Mental health impacts everything we do as human beings, including our work. Thus, it affects all aspects of business.
With 43% of adults feeling more anxious this year than they did in 2023, and 23.08% of adults experiencing a mental illness in the past year, companies have an incredible opportunity to help employees (and stand out in a tight job market).
When mental health is supported at work, everyone benefits—from the individual contributor to the CEO. For a company of 1,000 people, starting by addressing depression alone can reduce company costs by $340,000.
If your company isn’t addressing employee mental health right now, don’t worry! It’s not too late to start.
You’re likely concerned about how you’ll pitch an employee mental health program to your leadership team, and how you’ll report on the ROI of the employee mental health program’s success. We’ll show you how!
The Quantitative Benefits of a Mental Health Program
This is the primary type of data most company executives want to hear about. These are the benefits you can expect from mental health programs based on scientific research, and are easier to quantify.
You’ll need to measure how your company stands in the following areas before and after implementing your mental health program to see the true ROI impact.
Here are a few of the best quantitative metrics we’ve seen to determine the ROI of a wellness program.
1. Reduce healthcare costs
According to NCBI, mental health challenges cost the U.S. economy $16.3 trillion each year.
Everyday stressors like financial insecurity, long work hours, work-life balance struggles, high job demands, and little control of day-to-day work, when combined, can be as harmful to an employee’s health as secondhand smoke.
Our bodies and minds are very closely connected. When our mental health suffers, so do our bodies and vice versa.
Poor mental health and stress on the job can lead to health problems including:
- Chronic pain
- Migraines and tension headaches
- Lowered immunity to other illnesses
Mental health disorders also contribute to diseases such as:
- Cancer
- Diabetes
- Respiratory disease
- Heart disease
Things like exercise, nutrition, and therapy services help prevent high employee healthcare costs down the road.
How to Calculate It: SHRM has a great spreadsheet that will help you calculate your company’s health care costs per employee.
2. Reduce absenteeism and presenteeism
Depression alone leads to 200 million lost workdays each year.
Depression management can get 120 million of those workdays back—up to a 60% reduction in missed workdays.
According to NCBI, “Nearly 86 percent of employees treated for depression report improved work performance.”
When mental health is a priority at work, employees take days off when they need them—reducing presenteeism, absenteeism, and increasing productivity and wellbeing in the long run.
How to Calculate It: To find your company’s absenteeism rate, divide the number of absent days by the number of typical workdays in a given period.
Calculating the presenteeism rate is much harder to measure. A lot of intangibles, like employee satisfaction, play into presenteeism. Try surveying your employees to get a sense of their level of productivity on the job.
This article walks through some more ways to calculate presenteeism.
3. Increase retention
20% of the population have quit their jobs due to mental health struggles. And this number is even more serious for the 50% of Millennials and 75% of Gen Z that have left due to mental health reasons.
91% of Gen Z (who will make up 27% of the workforce by 2025) say it is essential that their employer has a mental health policy in place.
Turnover is one of the most expensive costs for businesses. Losing an employee can cost 1.5 to 2 times that employee’s salary. If you’re not addressing mental health at work, you fail to address a primary need of today’s workforce.
When employees feel like they are a part of a community and not just a line on a spreadsheet, they are a lot more likely to be invested in your company—and to be investing in their own mental health.
Related: How to Convince Executives that Addressing Employee Attrition is Critical
How to Calculate It: To find your company’s retention rate for the past year, divide the number of employees that stayed at your company in the past year by the number of employees you started with on the first of the year. Multiply that number by 100, and you’ve got your retention rate.
4. Reduce disability leave
Most people will suffer from a mental illness at some point in their lifetime. Mental illness has been estimated to account for about one-third of disability claims and 70% of workplace disability costs, according to McKinsey. Mental illness can also lead to chronic pain and puts employees at greater risk of developing cardiovascular and metabolic diseases. In serious cases, mental illness can make adults twice as likely to develop these diseases. Addressing mental health at work helps decrease disability leave for psychological and physical struggles (more on that in the healthcare costs section above).
How to Calculate It: Keep close tabs on how many days employees take off due to their disabilities and how many disability claims are coming in overtime, if possible.
The Qualitative Benefits of a Mental Health Program
The qualitative—or intangible—benefits make a difference in your organization’s culture. The intangibles include employee satisfaction and increased manager-employee trust.
Just like your mental health program should address the employee’s whole being, it will also impact nearly every aspect of your business for the better.
1. Increase job satisfaction
Giving employees what they want (and need!) will undoubtedly improve their work satisfaction. Mental health support is one of those needs.
Prioritizing mental health at work helps address Forbes fundamentals of employee satisfaction:
- Good work fit -- Healthier employees are more likely to use their strengths to the fullest on the job.
- Knowing that what you do matters -- If employees feel that they matter, they will likely be more passionate about making a difference for customers. Providing wellness benefits is a great way to let employees know they are appreciated.
- Working with people you get along with -- Mental health programs can help reduce interpersonal conflict.
- Getting feedback -- Mental health programs help managers realize the importance of talking about mental health and helping employees know where they stand.
- Growth opportunities -- Mental health programs help employees grow personally so they can grow more professionally.
2. Increase employee engagement
Employees that feel better are more likely to participate. When employees feel that their mental health is supported, they will feel comfortable being themselves at work, helping to create a culture where everyone feels accepted.
There are lots of employee engagement statistics out there you can use to see how engagement improves as mental health is addressed. Here are a few:
- Emotional and mental wellness stats using employee engagement surveys
- Retention and employee attrition rates
- Customer satisfaction rates
Related: The Integral Link Between Employee Engagement and Mental Health
3. Attract new talent
There has been a shift towards valuing home life, mental health, and flexibility more than working long hours at work.
Addressing mental health helps employees maintain better work-life balance—a top concern for Millennials and Gen Z.
Putting mental health first creates a more attractive working environment for everyone because it shows that the employer cares about their employees on a deeper level.
Related: Employee Benefits Close the Deal for Top Talent Recruits
4. Improve interpersonal communication and conflict resolution
The International Journal of Conflict Management found that conflict at work leads to poorer mental health, and vice versa, leading to burnout and reduced morale.
Great mental health programs will bring in a therapist to talk to your team about conflict. Also, offering mental health support and therapy services that employees can access on their own time may help reduce conflict down the road.
Here are some tips on how to manage conflict in the workplace as an HR leader from HR Cloud:
- Clarify what is the source of conflict
- Find a safe and private place to talk
- Listen actively and let everyone have their say
- Investigate the situation
- Determine ways to meet the common goal
- Agree on the best solution and determine the responsibilities each party has in the resolution
- Evaluate how things are going and decide preventative strategies for the future
5. Increase trust and empathy
Company culture trickles down from the top. When executives put mental health first—and managers are open about their mental health—employees feel safer at work. Being vulnerable with one another increases trust.
Trust in the workplace and mental health are strongly correlated. Working in a trusting workplace environment leads to 32% higher mental wellbeing levels.
We are more receptive to other people on their healing journeys while walking on our own mental health journey.
Mental health programs help us appreciate neurodiversity and reduce the mental health stigma in the workplace, increasing empathy.
6. Improve company culture
Every one of these factors plays into the company culture. Your mental health program will get the ball rolling on these changes.
We highly recommend surveying your people using an employee engagement survey before and after implementing your mental health program so you have a better grasp of just how impactful it can be. You’ll start to observe your team interacting and working differently. Odds are, employee ties will be stronger, and employees will start to get more excited about their work.
As time goes on, all of these benefits will multiply, leading to a tremendous ROI for your company!
More Tips on Gaining Leadership Buy-In for Mental Health Programs
In addition to sharing the quantitative and qualitative benefits of workplace mental health programs and their potential ROI, it can be helpful to frame a mental health program as a strategic, long-term investment in your team. It’s not just a nice-to-have, it’s a move that can greatly improve company profitability and make your company more attractive to top talent.
Here are some additional talking points you can use when talking to your leadership team about a workplace mental health program and its ROI.
1. Link employee mental health to business goals
Think about which metrics the executives at your company are driven by. Is it profitability? Employee productivity? Funding raised? Number of closed deals?
When pitching a mental health program to leadership, try to connect the dots between employee wellbeing and the key business outcomes that matter to your execs. For example, reducing absenteeism and presenteeism directly improves productivity. Lower turnover means less money spent on recruiting and training new employees, while healthier employees lead to lower healthcare costs.
Example Talking Point: “Investing in mental health programs can greatly reduce turnover, which will reduce the cost of replacing employees, which is typically 1.5 to 2 times an employee's salary. This directly impacts our bottom line by helping us retain talent and reduce hiring costs.”
2. Emphasize cost savings and ROI associated with a mental health program
Quantify the financial return leaders can expect by compiling stats from credible sources and, if possible, internal company data.
Many leaders worry about the initial investment in mental health programs without fully understanding the long-term potential savings. Present statistics such as how managing depression and anxiety can recover up to 60% of lost workdays, or how each dollar invested in mental health has a potential ROI of $4 through increased productivity and reduced healthcare costs.
Example Talking Point: “According to the World Health Organization, for every dollar invested in treating mental health issues, there is a $4 return in improved health and productivity. Based on our company size and current healthcare expenses, I anticipate that we can expect similar results.”
3. Share competitor and industry trends
Many executives are concerned about being competitive in the market and gaining more market share. Presenting mental health programs as a way to stand out in the marketplace, especially in a tight labor market, can capture their attention. Show how your competition is making mental health a priority and reaping the benefits. Positioning mental health as a way to attract top talent—particularly Millennials and Gen Z, who prioritize mental health benefits—can resonate with leadership.
Example Talking Point: “91% of Gen Z workers consider mental health benefits essential, and by 2025, Gen Z will make up 27% of the workforce. If we want to stay competitive among this talent pool, prioritizing mental health is key.”
4. Appeal to the long-term sustainability of mental health programs
Be sure to explain how investing in employee mental health today lays the groundwork for sustainable growth and helps build a resilient workforce that can successfully face future challenges. Whether it’s economic downturns, industry shifts, or an unforeseen crisis personally or professionally, a mentally healthy workforce will be better equipped to navigate tough times.
Example Talking Point: “Providing a mental health program is part of building a culture that prioritizes mental health, leading to a more resilient, adaptable workforce. It positions us to thrive, even in times of uncertainty, boosting the company’s chances for long-term sustainability.”
5. Share mental health program case studies
Try sharing case studies or examples from other companies that have seen success from mental health programs. Show how mental health programs not only improved employee wellbeing but also had a positive impact on key business metrics. The Center for Workplace Mental Health website has many case studies to pull from.
Example Talking Point: “Companies like Caterpillar have seen great returns on their mental health program. For instance, they found that employees missed an average of 3.78 fewer hours of work, leading to a 36.3% improvement.”
How to Calculate ROI Stats on Your Mental Health Program
Focus on the quantitative benefits. Be sure to compare healthcare costs, absenteeism rates, and retention levels before and after implementing the mental health program.
Give your program at least 6 months to kick in before measuring its ROI.
Measure the intangibles as well. Send out surveys to your team before and after implementation to see how employees are feeling.
Loop your company managers in on what you are looking to measure so they can look out for changes in their team and provide feedback on those improvements and changes to you.
Here are some great questions we’ve discovered to ask employees before and after implementing the mental health program, all on a scale of 1-10.
- How stressed have you been in the past month, on average?
- How difficult is it for you to focus at work?
- How passionately do you feel about your work and our company?
- How anxious have you felt about work in the past month on a typical day?
Keys to Maximizing the ROI of Your Mental Health Program
Now that you know all of these benefits of mental health programs, how do you get the maximum ROI possible? Here is what we’ve seen work well.
- Integrate the mental health program into your company culture by talking about it during team meetings, training your managers on mental health, and getting your company executives to talk about their own mental health experiences.
- Truly making mental health a priority, not just tacking on a mental health program as a company benefit.
- Ensure that your mental health program is holistic and supports all areas of employee wellbeing, including physical, mental, emotional, and financial health.
- Encourage company leaders to embrace an open mental health dialogue and use the mental health program themselves.
- Ensure the mental health program you provide employees is designed for high utilization (no middle-man to set virtual therapy appointments, etc.). Work closely with them to increase employee engagement with the platform.
Whether your company has a mental health program or not, these stats on the relationship between mental health programs and a positive ROI can help get your leadership team on board with your mental health initiatives.
Here are some helpful mental health program ROI calculators to see how a mental health program can benefit your workplace (plus, check out the one on our homepage).
How We Got The ROI Calculations on Our Homepage
Our homepage has a slider where you can see how your company is being impacted by mental health, including:
- Number of employees suffering from mental health challenges
- Increased productivity after implementing a mental health program
- Estimated long-term savings after implementing a mental health program
We laid out how the slider works below in case you’d like to include it as a part of your case for a workplace mental health program when pitching the idea to executives.
1. Number of employees suffering from mental health challenges
According to the APA Center for Workplace Mental Health, 5% of employees suffer from diagnosed depression and are likely suffering from anxiety as well. We multiply the total number of employees at your company by 5% to get this number.
2. Increased productivity after implementing a mental health program
There are about 160 million people that are employed in the United States in 2022. Since about 5% suffer from depression and related mental health challenges, and 200 million days of productivity are lost due to depression each year (according to SHRM), about 25 workdays are lost per employee with depression each year.
We multiply 25 workdays lost per year by the number of people that are suffering from depression at your company (calculated in step one) to get the total days lost due to common mental health issues per year at your company.
Finally, according to the APA Workplace Mental Health (same source previously mentioned), depression treatment can reduce absenteeism at work by 60%. Multiply this by 25 (workdays lost per employee due to depression each year) by 60% to get 15, or the days in productivity regained after implementing a mental health program that addresses depression per employee.
Multiply 15 by the total number of employees suffering from depression at your company in step 1 to get how many workdays your company will gain back each year after implementing a mental health program.
3. Estimated long-term savings after implementing a mental health program
We're in the home stretch! To calculate the final ROI of your mental health program, we factor in these stats:
According to the APA, the cost of depression per year for employers in America is $44 billion. 8 million employees suffer from depression each year (5% of the total number of workers in the USA). $44 billion divided by 8 million pans out to $5,500, the cost of depression per employee per year at your company.
Remember that the workdays lost per employee with depression each year is 25? Divide this by the annual cost of depression per employee ($5,500) to get $220, the cost per missed day due to depression per employee.
Almost there. All we need to do is multiply the workdays gained calculation (the final output from step 2) by $220 to get the potential money gained back after investing in a mental health program that treats depression.
Whew! We did it. That's how we built our ROI calculator.
Are you inspired to get a mental health program for your team? Try reading this article next: Your Guide to the EAP Implementation and Search Process.
Request a demo to learn how Nivati’s mental health program can improve your bottom line.
Disclaimer
By participating in/reading the service/website/blog/email series on this website, you acknowledge that this is a personal website/blog and is for informational purposes and should not be seen as mental health care advice. You should consult with a licensed professional before you rely on this website/blog’s information. All things written on this website should not be seen as therapy treatment and should not take the place of therapy or any other health care or mental health advice. Always seek the advice of a mental health care professional or physician. The content on this blog is not meant to and does not substitute for professional medical advice, diagnosis, or treatment.
