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What is the cost of poor mental health at work?

0 2 years ago

We estimate that poor mental health among employees costs UK employers £42bn – £45bn each year. This is made up of absence costs of around £7bn, presenteeism costs ranging from about £27bn to £29bn and turnover costs of around £9bn. This is an increase of about 6bn and 16% on the figures in our 2017 report, driven primarily by a rise in presenteeism – coming to work despite poor health and underperforming.

Across industries, the highest annual costs of mental health per employee are in the finance, insurance and real estate industries (£3,300) and on average public sector costs per employee are slightly higher than private sector costs (£1,716 compared to £1,652). We also find that the costs to employers of poor mental health are disproportionately high among young employees, at 8.3% of average salary compared to an average across all age groups of 5.8%.

Costs to employersThe costs to employers of poor mental health in the workplace are substantial. Using conservative assumptions, we estimate a total annual cost to businesses of up £45bn, comprising £7bn in absence costs, £27bn – £29bn in presenteeism costs and £9bn in costs of staff turnover. There are also other indirect costs to employers of poor mental health, such as the adverse impact on creativity, innovation, and other employees.

There are a number of factors driving the increase in mental health costs. Most notably, there has been a rise in presenteeism, where individuals choose to attend work despite poor mental health but are unproductive in the work they do. Therefore, although sickness absence has fallen, the costs of presenteeism have risen.

The Mind Workplace Wellbeing Index survey results show that on average the number of employees who say that they always or usually come into the office when they are ‘struggling with [their] mental health and would benefit from time off’ (81%) is almost fourteen times as many as those who say they always or usually take time off (6%). These findings are echoed in the Vitality survey, which estimates that the average days lost per employee to total presenteeism (for all health reasons) rose from 23.5 days in 2016 to 31.6 days in 2018, an increase of a third.

Two methods of calculating presenteeism costs are shown in this report, one uses a sensitised Vitality presenteeism estimate for mental health and the other a multiplier of absence based on a range of evidence sources including the Mind Workplace Wellbeing Index.

This is a 14 page report written by some of the most renoun experts in the field.

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