov.uk/government/publications/thriving-at-work-a-review-of-mental-health-and-employers

2. https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/public-sector/deloitte-uk-mental-health-employers-monitor-deloitte-oct-2017.pdf

3. https://www.gov.uk/government/news/millions-to-benefit-from-groundbreaking-mental-health-support

4. https://www2.deloitte.com/uk/en/pages/public-sector/articles/workplace-mental-health-and-wellbeing.html

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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