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In 2024, as companies across various industries push for maximum productivity and innovation, an often-overlooked threat remains: poor employee mental health. The increasing costs associated with untreated mental health issues represent one of the biggest challenges employers face today.
Mental health issues are escalating at an alarming rate. Globally, over 301 million people live with anxiety and 280 million suffer from depression. Yet, more than two-thirds of employees do not receive the mental health care they need. The economic impact of this is staggering.
In the U.S. alone, untreated mental health issues cost employers over $105 billion annually, according to the Center for Prevention and Health Services. These costs include absenteeism, presenteeism (working while unwell), and high employee turnover.
Under the Family and Medical Leave Act (FMLA), employees are entitled to 12 weeks of unpaid leave for serious health conditions, including mental health issues. While this provides essential support for employees, it also leaves employers with the challenge of maintaining productivity with a reduced workforce. In industries where the pressure to perform is high, this can be particularly detrimental.
Several factors contribute to the growing mental health crisis in the workplace. The lingering effects of the COVID-19 pandemic, economic uncertainty, and the rapid pace of modern work are increasing stress and burnout.
According to recent reports, mental health-related leaves of absence have risen by 300% between 2017 and 2023, with a 22% increase in 2023 alone.
Women, in particular, are disproportionately affected. In 2024, they accounted for 71% of all mental health leaves, largely due to the added burden of caregiving responsibilities, which have tripled since 2020.
Poor mental health doesn’t just lead to leaves of absence, it also manifests in presenteeism—where employees show up to work regardless but are unable to perform at their best. According to the American Psychological Association, 88% of workers feel "used up" at the end of the day, a clear indication of burnout. This not only reduces individual productivity but also affects team dynamics, leading to a decline in overall workplace morale.
Industries that have faced layoffs are particularly vulnerable, as remaining employees often take on additional responsibilities to compensate for reduced staff. This increased workload can lead to higher stress levels, further exacerbating mental health issues and leading to a vicious cycle of declining productivity and increasing burnout.
The financial implications of poor mental health are significant. The cost of absenteeism, reduced productivity, and turnover due to mental health issues can quickly add up. For instance, untreated mental health conditions cost employers an estimated $60,000 annually for a single organization and $105 billion nationwide. These costs are not limited to specific industries; they affect all employers, regardless of their size or sector.
Turnover, in particular, is a costly consequence of poor mental health. Hiring and training new employees is expensive, with the average cost per hire nearing $4,700. When experienced employees leave, the loss of institutional knowledge further hampers productivity, leading to additional financial losses.
Given the profound impact of poor mental health on productivity and profitability, employers must take proactive steps to support their employees’ mental well-being. This starts with recognizing the critical role managers play in influencing mental health. Studies show that managers have as much impact on an employee’s mental health as their spouse or partner. Therefore, training managers to recognize signs of mental health struggles and providing them with the tools to support their teams is essential.
Employers must also assess their mental health benefits and ensure they are aligned with the needs of their workforce. Investing in comprehensive mental health programs, including innovative treatments like Ketamine-Assisted Therapy (KAT) and Stellate Ganglion Block (SGB), can provide employees with the support they need to thrive both personally and professionally.
The costs of poor mental health extend far beyond the individual, the ripple effects through an organization affect productivity, morale, and ultimately, the bottom line. Today, it’s more critical than ever for employers to prioritize mental health as a key component of their overall business strategy. By investing in effective mental health solutions and fostering a supportive work environment, employers can head-on mitigate these costs and create a healthier, more productive workforce.
