Mental health issues cut firm productivity by a quarter

Mental health issues cut firm productivity by a quarter

This month I am sharing an article published in the July/August edition of People Management (PM). PM is the UK’s biggest human resources publication, with an average circulation of 134,853. It is the official magazine of the Chartered Institute of Personnel and Development

Companies that don’t do enough to support their workers’ mental health risk seeing their overall productivity drop by a quarter, new research suggests.

The findings from a large-scale survey commissioned by the Mental Health and Productivity Pilot (MHPP) was funded by Midlands Engine and conducted by the Warwick Business School-led Enterprise Research Centre. The research identified that despite the potential hit to their bottom line, less than half of firms offer proactive support for mental health.  Many companies are unsure where to turn for advice.

Responses from individual company bosses also suggest that a post-COVID ‘new normal’ with more remote working could exacerbate productivity-sapping mental health problems among employees.

Questioning 1,900 Midlands firms ranging from micro-businesses to large companies, the researchers found that on the eve of the COVID-19 lockdown, nearly a third (31 percent) of all firms reported seeing sick leave due to mental health problems such as depression and anxiety in the past year.

And significantly, in firms that recorded a hit to their performance as a result, the overall productivity of the company – defined as turnover per employee – was cut on average by 24.5 per cent. It suggests firms that fail to address problems caused by stress could be putting both their workers’ health and their own viability at risk.


Significant costs

According to a recent study by Deloitte, mental health problems could be costing UK firms up to £45 billion per year from sickness absence, ‘presenteeism’ – being at work when ill but working less effectively – and higher staff turnover.

But despite the substantial costs to firms, only 44 per cent offered proactive support for mental health problems, while only a fifth (22 per cent) had a mental health plan for the business and just over a third (35 per cent) had a health and wellbeing lead on the board.

Nearly two-thirds (64 per cent) of companies said they wanted to offer more support. However, many firms tended to look internally or online for ideas to improve mental health, with just 14 per cent consulting specialist mental health charities.

The report recommends that firms should appoint a ‘mental health lead’, particularly in larger companies that tend to experience higher sickness absence for mental health reasons. It also calls for greater partnership working between employers, human resources specialists, and mental health charities.

The researchers suggest more structured, open, and proactive approaches are needed to address employee mental health, with issues dealt with in the same way as physical health problems.


There is a need for a proactive approach

Stephen Roper, Director of the Enterprise Research Centre and Professor of Enterprise at Warwick Business School, said: “This study shows that the scale of the mental health challenge in workplaces was already huge before the onset of COVID-19. Given the massive dislocation to people’s working lives since then, we can expect that situation to have worsened, especially because some of the risk factors highlighted by our study participants, such as remote working, have suddenly become far more commonplace.

“We’ve also shown that poor mental health among staff can have a big impact on the productivity of the entire firm. It may seem obvious that having people off sick or trying to work when ill would mean, ultimately, that sales suffer. But many, many firms aren’t measuring this impact in any real way, so may be seeing a far bigger loss of business than they realise.

“It’s therefore really important for firms to have a proper plan and policies in place. The more proactive ones are appointing mental health leads to take responsibility for this issue across the business and that’s a model that we believe needs to be mainstreamed.”


The solution

If mental health issues cut firm productivity by a quarter then if ever there was a time for personal and proactive support to your staff it is now! Our P3 Business Partners are in weekly contact with your people developing trust and relationship and enabling them to have confidential conversations and proactively address the issues. MYP3 app also provides them with a digital means of communication and access 24-7 support in crisis situations.


About P3 Business Care

P3 Business Care is a Community Interest Company and social enterprise operating across the UK. Supporting your business on a weekly basis we provide personal and proactive care to your employees working in partnership with the company. We develop trust & relationships so we can identify and address issues before they become crisis, absence, or staff turnover.  Read more about our services here

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