/Employers who spend more on their workers’ mental health make more money, Deloitte study finds

Employers who spend more on their workers’ mental health make more money, Deloitte study finds

Canadian companies that invest in preventive programs and measurable initiatives to tackle poor mental health among their employees will make more money than their competitors that don’t, according to a new study from Deloitte.

For every dollar spent, the median return on investment is $1.62 by the third year and increases over time, according to the study, which looked at data from seven large companies that had implemented programs and initiatives for at least three years.

Craig Alexander, chief economist at Deloitte, said the math laid out in the study works because companies that make the investments have more productive workers, and pay out less in benefits to cover their share of the cost of workers struggling with mental health issues.

“It becomes a no-brainer to do these sorts of investments,” Alexander said in an interview.

“I don’t think people realize the cost of mental health issues to the Canadian economy.”

Some 500,000 Canadians are unable to work at some point due to poor mental health problems or illnesses, according to the study, and the direct and indirect costs to the economy top $56 billion.

Direct costs to the Canadian companies include healthcare benefits and drug costs, as well as short and long-term disability payments, and total more than $50 billion annually. On top of that, there are indirect costs of $6.3 billion due to absenteeism, employee turnover, and something the study calls “presenteeism,” — workers attending work while they’re unwell — which results in lower productivity.

I don’t think people realize the cost of mental health issues to the Canadian economy

Craig Alexander, chief economist at Deloitte

On average, mental health issues account for 30 to 40 per cent of short-term disability claims and 30 per cent of long-term disability in Canada, and mental health diagnoses are rising by up to one per cent each year.

Among the study’s findings is that better support during short-term disability leave and the return to work leads to reduction in the cost of long-term disability claims.

Bell Canada, which was among the companies whose data was looked at in the study, has measured a positive return on investment in workplace mental health for the past seven years.

Mental health-related short-term disability relapse and recurrence is down by 50 per cent since 2010, according to the study, while short-term disability claims have been reduced by 20 per cent. Meanwhile, use of the company’s employee and family assistance programs has increased by 190 per cent since 2010.

Companies can help themselves and the broader economy in the long run by making such investments, which can be started small and developed along a continuum laid out in the study, Alexander said. Even small steps that aren’t yet generating a return on investment are “reducing the cost of doing nothing,” according to the study.

Alexander said if corporate Canada did a better job of addressing the mental health of employees, it would also take some of the burden off the public healthcare system and help tackle the country’s longstanding issue of lagging productivity.

“Anything employers can do to take these (challenges) off the table would be helpful,” he said.

Financial Post

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