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Mental Health in the Workplace: How it affects America’s bottom line

Reacting to today’s harsh economic environment, many businesses have tried to reduce costs by scaling back employee benefits. Believing that’s the wrong road to go down, a growing number of employers are deciding to instead invest more in their workforce. James Hackett, Chairman, President and CEO of Ocean Energy, one of the largest U.S. oil and gas production companies knows that if you need people to be more productive, you need to support them. He, along with leaders at two other Houston-based companies, decided to provide their employees with mental health benefits equal to their physical health benefits. According to Hackett, “Each of us estimated that any increase in cost would be minor and more than offset by avoidable costs of lost employee productivity.” Business experts agree that productivity is what it’s all about in challenging economic times. One of the biggest drains on productivity is absenteeism. The annual cost per employee from absenteeism was $789 in 2001. With one in five adults having a diagnosable mental disorder every year, depression is recognized as a major reason why people miss work. It costs U.S. businesses between $33 and $44 billion a year in missed days and poor work performance according to the National Mental Health Association.

Also consider the high cost of employee turnover. Employers pay 4.9 billion annually to replace employees who quit their jobs because of work and personal problems. This includes many people who may not want to leave their jobs but are temporarily overwhelmed by life problems.

These days, employees are being asked to work harder and, in many cases, longer hours. This stretches people and causes stress, sleeplessness, inability to concentrate and irritability. Cut back on their mental health care benefits and you could very well increase a business’s overall medical costs. It happened in Connecticut. In a study by researchers at Yale University School of Medicine, a 30 percent cost reduction in mental health benefits at a large corporation triggered a 37 percent increase in medical care use and sick leave (September/October 1999 issue of the journal Health Affairs). It’s estimated that between 45 and 98 percent of an employer’s mental health costs are actually offset by increased work productivity.

Besides being the right thing to do, helping workers with depression and other mental health problems is money well spent. Treatable more than 80 percent of the time, depression and other mental illnesses like schizophrenia have higher treatment success rates than many physical illnesses such as heart disease. Easy access to mental health services could help employees resolve their problems and stay on the job, while averting the high cost of replacing them.

What’s the message for employers?

It pays to provide mental health services employees need to stay happy, healthy and productive. It’s good for the bottom line.