CEDA – Mental Health and the Workplace. How can employers improve productivity through wellbeing?

Poor mental health is a cost to individuals, the community and the economy. The evidence shows that workplaces that invest in staff mental health have increased productivity, reduced absenteeism and more engaged staff.

This report by the Committee for Economic Development of Australia (CEDA) focuses on the interventions and investments that businesses can make to improve productivity through wellbeing. CEDA aims to shift the conversation about mental health in the workplace to focus on the foundational elements of a mentally healthy workplace, including:

  • Good job design
  • A supportive organisational and leadership culture
  • Strong management capability.

Poor mental health costs the Australian economy around $70 billion every year (Productivity Commission 2020).

There is growing recognition that workplace health and safety is broader than physical safety – psychological health is just as important. However, this is much less straightforward for workplaces to address than physical safety and there is limited guidance available. Workplace responses to mental health are therefore often fragmented and lack evidence and evaluation

It is estimated that 3.5 million Australians have mild to moderate mental health issues.

Because of its size, this cohort likely has the largest economic and social impacts on the community. It is also an area where workplaces can have the most impact. Australian businesses have been very successful in prioritising physical safety in the workplace in recent decades. Overall, serious workers compensation claims in Australia have fallen over the last two decades, while in stark contrast, claims for mental health conditions have increased. With even moderate growth assumptions, projected mental health-related claims are set to double by 2030. However, given the likely impacts of COVID-related disruptions, job instability and working-from-home these growth rates may escalate further.

Investing in the mental health of employees is a sound business decision, leading to increased productivity and business outcomes.

The available evidence suggests that the best returns are from businesses focusing on prevention and early intervention. Based on evidence and consultation with experts, CEDA propose a framework for organisations that focuses on building strong foundations – through good job design, strong management capability and a supportive organisational culture. This will assist in preventing mental ill health before it becomes a problem. It requires appropriate support for all in the organisation to thrive, and individualised support for those that need it.

The report makes a number of recommendations.

Download the report here.

Productivity Commission (2020), Mental Health

November 2022