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Promoting wellbeing at the office

The economic importance of promoting wellbeing at the workplace

The World Health Organization estimates that poor mental health costs the global economy US$1 trillion annually in lost productivity. “Making the work more attractive, not just financially, but also in terms of wellbeing, may be critical given the major inflationary pressures and recruitment challenges employers face”, says David McDaid from the London School of Economics and Political Science and a co-author of a report about good mental health and productivity. 

The LSE study provides evidence of the importance of taking steps to ensure  that the workplace environment helps promote better wellbeing. 

A recent McKinsey report about women in the workplace and how to keep and promote them also stressed the importance of mental health at the workplace saying successful companies are “offering a constellation of benefits to improve women’s day-to-day work experiences: flexibility, emergency childcare benefits, and mental health supports.”  

A study by consultancy Deloitte in Canada shows that positive ROI (return-on-investment) on workplace mental health initiatives is within reach. 

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The LSE study was made in Denmark and shows good mental health in the country is associated with a reduction of USD $0.9-1.3 billion per year in productivity losses to the economy. The study, made in cooperation with  University of Southern Denmark, Copenhagen University, Warwick University, University of Barcelona, and The Happiness Research Institute in Copenhagen, is published in the Mental Health and Prevention Journal. 

The study is based on data from 1,959 employees aged 16-64, who answered questions about their mental wellbeing in 2019. The answers were then linked to survey and register data pertaining to information on sickness absence from the workplace in 2020.

“As compared to poor mental health, moderate mental health is associated with five to six fewer annual sick days, while good mental health is associated with six to nine fewer annual sick days”,  says lead author Ziggi Santini from the National Institute of Public Health, University of Southern Denmark. 

The calculations showed that for each person with moderate mental health in 2019, the productivity loss was USD $1300-1600 lower the following year – when compared to the productivity loss of people with poor mental health.

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The number was even higher when it came to good mental health. For each person with good mental health in 2019, the productivity loss was USD $1800-2400 lower the following year.

Ziggi Santini explained: “When compared to the proportion of people with poor mental health in the Danish population, our results show that good mental health in the total population is associated with lower annual productivity loss amounting to a total of USD $0.9-1.3bn. Overall, our results suggest that productivity losses will be lowest when mental wellbeing is at the highest possible level. In other words, the better the mental health, the lower the loss to productivity.”

The Deloitte study of Canadian companies shows a clear positive ROI for workplace mental health programs—and suggests the way forward for companies seeking to invest in workers’ mental health:

  • Invest in proactive programs that promote positive mental health in addition to treatment—this means going beyond delivering interventions for poor mental health to also promote positive mental health and well-being
  • Prioritize investments in the highest-impact areas, such as leadership training and return-to-work programs
  • Track key performance indicators and calculate ROI to demonstrate the financial and nonfinancial benefits of mental health programs
  • Use data analytics to evaluate whether investments are having the desired impact and adoption rate, and adapt programs based on results

Mental health programs are more likely to achieve positive ROI when they support employees along the entire spectrum of mental health, from promotion of well-being to intervention and care, as well as the elimination or reduction of workplace hazards that could psychologically harm an employee”, the Deloitte report says.

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 In the study, the seven companies that provided three or more years’ worth of data achieved greater program ROI by prioritizing investments in high-impact areas such as leadership training and preventive interventions, including employee and family assistance programs and psychological care benefits.

“As the leading cause of stress for Canadian employees, workplace pressure has a tremendous impact on employees’ mental health. Because employees’ mental health is linked to both financial and nonfinancial outcomes, employers have an opportunity to reap benefits in both realms by implementing workplace mental health programs.”

“Perhaps most importantly, demonstrating a commitment to employees’ mental health and well-being is becoming central to positioning the company as one that employees, customers, and society at large are proud to support”, the Deloitte report says.

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