In any given year, 1 in 5 people in Canada will personally experience a mental health problem or illness. Few executives or business owners would deny the importance of their workforce but despite the acknowledged strategic importance of this critical human asset, too few executives, owners, or managers stop to consider the psychological condition or mental wellbeing of their employees. Yet an overwhelming body of evidence suggests they should.

By 2041, it is estimated that the cumulative cost of poor mental health to the Canadian economy will exceed $2.5 trillion. There are also indirect costs related to poor mental health in the workplace, such as absenteeism, presenteeism, and challenges with recruitment and retention. The human cost for employees who are directly impacted by mental illness can be great. Stigma and discrimination can make employees hesitant to disclose their mental illness at work and can prevent them from getting the help that they need.

Many human resources executives are seeing disability claims attributable to mental illness emerge as the fastest-growing category of insurance costs. One in three workplace disability claims in Canada are related to mental illnesses. 70% of disability costs are attributed to mental illness. Mental health is the top concern for a post-pandemic post-COVID workforce, according to a 2021 health-care survey by Benefits Canada.

In addition to being the fastest growing category of short-term disability (STD) and long-term disability (LTD), Canadian research7 suggests that disabilities due to mental illness are also, on average, the longest and have the highest costs. On average, a disability episode lasted for 33 days, which a cost of about $9,027. In contrast, disability episodes for mental/behavioural illness were the longest and lasted 65 workdays with an average cost of about $18,000.

Lost productivity takes the form of both absenteeism and presenteeism. Absenteeism occurs when an employee is unable to be present at work due to mental illness while presenteeism occurs when employees are at work but experiencing illness-caused impairment resulting in reduced performance and productivity. A significant body of research indicates that presenteeism is a much larger and growing problem for employers and may count for up to 70% of all mental illness-related lost productivity costs. Absenteeism costs, although huge, are just the tip of the iceberg.

Medically depressed employees with reduced productivity due to unrecognized and untreated cognitive and emotional impairment, affect everyone. Co-workers experience mounting stress from increased workloads. Managers juggle work priorities and resources. Increased demands can cause employee dissatisfaction, and the burnout of top performers who take on too much of the work of others, while Owners and Executives worry about how to control their organization’s growing costs. Untreated mental illness rips through organizations, touching multiple employees along a delivery continuum. Swift and early intervention is vital to reduce costs and improve mental health and organizational outcomes.