Sainsbury Centre for Mental Health

Mental ill health costs UK employers £25billion, says new report

13 December 2007

Businesses across Britain are losing £1,000 a year for every person they employ because of mental ill health among their staff, says a report published today by the Sainsbury Centre for Mental Health.

Mental Health at Work: Developing the business case finds that the total cost to UK employers of mental ill health among their staff is over £25 billion. That is equivalent to £1,000 per employee in the workforce.

The costs comprise £8.4 billion in sickness absence, £2.4 billion to replace staff leaving their jobs and some £15.1 billion in reduced productivity among people still at work but unwell.

Mental Health at Work finds that mental ill health is a normal feature of every workplace and less than one-fifth of it is directly associated with working conditions.

On any day, one worker in five will experience mental distress. Mental health problems account for 40 per cent of sickness absence from work. The cost of reduced productivity among people who go to work despite being unwell (so-called 'presenteeism') is greater still.

Mental Health at Work finds that simple steps to improve the management of mental health in the workplace should enable employers to save 30 per cent or more of these costs - at least £8 billion a year. BT, for example, has reduced its mental health-related sickness absence rate by 30 per cent through its WorkFit strategy.

Dame Carol Black, the National Director for Work and Health, said: "Improving the support for mental health conditions came up time and time again during my Call for Evidence and it will be a central theme in my Review next year.

"Too often people only count the days lost to absenteeism. But as this paper highlights, presenteeism attributable to mental health accounts for 1.5 times as much working time lost as absenteeism. When bad management or inadequate support allows mental ill-health to develop at work, it's not just the employees who suffer. Poor mental health is poor business: it's just a fact."

Dr Bob Grove, Sainsbury Centre employment programme director, said: "The costs of ignoring mental health at work are astronomical. A small organisation with 50 staff will lose around £50,000 a year. The NHS is estimated to be losing £1.3 billion each year: equivalent to one quarter of its spending on mental health care.

"Employers need to be aware of mental health. It affects every workplace in the UK. It is a normal part of the human condition. Yet most employers vastly under-estimate how many of their staff will have mental health problems.

"Employers who take effective action to improve the wellbeing of their staff will reap the rewards for their efforts. They can take steps to reduce the risk of mental ill health among their staff. They can train and support line managers to respond quickly and effectively when staff do become unwell. And they can help staff who do need to take time off to get back to work when they are ready."