Mentally healthy workplaces – 3 good reasons

mentally healthy workplaces reasons

A ‘mentally healthy workplace’[1] is one in which “risk factors are acknowledged and appropriate action taken to minimise their potential negative impact on an individual’s mental health whilst at the same time protective or resilience factors are fostered and maximised.[2]” Apart from the increasing impact of workplace mental health on workers, workplace health and compensation authorities and social welfare systems globally, it is an area of growing concern and universal risk to businesses[3] due to its potential to impact the productivity, competitiveness and sustainability of enterprises and communities as well as national and regional economies[4]So why should business leaders bother?  Here are 3 reasons for business leaders to adopt mentally healthy workplaces.

1.         It is the right thing to do

Ethics and social responsibility matter more to businesses today than ever before. Companies are under increasing and closer scrutiny from workers, prospective employees, consumers, competitors, regulators, governments, and global communities. Good governance has become synonymous with transparency around the way businesses are directed and managed, including their ethical practices and now underpins competitiveness and enterprise value in the modern era.

Many ethical standards are now in legislation. Laws relating to environmental standards, employee payments and conditions, privacy, insolvency, workplace health and safety, and anti-discrimination are some examples of lawmakers seeking to instil ethical standards within the business community by mandating them to ‘do the right thing’ in these areas. Defiance of these standards can destroy a business’s reputation, yield global consequences, and expose the company and its management to substantial fines and penalties. Cases like 7-Eleven (exploitation of workers and underpayment of wages) and VW (engineering motors to give false readings) are recent examples.

Global declarations have also emphasised the importance of ethical business practices involving workers. For example, the 2008 Seoul Declaration on Safety and Health at Work asserts a safe and healthy work environment as a fundamental human right[5] as stipulated in Article 23 of the Universal Declaration of Human Rights[6].

2.         It is the legal thing to do

Most countries around the world have enacted national and even local legislation requiring at least minimal employer protection of workers from workplace hazards that could cause injury or illness[7]. Australia is no exception. Like many other western nations, it has well-established systems underpinned by legislation, regulation, policy, and planning measures which are consistent with international human rights and covenants[8]. These systems provide clear guidance on the requirements for businesses to establish, implement, and maintain workplaces which promote the health (physical and psychological), safety, and welfare of workers, together with consequences for failing to adhere to these obligations and practices[9]

Failing to provide healthy work environments (including mentally healthy ones) do not only expose employees, their families and the public to undue risks and human suffering. Enterprises and their leadership may also become involved in costly litigation under national or international labour laws. Fines or even imprisonment of managers and directors found guilty of violations are increasingly probable outcomes. Multinational companies seeking to cut costs by relocating dangerous industrial processes or high-risk activities to countries where health, safety and labour legislation or enforcement are perceived as weaker may discover that their firms and products become the focus of intense international and media scrutiny, undermining their markets and profitability[10].

If some business leaders consider the first two reasons merely serve to highlight areas identified by their companies as a standard legal, commercial or compliance risk, then perhaps money will do the talking.

3.         It is the smart thing to do

While Benjamin Disraeli[11] may have contended that “[t]here are three types of lies — lies, damn lies, and statistics” the figures derived from research studies on the subject lend strong support for the reasons businesses to adopt (if not embrace with open arms) mentally healthy workplaces. 

Here are just some of the stats:

  • On average, Australian employees take 8.8 unscheduled days off per year[12] costing employers approximately A$578 each employee per absent day, with the annual cost of absenteeism to the Australian economy an estimated A$44 billion per year.[13] 
  • Stress and depression are the most significant contributors to lost productivity in Australia. Each year, a total of 3.2 days per worker are lost due to workplace stress.[14]
  • Productivity losses are halved when employees with mental health conditions seek early intervention or treatment[15].
  • Untreated mental health conditions cost workplaces in the order of A$13 billion per year in Australia[16], £26 billion in the UK[17], US$44 billion in the United States[18], and the global economy an estimated US$ 1 trillion in lost productivity[19].
  • 21 per cent of Australians took time off work in the past 12 months because they felt stressed, anxious, depressed or mentally unhealthy. However, of those who consider their workplace mentally unhealthy, this figure is over twice as high at 46 per cent[20].
  • 91 per cent of Australian employees believe mentally healthy workplaces are vital, but only 52 per cent believe their workplace is mentally healthy compared to 76% for physical safety[21].
  • For every $US 1 invested in scaled-up treatment for mental health disorders in the United States, there is a return of US$ 4 in improved health and productivity[22]. In Australia, a positive return on investment (ROI) of 2.3 was derived from the successful implementation of practical actions to create a mentally healthy workplace yielding an average of A$2.30 in benefits for every dollar spent by an organisation with returns generated through improved productivity[23], reduced absenteeism and fewer compensations claims[24].

While there are likely to be many more reasons for business leaders to adopt mentally healthy workplaces, those offered in this article not only represent good governance but also provide compelling reasons for the existence of mentally healthy workplaces as a means of promoting competitive advantage through differentiation of workplace practices.

© 2020. Robert Nicholls. All Rights Reserved.

Featured Image: Shutterstock

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[1] See Robert Nicholls (2020). Mentally Healthy Workplaces, available at

[2] Harvey, S. B., et al. (2014). Developing a Mentally Healthy Workplace: A review of the Literature, p.12. Retrieved on 25 May 2020 from: source/resources/developing-a-mentally-healthy-workplace_final-november- 2014.pdf?sfvrsn=8.

[3] LaMontagne et al (2014). Workplace mental health: developing an integrated intervention approach, BMC Psychiatry, 2014, 14:131.

[4] WHO (2010). Healthy workplaces: a model for action: For employers, workers, policymakers, and practitioners, WHO Press, Geneva.

[5] Seoul Declaration on Safety and Health at Work. International Labour Organization, International Safety and Security Organization, Korean Occupational Safety and Health Agency, 2008. Retrieved on 26 May 2020 from:–en/index.htm

[6] Adopted by the UN member states, including Australia, on 10 December 1948.

[7] Mental Health Atlas 2017. Geneva: World Health Organization; 2018. Licence: CC BY-NC-SA 3.0 IGO.

[8] Ibid.

[9] In the Australian context, while the Commonwealth, states and territories of Australia are responsible for implementing, regulating and enforcing workplace health and safety (WHS) laws in their respective jurisdictions, the model WHS laws (comprising of laws, regulations and model Codes of Practice) developed by Safe Work Australia have been implemented (with some slight localised variations) in all jurisdictions except Victoria and Western Australia. Other laws which may also be relevant are those relating to worker’s compensation, criminal law, privacy, anti-discrimination, and fair work laws. For further information, go to

[10] World Health Organization (2010). Healthy workplaces: a model for action: for employers, workers, policymakers, and practitioners. WHO Press, Geneva.

[11] Benjamin Disraeli is reported to be one of the great British politicians of the nineteenth century. He served twice as a Tory Prime Minister.

[12] Australian HR Institute (AHRI). HR Pulse survey on Absence Management Report, March 2016

[13] AIG Absenteeism & Presenteeism Survey Report 2015. For other countries see, for example, Evans-Lacko S., Knapp M. Global patterns of workplace productivity for people with depression: Absenteeism and presenteeism costs across eight diverse countries. Soc. Psychol. Epid. 2016; 51:1525–1537. doi: 10.1007/s00127-016-1278-4. 

[14] Medibank Private Report on The Cost of Workplace Stress in Australia, 2008

[15] R U OK Org (2020). Meaningful conversation is good for business. Retrieved on 23 May 2020 from:

[16] PwC (2019). Creating shared value: the business imperative to improve mental health in Australia, Shared Value Project, October 2019.

[17] Deloitte Centre for Health Solutions. (2017, March). At a Tipping Point? Workplace Mental Health and Wellbeing. Retrieved on 25 May 2020 from: uk-workplace-mental-health-n-wellbeing.pdf.

[18] American Psychiatric Association Foundation, Depression: A Costly Condition for Business. Retrieved on 23 May 2020 from:

[19] WHO (2019). Mental health in the workplace. Information Sheet. May 2019. Retrieved on 25 May 2020 from:

[20] TNS. (2014) “State of workplace mental health in Australia” [Online]. Retrieved on 25 May 2020 from:—tns-the-state-of-mental-health-in-australian-workplaces-hr.pdf?sfvrsn=2.

[21] TNS. (2014) “State of workplace mental health in Australia” [Online]. Retrieved on 25 May 2020 from:—tns-the-state-of-mental-health-in-australian-workplaces-hr.pdf?sfvrsn=2.

[22] WHO (2019). Mental health in the workplace. Information Sheet. May 2019. Retrieved on 25 May 2020 from:

[23] For a discussion on the impact of depression on labour productivity see KPMG. (2018). Investing to Save – KPMG and Mental Health Australia Report. Retrieved on 25 March 2020 from:

[24] Price Waterhouse Coopers. (2014). Creating a Mentally Healthy Workplace – Return on Investment Analysis. Canberra.

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