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Why mental health must be on your HR agenda in 2021

By 03/02/2021April 11th, 2024Employee Wellbeing, Mental Health
Why mental health must be on your HR agenda 2021

According to the Mental Health Foundation, more than eight in ten (82%) of UK adults have experienced stress because of COVID-19. A further 42% of employees wish to experience less anxiety at work during 2021.

Although the world has unashamedly drawn the curtain on 2020, there is no denying the year was full of mental health worries, isolation and loneliness. To combat this, HR leaders will need to integrate new ways of promoting and supporting good mental health in the workplace while eliminating the challenges caused over the past year.

But with the mental health landscape changing enormously in recent times, where does HR begin? In our sought-after HR Expert series, Founder of PsycHR, Helen Pericleous provided key insight into building an employee wellbeing strategy that will help tackle the heart of mental ill health in the workplace.

The landscape of mental health at work


Helen Pericleous, PsycHR quote on employee wellbeing

Based on an independent review on the effects of mental health in the workplace, the Government, with Stevenson and Farmer’s help, outlined the impact to employers, the labour market, and cost to the UK economy.

The average cost of mental health to the UK economy is £86.5 billion (range between £74-99 billion), with the cost to the UK Government averaging to £25.5 billion (range between £24-27 billion). The contributing factors involve the cost of benefits, the shortfall in income tax, the national insurance being paid to the HMRC and the services being provided by the NHS.

On the flip side, the cost to employers is averaging to £37.5 billion per year (range between £33-42 billion), and that was calculated by totalling the cost of sickness absence, presenteeism (a person who is engaged at work, but not to their full capabilities due to mental health issues) and staff turnover based on mental health.

The report also highlighted a significant concern: 300,000 people who suffer from long-term mental health problems lose their job each year. In contrast, Deloitte found that employer costs have increased by £6 billion per year (rising by 16%), costing an organisation £3,300 per employee.

However, the research delved further into the estimated cost of mental health for a number of industries, providing a low and high estimate per employee. These figures are fascinating in themselves, and provide a solid foundation to analysing a baseline for ROI on mental health initiatives.

  • Finance, insurance and real estate = £3,245 – £3,535
  • Information and communication = £2,175 – £2,573
  • Professional services = £2,108 – £2,398
  • Transport, distribution and storage = £2,436 – £1,879
  • Other private services = £1,426 – £1,601
  • Retail and wholesale = £1,045 – £1,601
  • Hotels, catering and insurance = £702 – £769

Mental Health 2021 Infographic How to build an employee wellbeing strategy


Helen Pericleous, PsycHR quote on mental health strategy

  1. Data

The purpose of data in a mental health strategy is to identify, measure and improve. This will allow you to quantify mental health by using your absence reports, sickness reports, the standard measure of presenteeism, use company-wide surveys and utilise the feedback you receive from them.

Importantly, it would be best if you always looked to take a measurement of your company before you plan, so you have a better understanding of how to organise your interventions around your company’s data.

In this instance, if a manager needed more practical skills training, a department was identified to have a high level of absences, or if exit interviews suggest there’s a cultural stigma, you’ll have the required data to make a direct impact on these cases.

  1. Plan

Part two is all about precise planning, establishing the foundations of what you want to achieve from your strategy. During this stage, think about the timescales and the type of interventions you might want to include. Consider the budget, gain cost approval and most importantly, outline if you want to keep your plan centralised with the board of directors, or send out internal communications.

Don’t forget to include a pledge, a message from management and provide updates to employees, so they are kept informed about any changes and are fully aware of what is expected from the strategy.

  1. Implement

In this step, you’ll be putting your outlined plans in place, implementing crucial interventions that could potentially cover mental health awareness training for the company, practical skills for managers, reviewing your policies and procedures to ensure they are fair and do not discriminate in any form.

For example, look out for extended leave policies. If there’s a clause in there which says you’re only eligible to take extended leave if you have a low number of absence days in the last 12 months, this could amount to a claim because of indirect discrimination.

Why? Because those with mental health struggles are more likely to have had a higher level of absence, and so the policy disadvantages a particular group based on that particular characteristic. Other initiatives can be encouraging openness and de-stigmatisation, selecting ambassadors across different regions or organising a well-being day for the company.

  1. Analyse 

This is where you collect data based on the implementations. For instance, how many people attend training? How many managers received practical skills? Importantly, you can run your wellbeing survey again to identify if there’re more perceived support and run absence reports to see if there has been any reduction.

Analysing a strategy is a key way to measure the effectiveness of interventions and provides the underlining statistics which will later help to showcase the ROI of your mental health activities.

  1. Report 

Now, the final stage of building a mental health report is to pull all of your information together to report back to your board of directors, stakeholders or employees in an annual or wellbeing report.

In broadcasting your report, you’ll want to include certain elements which will contribute to the success of the outreach and understanding of the information conducted.

  • Why was this mental health journey embarked on?
  • What are the plans you aim to achieve based on the report?
  • What initiatives have been implemented?
  • The statistics around engagement with the initiatives.
  • Outline key successes i.e. sickness absence has reduced by 30%.
  • Commit to continuing to support mental health in the workplace.
  • Share future ideas and plans beyond the report.

Measuring the ROI of your mental health initiatives


Helen Pericleous, PsycHR quote on the ROI of mental health initiatives

So, we’ve established the costs which make up the ROI for mental health initiatives, but how exactly do we calculate the ROI? The most common formula used is either benefits – costs / costs = ROI or ROI = benefits / costs.

To put this into practice, you would take and measure the total of cost of poor mental health to you as the employer pre-intervention, then take the total cost of your intervention. Then remeasure the total cost of poor mental health after the intervention using the same variables, and the difference is shown by your improvement.

If you put this improvement above the intervention’s costs, divide the difference by the original total cost and multiply it by 100, this will give you your percentage improvement, which you can now divide by 100 to get your ROI.

In this report by Deloitte, they outlined which type of mental health intervention was producing the highest average ROI.

Awareness training = 5.3:1

Training = 6.3:1

Screening/diagnostics = 6.3:1

Therapy/treatment = 2.6:1

According to the systematic review of the 25 interventions, the most successful had the following four criteria: company-wide awareness, practical skills for managers, cultural change and personalised programs with recommendations. These core activities can all be implemented in your own mental health strategy to achieve the highest ROI and significantly enhance employee wellness.

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