Benefits of a mentally healthy workplace

An integrated approach maximises the benefits

A mentally healthy workplace supports staff experiencing mental ill-health to stay at work and recover more quickly.

An integrated approach to creating a mentally healthy workplace is likely to lead to the greatest benefits for both organisations and people. While raising awareness can be a useful start, approaches to workplace mental health that are only awareness-based are less likely to have lasting impacts. Similarly, approaches that focus on a single intervention or initiative, or are not tailored to your organisation’s needs and context, are less likely to have sustained impacts.

Compliance with legislated requirements

Key elements of creating a mentally healthy workplace involve meeting legislated requirements. This includes being able to demonstrate how your organisation identifies psychosocial hazards (including by consulting with staff), takes steps to control and mitigate these hazards and continually reviews the effectiveness of these measures.

These laws are important for preventing mental ill-health that can develop, or be made worse, from exposure to psychosocial hazards. These are aspects of work design, environment and management that can negatively impact mental health.  

Other legislated requirements related to workers compensation, discrimination, privacy and industrial relations also help create a mentally healthy workplace.

Financial benefits

Responding to workers’ mental health challenges with early intervention and support can reduce costs for employers. A report from the Productivity Commission in 2020 showed workplace absenteeism (the inability to go to work) and presenteeism (the inability to fully function at work) due to mental ill-health cost the Australian economy between $13 billion and $17 billion each year.

A mentally healthy workplace may also reduce the likelihood of costly workers compensation claims. This is particularly important for psychological injuries, which often result in more time off work and higher claims costs. When injuries do occur, the duration of absence and experience of return to work are significantly improved when a worker returns to a mentally healthy workplace.

Non-financial benefits

Promoting mental health and wellbeing improves engagement, performance and productivity. Indeed, companies with robust strategies for mentally healthy workplaces have a competitive advantage in attracting and retaining employees. For example, employees who participate in company-sponsored wellbeing programs are often more likely to recommend their employer as a great place to work than those who cannot access such programs.

Positive return on investment

Economic modelling indicates a positive return on initiatives to create mentally healthy workplaces. One Australian report showed that on average, an organisation can expect a positive return on investment (ROI) of 2.3. That is, for every dollar spent on successfully implementing an appropriate action, the organisation gains $2.30 in benefits on average. While many factors can influence ROI figures, research suggests investing in mentally healthy workplace strategies generates returns. Realising these returns can take around 3 years of consistent and strategic focus.

Using data to create a business case for investment and track the impact of any new initiatives also makes it easier to identify the benefits associated with your mentally healthy workplace strategy.