New Mental Health Cost Calculator Shows Why Investing in Mental Health is Good for Business

Analysis by NSC and NORC at University of Chicago reveals organizations that support mental health see a return of $4 for every dollar invested.

May 13, 2021

Itasca, IL – Over 40% of Americans report increases in mental distress due to the COVID-19 pandemic, leaving employers with their own crisis, resulting in increased absenteeism, negative impacts on productivity and profits, and an increase in health care costs.

Encouragingly, employers that support mental health see a return of $4 for every dollar invested in mental health treatment, according to new research released May 13 from the National Safety Council and NORC at the University of Chicago. When employees receive effective treatment for mental distress, organizations realize reduced total medical costs, increased productivity, lower absenteeism and decreased disability costs. 

The analysis also revealed organizations spend over $15,000 on average annually on each employee experiencing mental health issues. This data highlights the costs pre-COVID-19 and likely underrepresents the current cost to employers due to the increase in Americans experiencing mental distress.

Mental distress has long been a hidden issue in the workplace, with 85% of workers reporting the workplace itself affects their mental health and wellbeing. One risk factor for mental distress is experiencing stress, which can be caused by workplace conditions. Chronic exposure to stressful workplace conditions can lead to a variety of mental health conditions, including experiencing depression, anxiety, an inability to concentrate and emotional exhaustion. Adding this to stressful conditions in the home, and the problem can quickly grow.

To help employers understand the pivotal role they play in supporting employee mental health and safety, NSC and NORC at the University of Chicago created the Mental Health Cost Calculator, funded by Nationwide. This authoritative, easy-to-use tool provides business leaders with data-driven insight about the costs of employee mental distress in their workplaces and identifies the specific ways untreated distress impacts employers’ costs. These costs include an estimate of the dollars lost in days of work missed, excess turnover and replacement costs, and greater health care use by distressed workers and family members. The calculator also offers research-proven steps employers can take to help employees and their family members recover, while increasing the safety, health and productivity of their workplaces.

“Employee safety is at risk any time a worker isn’t feeling 100% well — which is why we recommend employers prioritize both workers’ mental and physical wellbeing,” said Lorraine M. Martin, NSC president and CEO. “The Mental Health Cost Calculator aims to make the business case for investing in employee mental health. We must also acknowledge the humanity in this issue and extend support to our colleagues and loved ones who have experienced unprecedented stress and distress over the past year and beyond.”

NSC stands ready to partner with employers to prioritize mental health and safety with a robust offering of materials, consulting services and additional resources to keep employees safe at nsc.org/WorkplaceMentalHealth.

“Millions of employees experience psychological distress each year, yet it often goes undetected. Employers are uniquely positioned to address employee mental health by raising awareness, supporting routine screening and early identification, and improving access to care and evidence-based treatments,” said Tracy McPherson, PhD, senior research scientist in the Public Health department at NORC at the University of Chicago. “This tool, developed in a partnership between NSC and NORC, helps employers understand the impact of untreated mental distress and understand why investing in a mentally healthy workforce is good for business, fosters a safe workplace, and improves the health of employees and their families.”

“The Mental Health calculator not only shows our leadership the monetary cost of managing mental health issues in the workplace, but also how these issues impact our organization in various ways, such as turnover, safety occurrences and absenteeism. This tool helps Nationwide, and hopefully other employers, implement the most critical and timely mental health and wellbeing programs that help associates and their families who may be struggling in this area,” said Tina Thornton, associate vice president of wellbeing and safety at Nationwide.  

Other findings from the analysis include: 

  • Employees experiencing mental distress use, on average, nearly $3,000 more in health care services per year than their peers. The cost of days lost averages $4,783 per year per employee, and the costs of turnover averages $5,733 per year per employee.
  • Distress varies greatly across occupations. Occupations with high levels of distress are entertainment, sports, media and communications, technicians and related support occupations, while low prevalence occupations include executive, administrative, managerial, financial, protective services and construction.
  • Employees who have experienced mental distress in the past year are more likely to have reported driving under the influence of alcohol, marijuana or other drugs.
  • Mentally distressed workers are 3.5 times more likely to have substance use disorders. Learn more about the costs of employee substance use to the workplace with NSC and NORC’s Substance Use Cost Calculator

The Mental Health Cost Calculator for Employers combines results from the 2015 to 2018 National Surveys on Drug Use and Health with the latest research on the costs of mental health problems for employers. The Mental Health Cost Calculator defines mental distress – or serious psychological distress – if respondents reported the following within the past year: periods of intense nervousness, hopelessness, restlessness, depression, things requiring great effort, or feeling down on themselves, no good or worthless. The cost calculator is available at nsc.org/mentalhealthatwork.

About the National Safety Council
The National Safety Council is America’s leading nonprofit safety advocate – and has been for over 100 years. As a mission-based organization, we work to eliminate the leading causes of preventable death and injury, focusing our efforts on the workplace, roadway and impairment. We create a culture of safety to not only keep people safer at work, but also beyond the workplace so they can live their fullest lives.

About NORC at the University of Chicago
NORC at the University of Chicago conducts research and analysis that decision-makers trust. As a nonpartisan research organization and a pioneer in measuring and understanding the world, we have studied almost every aspect of the human experience and every major news event for more than eight decades. Today, we partner with government, corporate, and nonprofit clients around the world to provide the objectivity and expertise necessary to inform the critical decisions facing society.

Partner with NSC

With a century-long legacy, the National Safety Council is a global center for safety expertise. Let's work together to align resources. We look forward to learning about ways we can join efforts to expand safety everywhere!

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