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PSYCHOLOGY

What is the actual cost of stressed-out employees for a business? How can we help them?

The times we live in are not easy, and for a number of reasons. Over the last decade, we have witnessed growing uncertainty about the stability of the surrounding world, fueled by the pandemic, war, and global economic downturn on the one hand, and a grave mental health crisis on the other.

Aleksandra Łomzik

According to the World Health Organization, being overloaded with stimuli and information from the digital world, fearing for our own safety, living next to a country beset by war, and experiencing a decline in economic stability related to soaring inflation makes us particularly vulnerable to stress and its consequences. Unfortunately, scientific reports suggest that all this affects our physical and mental well-being.

Employers at the time of a mental health crisis

This situation has a direct impact on the condition of the labor market – in terms of productivity, work safety, and cost-effectiveness. A WHO study estimates that common mental health conditions cost the world US$1 trillion a year. The amount includes not only investments in mental health services, but also costs incurred by businesses that employ people struggling with mental health challenges.

It is time to face the fact that this is a global issue. Considering estimates made by the World Health Organization, as many as 970 million people worldwide live with behavioral problems or mental disorders. At the same time, most of them are active in the labor market. Taking these statistics into account, one can safely assume that people overburdened by stress are employed in virtually every enterprise or organization. Needless to say, this has many consequences not only for the employees’ personal lives, but also for the employer’s interests. It has been estimated that a company with 10,000 employees and $70 million in profits will lose as much as $17.2 million due to problems caused by employee depression, including as much as $10 million due to absenteeism and reduced productivity related to mental health problems. [1]

The data presented above shows the importance of employers’ involvement in activities that support mental health in the workplace, especially as investing in the mental well-being of the workforce means furthering employers’ business-related interests. In this context, employer-sponsored initiatives designed to prevent mental health problems among employees can be regarded as a win-win solution. Thanks to such activities, employees get resources they might never have access to if not for the employer’s involvement. As a result, they can improve the quality of their lives, and the company can pursue its business goals more effectively.

Consequences of a lack of employee support

From the perspective of the labor market situation and the global mental health crisis, it is an obvious conclusion that businesses should invest in the mental well-being of the people they employ. But what happens if we as employers ignore the problem? Which areas of work are affected by overwhelming stress and work overload? What exactly can happen if we fail to address these issues? Here are a few potential consequences:

  • Reduced productivity

If a person’s mental problems are not properly taken care of, the person finds it difficult to be productive and engage in their everyday job duties. This condition can slow them down and make them think and act chaotically. This, in turn, will have a major impact on their performance and the quality of their work. 

  • Decreased workplace safety

Being overwhelmed by stress and caught up in problems related to private life or health issues affects cognitive processes in the brain. The cognitive processes include thinking, memorizing, linking facts, reacting promptly, or focusing attention. This condition can decrease attentiveness to workplace hazards and contribute to an increase in the number of on-the-job accidents. 

  • Increased employee turnover

It is difficult to work in a high-pressure environment. Workplaces where no one makes an effort to reduce stimuli that generate stress often have a high employee turnover. Considering that the recruitment and induction processes usually involve considerable expenditure on the part of the employer, addressing the problem is likely to generate cost reductions.

  • More missed work time

Sick leaves associated with the treatment of mental health conditions can take anywhere from a few weeks to a few months. Effective against flu, a few days in bed won’t be enough to treat depression. A prolonged absence of a sick employee has a multitude of costly consequences, including overtime work for other team members, the need to hire and train substitute staff, not to mention pushed-back deadlines for project completion. In view of the fact that from the 34th day of the sick leave onwards, the employee’s sick pay is fully covered by the employer, such an absence can also be highly unfavorable from an economic point of view.