In times of financial difficulty, many businesses face tough decisions about where to allocate limited resources. Investment in mental health and wellbeing can often be seen as a discretionary expense rather than a business necessity. The belief is that focusing on core operational functions will keep the business afloat, while other areas, such as mental health, may not be critical.
Yet this viewpoint is fundamentally flawed. Mental health and productivity go hand in hand. By failing to invest in the wellbeing of your people, you can damage business performance.
The essential investment
Research from Deloitte, published in May 2024, shows that poor mental health cost UK employers £51bn in 2023-24. Absenteeism, presenteeism and employee turnover all contribute to these figures. The cost of replacing an employee can range from half to two times their annual salary, not to mention the loss of institutional knowledge, and disruption to teams.
Read more: Employers can't fly blind on employee mental health
Ignoring mental health in the workplace creates a ripple effect. Employees under stress can be less engaged and creative, leading to a drop in overall morale and productivity. Left unaddressed, the impact can spread across the organisation, fostering a negative environment that can damage the company’s reputation, increase liability risks, and even discourage new talent from joining.
It is worth noting that mental health support doesn’t just benefit the employee; it’s a smart business strategy. The same research from Deloitte shows that investing in employee wellbeing yields an average return of £5 for every £1 spent. From improved retention rates to increased engagement and performance, the advantages of prioritising mental health far outweigh the initial costs.
How HR can lead the way
At MHFA England, we believe that HR teams play a crucial role in driving mental health strategies that are effective and sustainable. Employers have a duty of care to their people, which includes protecting their wellbeing. According to the CIPD's most recent Health and Wellbeing At Work Report (2023), 53% of employers have a standalone wellbeing strategy.
Here are some practical steps that HR teams can take:
1. Champion a preventative approach
Organisation-wide early interventions, such as culture change and raising awareness of mental health issues, provide the highest return for employers, at £6.30 for every £1 spent. HR should encourage a shift from reactive measures to preventative initiatives. By identifying issues before they escalate, businesses can avoid more significant costs later.
2. Embed mental health in company culture
Rather than offering isolated mental health workshops, HR should work towards embedding wellbeing into a company’s culture. This involves providing training to staff and management on how to recognise signs of mental health issues, and creating an environment where talking about mental health is normalised.
Read more: Mental health awareness could be "going too far"
3. Measure the impact
HR professionals should measure the return on investment of mental health initiatives. From tracking absenteeism rates to surveying employee satisfaction and productivity levels, capturing data helps justify the expenditure and enables ongoing improvements to be made.
This can be done via staff surveys and organisational performance indicators. For example, what proportion of your staff would recommend the employer as a great place to work? How many people feel that mental health and wellbeing is supported? What is your staff turnover rate? By tracking these measurements, you can listen, adapt and act on improving the workplace to support all staff to thrive.
4. Support leadership and management
Brilliant managers are worth their weight in gold. They play a crucial role in creating working environments that allow people to be authentic and thrive at work.
Given how much value managers deliver to organisations in building cultures that support wellbeing and performance, it is important that they have the tools, time, and training to do the job of managing well. Supporting your managers through tailored training courses can help ensure your people and organisation succeed.
5. Promote work/life balance
Flexible working arrangements, regular check-ins, and encouraging employees to take breaks and their annual leave are vital for maintaining mental wellbeing. HR practitioners should ensure that these practices are championed by leadership and embedded into company policies.
It can be tempting to view mental health support as a non-essential investment. However, neglecting this area is a false economy. The costs of poor mental health to businesses are vast and growing, while the benefits of investing in mental wellbeing are clear. HR can lead this change, ensuring that businesses not only survive but thrive, by prioritising their people. A mentally healthy workforce is more engaged, productive and, ultimately, the backbone of any successful organisation.
Alicia Nagar is head of people, wellbeing and equity at Mental Health First Aid
