• Print this Page

Element 1: Obtaining Management Support

Why should an organization care about employee mental health?

Changes to legislation are reflective of broader social, economic and political trends.  Mental health as a general public concern – and its role in the workplace – has garnered increasing attention over the past several years. One in five Canadians will experience a mental disorder in their lifetime.[1] Whatever the reason for this new awareness, mental illness and poor mental health is now being recognized as a business concern.

In order for workplace health promotion to be adopted, it must make a difference to the financial bottom line and be presented as a strategic priority to organizations. Taking a proactive approach to protecting employees’ mental health is the right move for organizations looking to keep a healthy staff team and a healthy budget. Over the past decade, enough Canadian research has been conducted to show that investing in the mental health of employees is beneficial in helping both the individual and the whole organization to achieve long-term excellence.

Business Case for Mental Health by ENWHP

Creating a business case for addressing mental health in the workplace

In order to begin the process of healthy workplace planning, it is important that all levels of the organization support the concept. Key organizational “players” who need to support the program are:

  • senior management/owners;
  • unions, employee associations;
  • employees;
  • other key stakeholders, such as occupational health, health and safety, human resources, benefits, training and development departments.

Often, obtaining management and labour support begins with the business case.

The economic costs of mental health problems in Canada are estimated at $51 billion per year.

Understanding the financial and human costs of workplace mental health is essential to helping organizations develop an action plan for improving employee well-being, and in turn, the business’ bottom line. Developing a business case is one way to urge the organization to create a workplace mental health promotion program. A business case can include the benefits to management and statistics related to benefits and costs, due diligence and legal requirements, and reasons why it will benefit employees. Often, examples from organizations with successful programs are also given.

When creating a business case, organizations can use a combination of pre-existing research and the organization’s own figures, such as disability and turnover rates, drug usage and absenteeism. Also the organization should consider the organizational culture of the workplace, specifically the policies and procedures that support or hinder employee mental health. Creating linkages between the research that has already been done and the organizational data demonstrates the benefits to promoting mental health. Organizations should set aside enough time to make a strong case, as gathering the necessary data can be time intensive.

Mental health disorders have earned the status as the fastest growing cause of disability on a global scale.

To help support the business case, data is presented below on the financial, legal and health care costs associated with poor mental health in the workplace. A printable document containing these statistics and figures is available in Appendix A.

The FINANCIAL case for workplace mental health promotion

Every year, the Canadian economy loses billions to mental health issues

  • Workplace mental health disorders cost Canadian companies nearly 14 percent of their net annual profits and up to $16 billion annually.[2]
  • More recent calculations, which include indirect costs (i.e., presenteeism), suggest that upwards of $51 billion is lost to the Canadian economy annually due to mental health and addiction issues (i.e., depression, anxiety, burnout, substance misuse).[3]
  • $34 billion is the cost of mental illness and addictions to the Ontario economy.[4]
  • Mental disorders are the leading cause of disability in the U.S. and Canada for people ages 15 to 44 years.[5]
  • In 2005, mental disabilities such as stress and depression were the leading cause of disability in the labour force, which accounted for over $8 billion in productivity losses 2006.[7]
  • Mental health (primarily depression and anxiety) has surpassed cardiovascular disease as the fastest growing category of cost for disability claims in Canada.[8]
  • 75 percent of all short-term disability claims and 82 percent of long-term disability claims in Canada are related to mental illness.[9]
  • The amount an employer will save, per employee per year, for those who get treatment is from $5000 – $10, 000 on average in wage replacement, sick leave and prescription drug costs.[10]
  • A study, released in 2004 by the Public Health Agency of Canada, identified that 58 percent of employees report having work-life conflict; being overwhelmed by their jobs, families or finances.[11]
  • Mental illness is the second leading cause of disability and premature death in Canada.[6]
  • PriceWaterhouseCoopers 1999 International Student Survey found 57 percent of graduating business students rated work-life balance as their primary career goal and therefore influential in choosing an employer.[12]

Assessment of costs relating to stress and psychosocial risks[13]

Costs Category Data
Quantitative Qualitative
Linked to absenteeism Days lost Benefits paid to the absent employeeProfessional health insurance contributionsOvertime for colleagues Management and hu­man resources’ time
Replacement of absent employee Job advert fees and temporary staff agency feesExtra salary costs for insecure jobs Recruitment, training and apprenticeship timeExtra work for colleagues during the transitory periodSlowing of pace/decline in results
Linked to Presenteeism Drop in productivity Penalties linked to extended deadlines More errorsReduced qualityDrop in innovationLoss of ability to win a market / satisfy clientsManagement’s time spent on adaptations within the teamTarnished image for clients / groupReduced attractiveness of company

Management and human resources time

Risks linked to a decline in collective and interpersonal relationships (harassment, conflicts with management, etc.) Legal fees: lawsuits and grievances
Stress-related industrial accidents Increase in costs of resulting absenteeismIncrease in work insurance premiumsRise of benefits for work stoppages

This chart can be used as a template. Organizations should use their own data to create realistic estimates of the costs of stress and psychosocial risks.

Information:
Tools:
  • Building a Business Case is a PowerPoint template created by THCU. See http://www.mdfilestorage.com/thcu/pubs/977287265.ppt.
  • Mental Health Leadership Framework is a website designed to take top leaders of organizations quickly through the business case for creating a mentally healthy workplace. Included in this website are tools and information for implementing workplace mental health strategies. See http://www.mhccleadership.ca/.
  • Business Results Through Health and Safety is a guidebook developed by the Workplace Safety and Insurance Board (WSIB) is designed to:
    • help organizations calculate the direct and indirect costs of poor health and safety in the workplace and understand why addressing and improving employee health and safety can lead to shareholder value, improved operations and better bottom line results;
    • allow organizations to evaluate the business benefits of improving their management of health and safety;
    • provide guidance and tools with which employers and others can conduct self assessments to identify strengths and weaknesses of how their health & safety system contributes to the bottom line.

The LEGAL case for workplace mental health promotion

“Taken as a whole, the law is imposing increasingly restrictive limitations on management rights by requiring that their exercise should lead, at a minimum, to no serious and lasting harm to employee mental health.” [14]

The legal case for workplace mental health promotion rests on the notion that a mentally healthy and supportive environment is less likely to actively contribute to mental harm and injury. According to Dr. Martin Shain, a leading researcher in workplace mental health, there was a 700 percent increase in court-awarded settlements due to mental injury in Canadian workplaces between 2003 and 2008.[15]

Today, legislation is evolving to find employers increasingly responsible for their employees’ mental and physical health. Employers can be found liable for psychological injury to employees.  In 1995 a judge ruled that “there is no logical reason why risk of psychiatric damage should be excluded from the scope of an employer’s duty of care….” For more information on this case see the Walker vs. Northumberland County Council Case Study below. Since then, this opinion has been growing. The reputation of an organization can be tarnished if legal action is taken. And, the organization may be forced to pay significant legal fees.[16]

It is not the responsibility of an organization to diagnose a mental health problem. However, organizations are responsible by law for supporting employees with mental illness. According to the Canadian Human Rights Code, accommodation is required when an employee’s disability results in “functional limitations” preventing them from performing an “essential duty” of their job.[17] Accommodations are “reasonable” so long as they don’t impose “undue hardships” on the employer, and recent Supreme Court of Canada decisions have placed the burden on employers to demonstrate how providing accommodations will cause undue hardship, usually by compromising safety or jeopardizing the organization’s solvency.[18]

Employers may soon face litigation based on the lack of due diligence that creates excessive stress for employees.[19] As well, an unhealthy employee may threaten the safety of others. As employees become more stressed, they become more likely to be involved in workplace accidents and sustain injuries.[20] By providing a healthy workplace environment, employers protect themselves from liability charges related to exposure to an identified workplace hazard.

According to Guarding Minds @ Work, what has been punishable by law has expanded considerably. The range of unacceptable behaviours now spans from incivility and passive-aggressive behaviours, such as mobbing, to bullying, violence and harassment. Essentially, new legal standards are not permitting conduct that would have been tolerated less than a decade ago.[21] Therefore, it is prudent for all employers to proactively promote the creation of a mentally healthy workplace.

Case Study: Walker vs. Northumberland County Council case[22]
Situation: As a social worker, Mr. Walker had worked in the field for fifteen years with no prior history of mental illness. With a sudden increase in workload, he frequently communicated his concerns and requested more staff, but due to financial reasons, these needs were not met. Walker experienced a nervous breakdown and took a sick leave. Prior to his return to work, accommodations for Walker were agreed upon; however, these accommodations were not followed through. He experienced a second breakdown five months later. Following his second illness, he was unable to return to work.

Result: Walker successfully sued his employer for negligence on the grounds that the accommodations required by Walker in his return to work were not met, putting him in a situation of ‘foreseeable’ psychological harm, which ultimately resulted in his second nervous breakdown.

To read the whole case study, visit Walker versus Northumberland: Smithfield Performance Limited: stress litigation at http://www.smithfieldperformance.co.uk/articles/rcw/rcwSL/rcwSL001.

Information:
  • Best Advice on Stress Risk Management in the Workplace, by Health Canada, is a presentation that was intended to both increase awareness and encourage action on the risks to health and safety posed by toxic stress in the workplace.
  • See http://www.hc-sc.gc.ca/ewh-semt/pubs/occup-travail/stress-part-1/index-eng.php.

  • Stress at Work, Mental Injury and the Law in Canada is a discussion paper from the Mental Health Commission of Canada. This report provides a detailed overview of the legal regulations facing employers with respect to stress and mental health in the workplace.
  • Rights and Responsibilities, by Mental Health Works, provides a brief overview of employers’ rights and responsibilities when it comes to responding to employees mental health issues. See http://www.mentalhealthworks.ca/employers/rights_and_responsibilities.asp.

The HEALTH case for workplace mental health promotion

  • 500,000 Canadians miss work every day because of psychiatric problems. Mental health problems account for nearly 30 percent of disability claims and 70 percent of the total costs.[23]
  • In the past two years, 21 percent of all workers have experienced physical health problems caused by stress, anxiety or depression. Approximately one in five of these workers experienced fatigue, sleeping problems, anxiety or depression.[24]
  • People experiencing stress are more likely to report hypertension, anxiety or depression and obesity.[25]
  • 62 percent of workers who suffered from physical problems caused by stress, anxiety or depression tried their best to maintain their usual work schedule. However, when outside of work, most (59 percent) could not keep up their usual pace and needed more rest.[26]
  • Close to four in 10 workers (37 percent) who reported experiencing physical problems but did not take time off work said they continued to work because they need the income (called “presenteeism”).[27]

Prevention and early identification of mental health problems can aid in and improve the recovery process. The first two to three months are critical to successful treatment and preventing mental health problems from becoming chronic.[28] When issues are identified early, the person experiencing the mental health issue has a higher likelihood of recovery.

Reducing the prevalence of mental health problems in a workplace could reduce the probability of other health issues developing. Once mental health has been adversely affected, mental health influences the likelihood that future physical health and safety problems will emerge. Physical and mental health problems can add to an individual’s stress and cause more issues.

Wheel of HarmThe diagram to the right shows the Wheel of Harm. It illustrates how various outcomes of health can be connected by mental health problems.[29] The asymmetrical lines within the circle show areas where there are connections between the outcomes of poor mental health. Knowing that mental health problems are connected to so many negative outcomes makes it clear that prevention and early interventions can help in reducing the amount of stress an employee will face. It can allow them to protect and promote their own mental and physical health.

Addressing mental health problems in the workplace is a financially sound idea. More than half of all accommodations cost less than $500 each. Most employers report benefits in excess of $5,000 in return for putting that accommodation into place.[30] Employees who were diagnosed with depression and who took the appropriate medication saved their employer an average of 11 days a year in prevented absenteeism.[31]

Gaining management support

The goal is to gain enough support to establish a healthy workplace committee, to undertake a situational assessment and to develop a program plan. The situational assessment provides a clearer picture of the organizational and employee needs and interests and will inform the planning and decision making. Once the information is gathered and a plan is developed, re-affirm management support. Obtaining support twice will ensure the efforts are maintained and sustained.

Information:

[1] Government of Canada, The Human Face of Mental Health and Mental Illness in Canada, 2006.

[2] Mental health and substance use at work: Perspectives from research and implications for leaders. 2002. Scientific Advisory Committee to the Global Business and Economic Roundtable on Addiction and Mental Health. http://mentalhealthroundtable.ca/jan_2003/mentalhealth2_nov11_021.pdf (accessed February 12, 2010).

[3] Ibid

[4] The Centre for Addiction and Mental Health, “The Economic Costs of Mental Disorders, Alcohol, Tobacco, and Illicit Drug Abuse in Ontario,” (2000), http://www.camh.net/Research/Research_publications/COI%20FACT%20SHEET_revisedfinal.pdf (accessed February 12, 2010).

[5] The World Health Organization. 2004. The World Health Report 2004: Changing History, Annex Table 3: Burden of disease in DALYs by cause, sex, and mortality stratum in WHO regions, estimates for 2002. Geneva: WHO. http://www.who.int/whr/2004/annex/en/index.html. (accessed February 12, 2010).

[6] Institute of Health Economics. 2008. How Much Should We Spend on Mental Health?. http://www.ihe.ca/publications/library/2008/how-much-should-we-spend-on-mental-health-/ (accessed February 12, 2010).

[7] Global Business and Economic Roundtable on Addiction and Mental Health. Business and Economic Plan For Mental Health and Productivity, (2006) http://www.mentalhealthroundtable.ca/ (accessed February 12, 2010).

[8] M. Wilson, R. Joffe, & B. Wilkerson, The unheralded business crisis in Canada: Depression at work. Global Business and Economic Roundtable on Addiction and Mental Health, (2002). p. 4, 18. http://www.mentalhealthroundtable.ca/aug_round_pdfs/Roundtable%20report_Jul20.pdf.

[9] Watson Wyatt, “Mental Health claims on the rise in Canada,” Staying @Work Survey, (2005) http://www.watsonwyatt.com/news/press.asp?ID=14547 (accessed January 6, 2010).

[10] Mental Health Works.  “Mental Health Fact Sheet.” Canadian Mental Health Association. www.mentalhealthworks.ca/facts/index.asp (accessed February 12, 2010).

[11] C. Higgins, L. Duxbury and K. Johnson, Exploring the Link Between Work-Life Conflict and Demands on Canada’s Health Care System,” Public Health Agency of Canada, (2004) http://www.phac-aspc.gc.ca/publicat/work-travail/report3/index-eng.php.

[12] Human Resources and Skills Development Canada, “The business case for work-life balance,” (2005), http://www.hrsdc.gc.ca/eng/lp/spila/wlb/16benefits_costs_businesscase.shtml (accessed November 30, 2009).

[13] European Network for Workplace Health Promotion, Assessment of costs relating to stress and psychosocial risks taken. A guide to the business case for mental health, (2009), http://www.enwhp.org/fileadmin/downloads/8th_Initiative/MentalHealth_Broschuere_businesscase.pdf (accessed December 18, 2009).

[14] Shain, M.  Stress at work, mental injury and the law in Canada: A discussion paper for the Mental Health Commission of Canada. (2009) http://www.mentalhealthcommission.ca/SiteCollectionDocuments/Key_Documents/en/2009/Stress%20at%20Work%20MHCC%20V%203%20Feb%202009.pdf.

[15] Ibid

[16] Martin Shain, “What Do We Know? Best Advice on Stress Management in the Workplace,” Health Canada, (2000) http://www.hc-sc.gc.ca/ewh-semt/pubs/occup-travail/index-eng.php (accessed January 6, 2010).

[17] Mental Health Works. “Rights and responsibilities.” http://www.mentalhealthworks.ca/employers/rights_and_responsibilities.asp

[18] Ibid

[19] Public Health Agency of Canada, “The Impact of Stress on Employees,” http://www.phac-aspc.gc.ca/alw-vat/why-pourquoi/stress-eng.php (accessed December 2, 2009).

[20] Martin Shain, “What Do We Know? Best Advice on Stress Management in the Workplace,” Health Canada, (2000) http://www.hc-sc.gc.ca/ewh-semt/pubs/occup-travail/index-eng.php (accessed January 6, 2010).

[21] Guarding Minds @ Work. “The Legal & Regulatory Case.” (2009) http://www.guardingmindsatwork.ca/docs/The%20Legal%20Regulatory%20Case%20for%20Psychological%20Safety%20Health.pdf. (accessed December 3, 2009).

[22] A. Sprince, “Recovering damages for occupational stress: Walker v. Northumberland County Council,” The Liverpool Law Review (1995): 27.

[23] Insurance Journal 2003 as cited by the Government of Canada in The Human Face of Mental Health and Mental Illness in Canada, 2006, p.41.

[24] Desjardins Financial Security. “Health is Cool! 2006 Survey on Canadian Attitudes towards Physical and Mental Health at Work and Play.” (2006) http://www.dsf-dfs.com/en-CA/_Utilitaires/Prmtns/HlthCl.htm (accessed December 2, 2009).

[25] American Psychological Association. “Americans engage in unhealthy behaviours to manage stress.” (2006) http://www.apa.org/news/press/releases/stress/index.aspx (accessed December 2, 2009).

[26] Desjardins Financial Security. “Health is Cool! 2006 Survey on Canadian Attitudes towards Physical and Mental Health at Work and Play.” (2006) http://www.dsf-dfs.com/en-CA/_Utilitaires/Prmtns/HlthCl.htm (accessed December 2, 2009).

[27] Ibid

[28] M. Wilson, R. Joffe, & B. Wilkerson, The unheralded business crisis in Canada: Depression at work. Global Business and Economic Roundtable on Addiction and Mental Health, (2002). p. 4, 18. http://www.mentalhealthroundtable.ca/aug_round_pdfs/Roundtable%20report_Jul20.pdf.

[29] Shain, M. “What Do We Know? Best Advice on Stress Management in the Workplace.” Health Canada (2000).  www.hc-sc.gc.ca/hppb/ahi/workplace. (accessed September 5, 2009).

[30] US Department of Labor. “Accommodation and Compliance Series: Employees with Mental Health Impairments”. Job Accommodation Network.” (2009). http://www.jan.wvu.edu/media/Psychiatric.html (accessed February 12, 2010).

[31] M. Wilson, R. Joffe, & B. Wilkerson, The unheralded business crisis in Canada: Depression at work. Global Business and Economic Roundtable on Addiction and Mental Health, (2002). p. 4, 18. http://www.mentalhealthroundtable.ca/aug_round_pdfs/Roundtable%20report_Jul20.pdf.