Poor mental health costs UK employers up to £45 billion a year has been saved
Poor mental health costs UK employers up to £45 billion a year
22 January 2020
- Rising 16% since 2016, this adds up to an extra £6bn a year for UK employers
- For every £1 spent by employers on mental health interventions they get £5 back in reduced absence, presenteeism and staff turnover
New analysis by Deloitte, published today, finds that poor mental health costs UK employers up to £45 billion each year. This is a rise of 16% since 2016 - an extra £6 billion a year.
The research also looks at how employers can tackle this problem, finding that it pays to support employees’ mental health. On average, for every £1 spent on supporting their people’s mental health, employers get £5 back on their investment in reduced presenteeism, absenteeism and staff turnover.
Analysis from ‘Mental health and employers: the case for refreshing investment’ also looks at how employers can tackle this problem. It shows that higher return on investment can be achieved by early interventions, such as organisation-wide culture change and education, than more in-depth support that may be needed at a later stage when a person is struggling.
Rebecca George OBE, Deloitte Vice Chair and UK Public Sector leader said:
“As our ways of working evolve, so do expectations of employers about how we should support our people.
“This analysis shows very clearly that it pays for employers to provide mental health support at work and that early intervention is vital, for those experiencing poor mental health and employers alike.”
Costs driven largely by ‘presenteeism’
The latest research builds on work conducted by Deloitte in 2017 for the Stevenson-Farmer Review on workplace mental health, which calculated that poor mental health cost UK employers £33-42 billion a year.
Since then, Deloitte has found that there have been positive changes in workplaces, including greater openness in discussing mental health at work in larger employers in particular and more provision of support overall.
However, research also finds that despite this progress, costs continue to climb. This can be attributed largely to a significant rise in mental-health-related ‘presenteeism’, where employees work when they are not at their most productive. Mental-health related absenteeism and staff turnover have also contributed to the costs overall.
‘Always-on’ culture impacts mental health
The analysis describes a complex picture, in which more people with poor mental health are continuing to work when they are not at their most productive, rather than take time off, highlighting leaveism and presenteeism as characteristics of an ‘always-on’ culture, enabled by technology.
Elizabeth Hampson, Deloitte director and author of ‘Mental health and employers: the case for refreshing investment’, said:
“Understanding more about the relationship between mental health and work is in all of our interests.
“Our research finds that, while an increased use of technology can enhance working practices, having the ability to work outside of normal working hours can add to the challenge of maintaining good mental health, and make it hard for some to disconnect from an ‘always-on’ culture.
“The costs of this are significant, for those with poor mental health and for UK employers, and we hope this analysis can help both.”
Young people – the most vulnerable demographic in the workplace
The report also highlights recent studies which find higher prevalence of mental health problems among younger people, who emerge as the most vulnerable demographic in the workplace to poor mental health.
It finds that employers lose the equivalent of 8.3% of the salaries of those aged 18-29 as a result of poor mental health - the highest of any employee age group. Young people are also less likely to disclose mental health problems to employers and more likely to use their holiday instead of taking days off work*.
Paul Farmer, Chief Executive of Mind, said:
“Smart, forward-thinking employers are investing in staff wellbeing, and those who do tend to save money in the long run. This report shows the link between prioritising staff wellbeing and improved loyalty and productivity; and decreased sickness absence and resignations. However it also shows a rise in 'presenteeism' – unwell staff spending unproductive hours at work rather than taking time off.
“As presenteeism costs three times more than sick leave, we need to look at supporting employers to change the culture so their staff feel able to take time off when they are unwell. The Government must also play their part by improving the definition of disability under the Equality Act, so more people with mental health problems can benefit from its rights and protections, as well as increasing the amount of Statutory Sick Pay (SSP) staff receive when they’re off sick. Employers can access resources to help prevent poor mental health and promote wellbeing through the Mental Health at Work Commitment.”
Notes to editors
- Deloitte’s analysis looks at the differences between sectors and industry groups, by region and by age group.
- In order to calculate the costs of poor employee mental health, a range of costs were considered:
- Absence from work;
- Staff turnover and associated costs.
- The report calculates that poor mental health costs UK employers at £42 – 45 billion a year, compared to £33 - £42 billion in 2017 – the 16% rise is calculated from the mid-point between the two.
- ROI (return on investment) figures are based on a systematic review of 125 reports about mental health interventions and calculated by the net return (benefits minus costs) divided by costs incurred by the organisation.
- Insight on young people is based on data provided by Mind and Vitality.
- Further details can be found here: Mental health and employers: the case for refreshing investment.
In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity.
Please see deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms.
Deloitte LLP is a subsidiary of Deloitte NSE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.
The information contained in this press release is correct at the time of going to press.
For more information, please visit www.deloitte.co.uk
Member of Deloitte Touche Tohmatsu Limited
- We’re Mind, the mental health charity. We provide advice and support to empower anyone experiencing a mental health problem. We campaign to improve services, raise awareness and promote understanding. We won't give up until everyone experiencing a mental health problem gets both support and respect. mind.org.uk
- Please note that Mind is not an acronym and should be set in title case.
- Mind has a confidential information and support line, Mind Infoline, available on 0300 123 3393 (lines open 9am - 6pm, Monday – Friday).
- Our online mental health community Elefriends is a safe space where anyone aged 18 and over with experience of a mental health problem can share their story, connect with others, access Mind’s wider information and resources, and give support in return. Find out more at mind.org.uk/community
- Contact Mind’s Media Team for interviews or further information on 0208 522 1743. For out of hours support, call 07850 788 514 or email firstname.lastname@example.org.
- To access to a range of free images to accompany mental health news stories, visit: time-to-change.org.uk/getthepicture. These images have been developed by Time to Change, a campaign to change how we all think and act about mental health problems. Time to Change is led by the charities Mind and Rethink Mental Illness, and funded by the Department of Health, Comic Relief and the Big Lottery Fund.
About Mind’s Workplace Wellbeing programme and Time to Change:
- Mind’s Workplace Wellbeing programme aims to help people understand and start talking about the costs of neglecting mental wellbeing in the workplace.
- Mind offers free resources for employers to help improve mental wellbeing and employee engagement.
- For more information, including tips for employers and staff, visit mind.org.uk/work
- Mind’s Workplace Wellbeing Index enables employers to celebrate the good work they’re doing to promote staff mental wellbeing and be supported to do even better. Forward-thinking employers can get involved by visiting mind.org.uk/index
- Lendlease topped the board at mental health charity Mind’s annual Workplace Wellbeing Index Awards 2018-19.
- Mind, with support from The Royal Foundation, Heads Together and 11 other organisations has created a free UK-wide website bringing together free information, advice, resources and training for employees and employers to promote good mental health at work: mentalhealthatwork.org.uk
- To find out more about the Mental Health at Work Commitment, visit: mentalhealthatwork.org.uk/commitment
- Time to Change is a campaign run by Mind and Rethink Mental Illness which aims to change public attitudes and perceptions towards mental health. Over 1200 organisations have signed the Time to Change Employer Pledge, demonstrating their commitment to ensuring employees facing mental health problems at work feel supported.