Employee mental health care costs the economy ‘R250 billion’ per year. Here’s why

Many of the working class around the world struggle with common mental health issues such as stress, anxiety, depression, substance abuse and burnout.

Employees’ mental health problems can be caused by several factors, including their work environment, relationships with colleagues and work-life balance.

Dr. Frank Magwegwe, lead researcher and senior lecturer at the Gordon Institute of Business (Gibs), says employee mental health challenges are costing the economy an estimated R250 billion in lost productivity per year, affecting the gross domestic product (GDP) of South Africa decreases by no less than 4.5%. every year.

Gibs released its Health Workplace Well-Being Report in October. According to the report, most employees do not express their mental health concerns due to a lack of supportive policies in the workplace.

State of employee mental health in the country

Gibs’ report examined six domains: mental, physical, financial, social, emotional and work.

It shows that there is a stigma attached to experiencing mental health issues, which continues to prevent many employees from disclosing and addressing their wellbeing issues.

Alon Lits, co-founder of October Health, says their data shows that well-being is improved in workplaces where employees feel comfortable sharing concerns without fear of negative consequences.

“Therefore, normalizing experiences of stress, anxiety and depression, promoting open communication around wellbeing topics and proactively providing resources to employees help create a work environment that improves productivity and performance.”

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How employers can contribute to the mental health of employees

Dr. Magwegwe believes that leaders and managers in the workplace can directly influence the mental and emotional state of employees.

There should be initiatives that can promote employee wellbeing, which will result in greater productivity and resilience in the workplace. This will be achieved through lower absenteeism, better employee engagement and a supportive working environment.

“When employees feel supported, they are more likely to perform at their best, be highly engaged and remain loyal to the organization that provides not only employment and security, but also a sense of purpose and fulfillment.”

Racial differences play a role in employee mental health

The report shows that age, gender and income do not have a significant direct impact on the overall well-being of employees. However, racial differences were noted, with white participants reporting lower overall well-being compared to black participants.

“Overall, despite the prevalence of mental health problems, participants revealed that they were surprisingly resilient and achieved relatively high well-being scores, except in financial areas,” the report said.

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The cost of living and mental health issues

The report also cites FinMark Trust’s annual FinScope Consumer South Africa for 2023 survey (2024). The research found that the rising cost of living has had a negative impact on South African households, as the purchase of daily necessities is under pressure.

“According to the study, the cost of living, including groceries, energy, transportation and communications, accounts for approximately 85% of monthly income, while groceries account for 30.4% of expenses, followed by energy (11.5%) and transportation (9.1%). ), communications (8.8%) and routine household maintenance, rent and rates (8.5%).

Corporate cultures

They noted that there are corporate cultures that emphasize performance and resilience, often equating mental health challenges with weakness.

“Such corporate cultures operate with an either-or mentality, prioritizing well-being or performance, rather than embracing a mindset that integrates both well-being and performance.”

Employees may fear job security and career consequences, causing them to hide their problems.

An estimated 80% of people who need mental health care do not receive it due to issues such as affordability, access to care and stigma.

READ ALSO: Break the Cycle of Your Finances Affecting Your Mental Health

The roles of colleagues in each other

The report adds that the role of colleagues in creating a sense of emotional connection in times of success and hardship should not be underestimated.

“Managers can proactively initiate a conversation if they notice an employee is not being their usual self or is showing signs of struggle. Waiting for the employee to address the problem can prolong problems and negatively impact performance and well-being.”

The report’s researchers say managers’ approach should be gentle and supportive, with an emphasis on caring for well-being, rather than focusing solely on job performance.

About the report

The survey surveyed 500 local participants who worked full-time, part-time or were self-employed. They were recruited from the African Response research panel using an online questionnaire.

“Organizational factors, such as the role you hold at a company, work location (all in-person, hybrid, or all remote), and perceived healthy work environment, had no significant association with overall well-being.”

The report is a collaboration between Gibs and tech innovator October Health. The tech innovator offers organizations an AI-powered digital platform that enables proactive mental health care.

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