Mental Health at Work: The Key to Employee Retention

Apr 27, 2023 | Blog

It’s no secret that a healthy and happy workforce is the key to any successful organisation. But, what happens when mental health issues arise? Unfortunately, the reality is that many employees are struggling with mental health problems. This is having a major impact on employee retention and attrition.

The Impact of Mental Health on Employee Retention and Attrition

Mental health issues are becoming increasingly prevalent in the workplace. Research shows that one in six workers experience common mental health problems such as anxiety or depression. The impact of mental health issues on employee retention and attrition is significant. In fact, research shows that employees who experience poor mental health are more likely to leave their job within a year.

The costs of mental health-related attrition are also significant. Some estimates suggest it can cost up to 200% of an employee’s salary to replace them. In addition to the financial costs, there are also significant impacts on productivity, team morale, and company culture.

The Role of Employers in Supporting Employee Mental Health

Given the impact of mental health issues on employee retention and attrition, it’s clear that employers have an important role to play in supporting employee mental health. There are a number of strategies that organisations can use to support employee mental health, including:

    • Creating a culture of openness and support – Employers should create a culture where employees feel comfortable talking about mental health issues and seeking support. This can be achieved by providing training to managers and employees, offering access to mental health resources, and creating a supportive and inclusive workplace culture.

    • Providing access to mental health resources – Where possible, employers could look to  provide access to mental health resources such as Employee Assistance Programs (EAPs), counselling services, and mental health first aid training. These resources can help employees to manage mental health issues and prevent them from escalating.

    • Supporting work-life balance – Employers should support work-life balance by offering flexible work arrangements, such as remote work or flexible hours. This can help employees to manage their mental health by reducing stress and promoting a healthy work-life balance.

The Role of Employers in Supporting Employee Mental Health

Brands Who Got It Right and Those Who Didn’t

There are numerous examples of businesses who have successfully implemented strategies to support employee mental health, resulting in improved retention rates and a happier, healthier workforce. One such example is Deloitte. They implemented a mental health initiative in 2017 that included training for managers, access to counselling services, and a mental health awareness campaign. As a result, the company saw a 44% reduction in employee turnover rates.

On the other hand, there are also examples of companies who failed to understand the impact of mental health issues on their employees. The result was they experienced high rates of attrition as a result. Amazon faced criticism in 2018 for its high-pressure work culture that was linked to mental health issues among employees. This culture led to high rates of attrition. One report suggesting that the company’s turnover rate was as high as 150% per year.

Did you know…

Mental health problems are estimated to cost the global economy $1 trillion per year in lost productivity.

    • In the US, the cost of depression in the workplace is estimated to be $210 billion per year

    • In the UK, mental health problems cost employers approximately £34.9 billion per year, with 15.8 million working days lost.

    • In a survey of over 1,000 workers in the UK, 73% reported that their employer did not provide any mental health support.

    • A study by PwC found that for every £1 invested in mental health support, employers can see a return of up to £5 in improved productivity and reduced absenteeism.

These statistics highlight the significant impact that mental health issues can have on both employees and employers. Accordingly, investing in mental health support is not only the right thing to do for employees, but it also makes good business sense.


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