A whopping 41.5% of people reported symptoms of anxiety or depression in 2021.
For a company of 1,000 people, just focusing on addressing depression can reduce company costs by $340,000.
Mental health impacts everything we do as human beings. Mental health is so pervasive that it impacts everything humans do at work. Thus, it affects every aspect of a business.
When mental health is supported at work, everyone benefits—from the individual contributor to the CEO.
If your company isn’t addressing employee mental health right now, don’t worry! It’s not too late.
So, if mental health is so impactful, how do you start measuring the ROI on employee mental health programs?
- Break the ROI elements down into measurable categories
- Understand the difference between the quantitative and qualitative benefits
- Start measuring progress and seeing the positive impact!
Keep reading because this article will teach you how to communicate those benefits to your company leaders as well.
The Quantitative Benefits
This is the hard data company executives want to hear about. They are the benefits you can expect from mental health programs based on scientific research.
Measure how your company stands in these areas before and after implementing your mental health program to see the true ROI impact.
Here are a few of the best quantitative metrics we’ve seen clients track to determine the ROI on their wellness program.
1. Reduce healthcare costs
According to NCBI, mental health challenges cost the U.S. economy $16.3 trillion each year.
Everyday stressors like financial insecurity, long work hours, work-life balance struggles, high job demands, and little control of day-to-day work when combined can be as harmful to an employee’s health as secondhand smoke.
Our bodies and minds are very closely connected. When our mental health suffers, so do our bodies and vice versa.
Poor mental health and stress on the job can lead to health problems including:
- Chronic pain
- Migraines and tension headaches
- Lowered immunity to other illnesses
And mental health disorders also contribute to diseases such as:
- Respiratory disease
- Heart disease
Things like exercise, nutrition, and therapy services help prevent high employee healthcare costs down the road.
How to Calculate It: SHRM has a great spreadsheet that will help you calculate your company’s health care costs per employee.
2. Reduce absenteeism and presenteeism
Depression alone leads to 200 million lost workdays each year.
Depression management can get 120 million of those workdays back—up to a 60% reduction in missed workdays.
According to NCBI, “Nearly 86 percent of employees treated for depression report improved work performance.”
When mental health is a priority at work, employees take days off when they need them—reducing presenteeism, absenteeism, and increasing productivity and wellbeing in the long run.
How to Calculate It: To find your company’s absenteeism rate, divide the number of absent days by the number of typical workdays in a given period.
Calculating the presenteeism rate is much harder to measure. A lot of intangibles, like employee satisfaction, play into presenteeism. Try surveying your employees to get a sense of their level of productivity on the job.
This article walks through some more ways to calculate presenteeism.
3. Increase retention
20% of the population have quit their jobs due to mental health struggles. And this number is even more serious for the 50% of Millennials and 75% of Gen Z that have left due to mental health reasons.
91% of Gen Z say it is essential that their employer has a mental health policy in place.
Turnover is one of the most expensive costs for businesses (losing an employee can cost 1.5 to 2 times that employee’s salary). If you’re not addressing mental health at work, you fail to address a primary need of today’s workforce. What business can survive that?
When employees feel like they are a part of a community and not just a line on a spreadsheet, they are a lot more likely to be invested in your company—and to be investing in their own mental health.
How to Calculate It: To find your company’s retention rate for the past year, divide the number of employees that stayed at your company in the past year by the number of employees you started with on the first of the year. Multiply that number by 100, and you’ve got your retention rate.
4. Reduce disability leave
Most people will suffer from a mental illness at some point in their lifetime. Mental illness has been estimated to account for about one-third of disability claims and 70% of workplace disability costs, according to McKinsey. Mental illness can also lead to chronic pain and puts employees at greater risk of developing cardiovascular and metabolic diseases. In serious cases, mental illness can make adults twice as likely to develop these diseases. Addressing mental health at work helps decrease disability leave for psychological and physical struggles (more on that in the healthcare costs section above).
How to Calculate It: Keep close tabs on how many days employees take off due to their disabilities and how many disability claims are coming in overtime, if possible.
The Qualitative Benefits
The qualitative—or intangible—benefits make a difference in your organization’s culture. The intangibles include employee satisfaction, increased manager-employee trust, and more, which feed into the company culture.
Just like your mental health program should address the employee’s whole being, it will also impact nearly every aspect of your business for the better.
1. Increase job satisfaction
Giving employees what they want (and need!) will undoubtedly improve their work satisfaction. Mental health support is one of those needs.
Prioritizing mental health at work helps address Forbe’s fundamentals of employee satisfaction:
- Good work fit -- Healthier employees are more likely to use their strengths to the fullest on the job.
- Knowing that what you do matters -- If employees feel that they matter, they will likely be more passionate about making a difference for customers. Providing wellness benefits is a great way to let employees know they are appreciated.
- Working with people you get along with -- Mental health programs can help reduce interpersonal conflict.
- Getting feedback -- Mental health programs help managers realize the importance of talking about mental health and helping employees know where they stand.
- Growth opportunities -- Mental health programs help employees grow personally so they can grow more professionally.
2. Increase employee engagement
Employees that feel better are more likely to participate. When employees feel that their mental health is supported, they will feel comfortable being themselves at work, helping to create a culture where everyone feels accepted.
There are lots of employee engagement statistics out there you can use to see how engagement improves as mental health is addressed. Here are a few:
- Emotional and mental wellness stats using employee engagement surveys
- Retention and employee attrition rates
- Customer satisfaction rates
3. Attract new talent
There has been a shift towards valuing home life, mental health, and flexibility more than working long hours at work.
Addressing mental health helps employees maintain better work-life balance—a top concern for Millennials and Gen Z.
Putting mental health first creates a more attractive working environment for everyone because it shows that the employer cares about their employees on a deeper level.
4. Improve interpersonal communication and conflict resolution
The International Journal of Conflict Management found that conflict at work leads to poorer mental health. Poor mental health contributes to more conflict at work—leading to burnout and other challenges.
Great mental health programs will bring in a therapist to talk to your team about conflict. Even if you think this isn’t necessary for your team, better mental health support that employees can access on their own time will help reduce conflict down the road.
Here are some tips on how to manage conflict in the workplace as an HR leader from HR Cloud:
- Clarify what is the source of conflict
- Find a safe and private place to talk
- Listen actively and let everyone have their say
- Investigate the situation
- Determine ways to meet the common goal
- Agree on the best solution and determine the responsibilities each party has in the resolution
- Evaluate how things are going and decide preventative strategies for the future
5. Increase trust and empathy
Company culture trickles down from the top. When executives put mental health first—and managers are open about their mental health—employees feel safer at work. Being vulnerable with one another increases trust.
Trust in the workplace and mental health are strongly correlated. Working in a trusting workplace environment leads to 32% higher mental wellbeing levels.
We are more receptive to other people on their healing journeys while walking on our own mental health journey.
Mental health programs help us appreciate neurodiversity and reduce the mental health stigma in the workplace, increasing empathy.
6. Improve company culture
Every one of these factors plays into the company culture. Your mental health program will get the ball rolling on these changes.
We highly recommend surveying your people using an employee engagement survey before and after implementing your mental health program so you have a better grasp of just how impactful it can be. You’ll start to observe your team interacting and working differently. Odds are, employee ties will be stronger, and employees will start to get more excited about their work.
As time goes on, all of these benefits will multiply, leading to a tremendous ROI for your company!
How to Get ROI Stats on Your Mental Health Program
Focus on the hard benefits. Compare healthcare costs, absenteeism rates, and retention levels before and after implementing the mental health program.
Give your program at least 6 months to kick in before measuring its ROI.
Measure the intangibles as well. Send out surveys to your team before and after implementation.
Loop your company managers in on what you are looking to measure so they can look out for changes in their team and provide feedback on those improvements and changes to you.
Here are some great questions we’ve discovered to ask employees before and after implementing the mental health program, all on a scale of 1-10.
- How stressed have you been in the past month, on average?
- How difficult is it for you to focus at work?
- How passionately do you feel about your work and our company?
- How anxious have you felt about work in the past month on a typical day?
The Key to Maxing the ROI of Your Mental Health Program
Now that you know all of these benefits of mental health programs, how do you get the maximum ROI possible? Here is what we’ve seen work well.
- Integrate the mental health program into your company culture by talking about it during team meetings, training your managers on mental health, and getting your company executives to talk about their own mental health experiences.
- Truly making mental health a priority, not just tacking on a mental health program as a company benefit.
- Ensure that your mental health program is holistic and supports all areas of employee wellbeing, including physical, mental, emotional, and financial health.
- Encourage company leaders to embrace an open mental health dialogue and use the mental health program themselves.
- Ensure the mental health program you provide employees is designed for high utilization (no middle-man to set virtual therapy appointments, etc.). Work closely with them to increase employee engagement with the platform.
Whether your company has a mental health program or not, these stats on the relationship between mental health programs and a positive ROI can help get your leadership team on board with your mental health initiatives.
Here are some helpful mental health program ROI calculators to see how a mental health program can benefit your workplace (plus, check out the one on our homepage).
- Mental Health Employer Cost Calculator by NSC
- Forrester’s Employee Mental Health Benefit Calculator
- The Depression Calculator for Employers by the APA
How We Got The Calculations on Our Homepage
Our homepage has a slider where you can see how your company is being impacted by mental health.
- Employees suffering from mental health challenges
- Increased productivity after implementing a mental health program
- Savings from a mental health program
Here's how we got there.
1. Employees suffering from mental health challenges
According to the APA Center for Workplace Mental Health, 5% of employees suffer from depression and are likely suffering from anxiety as well. We multiply the total number of employees at your company by 5% to get this number.
2. Increased productivity after implementing a mental health program
There are about 160 million people that are employed in the United States in 2022. Since about 5% suffer from depression and related mental health challenges, and 200 million days of productivity are lost due to depression each year (according to SHRM), about 25 workdays are lost per employee with depression each year.
Multiply 25 workdays lost per year by the number of people that are suffering from depression at your company (calculated in step one) to get the total days lost due to common mental health issues per year at your company.
Finally, according to the APA Workplace Mental Health (same source previously mentioned), depression treatment can reduce absenteeism at work by 60%. Multiply this by 25 (workdays lost per employee due to depression each year) by 60% to get 15, or the days in productivity regained after implementing a mental health program that addresses depression per employee.
Multiply 15 by the total number of employees suffering from depression at your company in step 1 to get how many workdays your company will gain back each year after implementing a mental health program.
3. Savings from a mental health program
We're in the home stretch! To calculate the final ROI of your mental health program, we factor in these stats:
According to the APA, the cost of depression per year for employers in America is $44 billion. 8 million employees suffer from depression each year (5% of the total number of workers in the USA). $44 billion divided by 8 million pans out to $5,500, the cost of depression per employee per year at your company.
Remember that the workdays lost per employee with depression each year is 25? Divide this by the annual cost of depression per employee ($5,500) to get $220, the cost per missed day due to depression per employee.
Almost there. All we need to do is multiple the workdays gained calculation (the final output from step 2) by $220 to get the potential money gained back after investing in a mental health program that treats depression.
Whew! We did it. That's how we came up with the ROI calculator.
Are you inspired to get a mental health program for your team? Try reading this article next: Your Guide to the EAP Implementation and Search Process.
By participating in/reading the service/website/blog/email series on this website, you acknowledge that this is a personal website/blog and is for informational purposes and should not be seen as mental health care advice. You should consult with a licensed professional before you rely on this website/blog’s information. All things written on this website should not be seen as therapy treatment and should not take the place of therapy or any other health care or mental health advice. Always seek the advice of a mental health care professional or physician. The content on this blog is not meant to and does not substitute for professional medical advice, diagnosis, or treatment.