When Employee Mental Health Suffers, so Does Your Business

When Employee Mental Health Suffers, so Does Your Business

The mental health of your employees has a direct impact on your company’s financial performance. Whether it’s absenteeism, presenteeism or turnover, mental health problems can cost big time.

Any business owner knows their employees are their most valuable asset. But what happens when an employee’s mental health starts to suffer? Mental health is a complex issue and can affect all aspects of a person’s life, including work performance.

There are several ways that an employee’s mental health can negatively impact a company’s bottom line. For example, absenteeism, productivity loss and accidents can lead to a loss of revenue. One study found that mental health problems cost U.S. businesses up to $1 trillion each year in lost productivity.

However, there are ways to help your employees maintain their mental health and keep your business running smoothly. Promoting a healthy work-life balance, providing access to mental health resources, and encouraging open communication are great tactics. But first, you must understand how mental health can affect your business in order to effectively handle any challenges that may arise.


The connection between mental illness and absenteeism in the workplace is well-documented. Most often, mental health problems are the leading cause of absenteeism. An employee regularly absent from work impacts production and revenue, as this issue can build over time, resulting in the loss of thousands of dollars. Not to mention, it can be frustrating for other team members, who have to pick up the slack.

Other ways in which absenteeism affects business include:

  • Leaving more work and use of overtime for other employees. Survey research indicates that over four-fifths of responding businesses used employees working overtime to fulfill other employee absences.
  • Coworkers left with additional work may lose productivity, costing the overall business. According to the same study above by the Society for Human Resource Management, co-workers are considered 29.5 percent less productive when covering for absences.
  • Constant absenteeism can damage relationships with clients and customers as it may take longer to fulfill orders or service requests.

If an absenteeism problem is left unaddressed, it can lead to a toxic work environment.


Presenteeism is the term used to describe employees coming to work feeling unwell. They may suffer from a physical illness, such as a cold or the flu, or a mental health issue, such as anxiety or depression. Regardless of the cause, presenteeism can harm both the individual and the workplace.

Working while unwell can worsen the individual’s condition and lead to longer recovery times. In the workplace, presenteeism can lead to reduced productivity, increased mistakes, and lower morale. Moreover, according to the Centers for Disease Control and Prevention (CDC), depression has been shown to interfere with a person’s ability to do physical tasks approximately 20 percent of the time and their cognitive performance 35 percent of the time.

However, calculating the cost of presenteeism is problematic because it is often not captured by traditional absenteeism data. This is why these issues can have a particularly pernicious effect on workplaces; they are often unseen or unreported and, therefore, harder to measure.

Employee turnover   

Employees who are not supported during their mental health journey are more likely to leave the company. You can see this dissatisfaction in a survey conducted by Jobsage: two out of five individuals stated they wished their company would be more vocal about mental wellbeing.

Turnover also has additional hidden costs. For example, when employees leave, they take institutional knowledge that can be difficult to replace. In addition, the remaining employees may have to work longer hours to pick up the slack, which can lead to burnout. Not to mention the turnover costs average $5,733 per year per employee, a price that can add up quickly.

How to identify mental health issues at your company 

Mental health issues can be challenging to identify in the workplace for several reasons. First, mental health is often invisible, so employees may not show apparent distress. Second, mental health is complex, and what may appear to be a simple problem may be indicative of a more serious issue. Finally, mental health stigma is still prevalent, and many people are reluctant to seek help for fear of being judged or labeled.

However, there are several ways business leaders can identify mental health issues in their employees.

Analyze performance data  

As organizations strive to improve their financial performance, they increasingly turn to data-driven insights to inform decision-making. One area where this is particularly evident is in the field of mental health. By analyzing and comparing their financial reports, organizations can gain valuable insights into the impact of mental health on their bottom line.

There are several tools that companies can use to glean insights from this data, such as:

  • Integrated financial reporting programs — These programs offer a comprehensive view of an organization’s financial performance, making it easier to identify trends and outliers.
  • Centralized document tracking programs — These programs track employee absences, making it easier to identify patterns and trends.
  • AI-powered data analysis programs — These programs use artificial intelligence to identify patterns in data, making it easier to spot trends.
  • Working paper software — This software allows users to manage and track changes made to financial statements and other documents, making it easy to identify potential red flags.

Some of the best tips for how to make the most of accounting technology include:

  • Start with leadership buy-in
  • Build an effective implementation team
  • Roll out the technology slowly
  • Communicate early and often
  • Monitor progress and adjust as needed

By understanding the impact of mental health on their business, organizations can take steps to mitigate the risks and improve their financial performance.

Ask employees for feedback  

Another way to identify mental health issues at your company is to ask employees for feedback. This can be done through:

  • Employee surveys — Many organizations use employee surveys to gather feedback about various topics, including mental health.
  • Exit interviews — These interviews are conducted with employees who are leaving the organization. They can provide valuable insights into how to improve the work environment.
  • Stay interviews — These interviews are conducted with employees considering leaving the organization. They can provide valuable insights into how to improve the work environment.
  • Regular check-ins with employees — These provide an opportunity for employees to share how they are feeling and what they are thinking.

Whichever method you choose, it’s essential to make sure employees feel comfortable sharing their feedback. Likewise, it’s smart to discuss feedback on management styles, practices and the work environment with your team regularly. This way, you’ll be able to glean valuable and actionable insights.

Look for warning signs 

Due to the stigma of mental health, many people are reluctant to seek help or report their struggles to employers. People often fear how others will react if they open up about their mental health, or lose their job as a result. Instead, employers should look for warning signs that an employee may be struggling with their mental health:

  • Mood changes — Employees experiencing mental health issues may exhibit changes in their mood, such as increased irritability or sadness.
  • Changes in behavior — Team members experiencing mental health issues may exhibit changes in their behavior, such as increased absenteeism or tardiness.
  • Changes in work productivity — Those experiencing mental health issues may exhibit differences in their productivity, such as lower quality work, longer working hours, or more mistakes.
  • Changes in physical appearance — Employees experiencing mental health issues may let their physical appearance go, such as wearing wrinkled clothes or not showering.
  • Inability to concentrate — Employees struggling with mental health may have difficulty focusing on tasks.
  • Loss of interest in previously enjoyed activities — Those experiencing mental health issues may lose interest in activities they once enjoyed, such as those that involve the creative process or socializing with friends.

If you notice any of these changes in an employee, it’s wise to have a conversation with them. This conversation should be conducted in a private setting and approached in a non-judgmental way. The goal is to get the employee to open up about how they are feeling and to offer them help.

How to support your employees’ mental health  

As a business owner or manager, you must show your support for your employees’ mental health. This is especially true as ahigh number of employees across the U.S. are quitting their jobs due to a lack of respect at work. Workers want to feel like their employer cares about them as a person, not just an employee.

Fortunately, there are many things you can do to support your employees’ mental health:

  • Encourage open communication — This means creating an environment where employees feel comfortable discussing their mental health without fear of stigma or judgment.
  • Offer resources — Make sure employees are aware of the resources available to them. This can include your company’s Employee Assistance Program (EPA) or health insurance coverage for mental health treatment.
  • Provide training — Offer training on identifying and supporting employees who may be experiencing mental health issues.
  • Offer breaks — Make sure employees have the opportunity to take breaks during the day. This can help reduce stress and promote a healthy work-life balance.

In a time when the “Great Resignation” is showing no signs of slowing down, accounting firms can counter the trend by offering insights on how the mental health of your employees affects revenue and what areas to focus on to improve the workplace.

Overall, it’s important to remember that the mental health of your employees is not only important for their wellbeing, but also that it can directly impact your company’s bottom line. Creating a supportive environment and offering resources can help your employees thrive personally and professionally.