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3 Not-So-Obvious Ways Employee Mental Health Is Costing Your Organization



More and more organizations are prioritizing employee mental health after the COVID-19 pandemic put a spotlight on its importance. Research consistently shows that poor mental health is costing big bucks in what usually looks like a domino effect related to absenteeism, increased insurance premiums and more. These examples are easy to see, understand and quantify… while others might not be so obvious. As we explore the multi-faceted ways our work lives are impacted by our own mental health and that of our peers and leaders we’re understanding just how high the price tag can be. Here are a few issues that carry a hefty price tag that you may not have considered before.


1. Talent Acquisition & Retention

A damaged corporate reputation is tough to remedy. When word on the street is that an organization has a less-than-stellar culture and fails to take employee wellness seriously, a common long-term result is difficulty filling vacancies. Turnover is a huge cost to organizations. Losing an employee can cost an organization 1.5 to 2.5 times the departing employee’s annual salary with a significant part of these costs related to hiring and training another worker. Organizations may have a hard time even finding people willing to take a job that needs to be filled, which could mean the successful candidate doesn’t have the specific competencies the position demands. Not only does that obviously mean less efficiency and higher risk of errors but it also reduces the likelihood the new employee will stay in the role long-term, and the problem just starts over. The resources allocated to the onboarding process – from posting (and sometimes re-posting) a job, having someone pore over applications and lead interviews, lead orientation and training – are huge, and companies sometimes end up having to up the incentives to fill vacancies. If recruitment and retention issues are posing challenges to your organization, consider whether an investment in employee wellness might be a step in the right direction.


2. Linked Physical Health Problems

Although the jury’s still out on the dollar figure, we know the mind-body connection is a strong one and mental distress can definitely result in physical symptoms. Often times it’s a chicken/egg situation: did the physical health problem cause or trigger a mental health problem (e.g. a spike in stress level) or was it the other way around? Poor mental health can also worsen chronic physical health problems, from high blood pressure to asthma, from migraines to pain related to acute injuries. It’s difficult to quantify because many individuals struggling with physical health issues aren’t factoring in whether their mental health might be a contributory factor, and the link isn’t always obvious even to health care providers. Because of stigma, something called “diagnostic overshadowing” often occurs, where a medical professional may not take a patient’s physical health complaints as seriously if they’re living with a mental illness or they may chalk up all physical symptoms as being caused by the mental illness, resulting in delayed diagnosis and subsequent treatment/effective management of a physical health problem. Research also tells us those living with mental health problems are less likely to report or seek treatment for physical health challenges, and vice versa, so we know the data we do have isn’t highly accurate.


3. Presenteeism

Absenteeism (sick time plus short and long term disability leave) was once presumed to be a key way of measuring the impact of poor mental health on the labour force, within specific industries and within organizations. We now understand that this is just the tip of the iceberg. Presenteeism – being physically present at work but functioning below your usual standard or potential because of mental distress – costs at least 7.5 times more than absenteeism! In Canada’s that’s estimated to be a whopping $26,500 per employeeevery year, totalling $6.3 billion annually. Some quick math if you’re reading this post on the date it was published (August 18th, 2021): if your organization employs 500 people and your fiscal year started on April 1st, you’ve already lost about $5 million because of presenteeism in these past 4 and a half months alone.



Kind of overwhelming, right? Well, there’s good news! With some relatively simple strategies and consistency your organization can plug these holes and even more importantly, make the workplace a happier, healthier environment for everyone. (Check out this blog post for a few ideas on how to get started!) The best defense is taking a proactive stance on employee mental health, positioning your organization to get out ahead of these issues. Don’t we all want to go to work each feeling well supported, valued and genuinely cared for?



Elizabeth Eldridge is a Psychological Health & Safety Consultant based in southern New Brunswick, Canada. In addition to frequent keynote speaking and corporate training on mental health she is the owner/operator of Arpeggio Health Services, Atlantic Canada’s largest provider of public mental health trainings. Learn more at elizabetheldridge.com, summitcorporatewellness.com and arpeggiohealthservices.com.

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