The modern workplace demands more from employees, yet personal and workplace stress often limit their potential. With millions facing anxiety and depression, over two-thirds of employees lack access to proper mental health care. Organizations must adopt comprehensive mental health programs to support employees, as poor mental health impacts productivity, culture, and long-term success. Addressing mental health is both a moral responsibility and a business necessity.
The hidden costs of ignoring mental health in the workplace
Untreated mental health conditions affect every aspect of an individual’s life, impacting well-being, behavior, and workplace performance. For employers, the financial toll is significant but often overlooked. Without addressing mental health challenges, these issues can escalate into substantial costs. Here’s how untreated mental health conditions impact organizations.
The cost of neglecting mental health
Ignoring mental health in the workplace affects well-being, relationships, and productivity, costing businesses billions each year. Untreated mental health issues cost organizations $60,000 annually per employee, while low morale contributes to $550 billion in nationwide losses. Investing in mental health support is essential for a healthier, more productive workforce.
Declining productivity
Mental health struggles lead to a 35% drop in productivity and $210.5 billion in annual economic losses in the U.S. Despite the lower cost of mental health treatment, many employees avoid seeking help due to stigma or financial barriers. Addressing these challenges is vital for improving workplace efficiency and well-being.
Employee absenteeism
Absenteeism, often tied to depression, is a major workplace issue. Symptoms like difficulty concentrating and loss of interest result in an average of 31.4 missed workdays per year. Employees with mental distress are also more prone to substance use disorders, further increasing absenteeism. This costs businesses an estimated $340 per missed day, underscoring the need for mental health support.
Presenteeism
Untreated mental health conditions also lead to presenteeism, where employees work while unwell, reducing productivity and increasing risks. This hidden issue causes an average of 27.9 lost productive days per employee annually.
Turnover costs
Many employees feel their jobs negatively impact their mental health, and more than half lack access to support services. Untreated mental health issues often lead to absenteeism, presenteeism, and toxic workplace environments, driving turnover. Replacing employees is far costlier than retaining them, costing U.S. businesses $1 trillion annually. These costs include direct expenses like recruiting and training, as well as indirect effects such as decreased productivity and morale. Let’s break down these costs:
- Impact on remaining employees: When an employee leaves, their workload is redistributed, increasing pressure on colleagues. This can lead to burnout, lower morale, and more absenteeism, further disrupting workplace efficiency.
- Recruitment costs: Hiring new talent is expensive. The Society for Human Resource Management (SHRM) estimates the average cost per hire is nearly $4,700. Professional recruiters, while helpful, charge 15–20% of the new hire’s first-year salary.
- Training costs: New employees require time to adapt. On average, companies spend 46.7 hours training each new hire, costing around $986.
- Loss of institutional knowledge: Long-term employees carry valuable company knowledge. When they leave, it takes new hires nearly 200 hours to replicate their predecessors’ work. This knowledge gap costs U.S. businesses $47 million annually in lost productivity.
Reducing turnover through mental health support
Employee turnover is a preventable expense. Providing a healthier workplace and strong mental health support reduces costs and boosts retention. In fact, 79% of employees are more likely to stay at companies offering quality mental health benefits. Investing in well-being strengthens engagement, morale, and long-term success.
