This report outlines the technical background to the return on investment (ROI) analysis for creating a mentally healthy workplace. The aim of this analysis is to estimate the ROI for employers investing in a mentally healthy workplace. Accordingly, the analysis:
- estimates the cost to employers of mental health conditions
- estimates the costs and the ROI for implementing workplace mental health actions using an economic model and simulating different scenarios based on the workplace environment
Mental health conditions are a real and significant issue that impact individuals, organisations and the broader community. As such, organisations of all sizes have a role to play in providing a mentally healthy workplace for all employees. Many workplace-specific actions designed to promote mental health have been developed nationally and internationally, and have been proven to be effective.
- Mental health conditions present substantial costs to organisations. However, through the successful implementation of an effective action to create a mentally healthy workplace, organisations, on average, can expect a positive return on investment (ROI) of 2.3. That is, for every dollar spent on successfully implementing an appropriate action, there is on average $2.30 in benefits to be gained by the organisation. ?
- These benefits typically take the form of improved productivity, via reduced absenteeism and presenteeism (reduced productivity at work), and lower numbers of compensation claims. ?
- Implementing multiple targeted actions is likely to lead to further increases in ROI, noting that the cumulative benefits of multiple actions will be less than their sum as actions may apply to the same group of employees. ?
- The productivity gains generated from different actions may vary depending on the industry and size of an organisation. ? Actions tend to be more effective when implemented in smaller sized organisations because the single most critical success factor is employee participation. This may mean that actions are best implemented on a team or group basis in larger organisations. ?
- In order to achieve a positive ROI, organisations will need to have addressed the critical success factors for change. In particular, implementing one or several actions is unlikely to be effective unless there is leadership and management support for improving the culture and mental health of the workplace.