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Australian businesses could find themselves in hot financial waters in the next decade if workplace mental health continues to be on the backburner rather than a priority, a new report warned.
Concerning data from the Committee for Economic Development of Australia (CEDA) showed that costs of mental health-related compensation claims have blown out in recent years.
According to the report, median compensation costs for mental health claims tripled in just under 20 years to 2018–2019.
Notably, poor mental health is not hurting just the pocket of business owners — but that of the economy as well. The report revealed that poor mental health costs the Australian economy around $70 billion every year, with an estimated 3.5 million Australians having mild to moderate mental health issues.
CEDA senior economist Cassandra Winzar weighs in on why there is an observed rise in mental health claims.
“Australian businesses have been very successful in prioritising physical safety in the workplace over recent decades; however, psychological safety has not been given the same priority,” she commented.
Due to this observed disparity in prioritisation, the report pointed out that serious workers’ compensation claims in Australia have fallen over the last two decades, while in stark contrast, claims for mental health conditions have increased.
If businesses continue to overlook mental wellbeing in the workplace, the report warned that the number of mental health claims is projected to double in 2030.
When it comes to median costs related to these claims, the number could triple in real terms by the same period.
“And taking into account the impacts of COVID-19 stress, job instability and working-from-home trends, these claim numbers may escalate further,” Ms Winzar said.
However, CEDA’s new report shows these grim outcomes are not inevitable. “Employers can act now to reduce the impact of work on employee mental health,” Ms Winzar stated.
But she underlined that the investments in the mental health of employees should be impactful and should go beyond adding perks to the workplace.
“This does not mean simply offering free yoga classes, fruit boxes or mental health awareness morning teas — these initiatives make no discernible impact on staff mental health.
“What does make a difference is ensuring jobs are well designed, that managers are trained to address mental health issues, and that organisations adopt firm-wide mental health strategies,” she explained.
The report also advocated for measures such as employees having more control over their job design, increased mental health training for managers, as well as developing, formalising and promoting organisation-wide mental health strategies — which have been proven to improve mental health outcomes.
Lastly, Ms Winzar emphasised that putting the work and the investment in the mental health of employees is “a sound business decision”.
“Increased employee wellbeing will increase participation, employee engagement and ultimately productivity,” she stated.
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