Workplace mental health programs drive significant ROI, Deloitte finds

05 November 2019 4 min. read

A recent report from consulting firm Deloitte has found positive returns on investment (ROI) for mental health initiatives in Canadian businesses. The report examined data from seven large Canadian companies, and found that median yearly ROI on mental health programs in place for one year was $1.62 for every dollar spent, while programs in place for at least three years had a median ROI of $2.18.

Business costs resulting from poor mental are sizable, with the annual economic cost estimated to be approximately $50 billion per year, with direct costs related to health care, social services, and income support. Additionally, $6.3 billion in indirect costs stem from lost productivity, with 500,000 Canadians unable to work each week because of mental health problems or illnesses.

To address the issue, the government in 2013 published the National Standard for Psychological Health and Safety in the Workplace (the Standard) to give businesses a framework with which to promote workplace mental health and prevent psychological harm.

Workplace pressure is the leading cause of stress on Canadian workers, and as such, has a tremendous impact on mental health.

Mental health issues account for 30-40% of short-term disability (STD) and 30% of long-term disability (LTD) claims in Canada, with claims for mental health issues climbing 0.5-1% every year.

Despite the costs of productivity losses and regulatory “suggestion,” only one-third of Canadian employers have a mental health strategy in place, and most of those companies are not measuring outcomes. The Deloitte report (“The ROI in workplace mental health programs”) revealed that for several companies, the study was the first time they collected data on their mental health program outcomes.

The cost of poor mental health

The wider body of research on the issue suggests that programs with mental health intervention, access to clinical treatment, and support managing disability services help to reduce absenteeism and improve productivity. A study of S&P 500 Index companies, for example, found that those with a high health and wellness scores (based on associated programs in the workplace) appreciated 235% compared to the overall average of 159% appreciation.

The Deloitte report, meanwhile, surveyed the historical investment and savings data from seven large Canadian companies, including Air Canada, Bell, and CIBC. The median ROI on mental health programs was $1.62 per dollar spent for programs that had been in place for one year, and $2.18 for those in place for three or more years, suggesting added returns as programs mature.

"There's both an economic and moral imperative for Canadian employers to take action, recognizing that the cost to the Canadian economy of poor mental health in our workplaces is estimated to be $50 billion annually," said Anthony Viel, CEO of Deloitte Canada. "The findings from this report provide a business case that is impossible to ignore. Organizations committed to delivering and measuring impactful employee wellness programs are creating healthier workplaces and seeing investments in their people's mental health pay off."

Effective workplace mental health programs typically include a combination of leadership training, education initiatives, employee and family assistance programs (EFAP), psychological care benefits, processes for leaving and returning to work, and policies that promote mental wellbeing.

Bell leading the way

The case of Bell is illustrative, with the firm taking an early step forward with its 2010 “Bell Let’s Talk” initiative supporting mental health – which included investments in the mental health of its workers. The firm greatly expanded its benefits coverage for psychological care with support through EFAP, along with mandatory leadership training and an enhanced return-to-work (RTW) program.

As a result, the firm recorded a 190% increase in EFAP utilization since 2010, along with a 20% decrease in short-term disability claims related to mental health. Its enhanced RTW program, meanwhile, has helped reduce mental health-related short-term disability relapse and reoccurrence by 50% since 2010.

Deloitte has a few recommendations for companies embarking on a mental health program. Companies should first measure their baseline data to take stock of existing initiatives, since many might not realize they have certain tools already in place.

The new programs are more likely to achieve positive ROI if they support the entire spectrum of mental health – from preventative measures and removal of workplace hazards, to intervention, care, and return-to-work.

Companies can also achieve greater ROI by focusing on high-impact areas such as leadership training and psychological care benefits, according to the report. Performance measurement is another important element, since it better enables companies to achieve desired program impact, improve adoption rates, and tweak parameters if something isn’t working.