Cost to corporate clients of failing to address mental health

This article is part of
Guide to mental health protection

Cost to corporate clients of failing to address mental health

Mental ill health has been hitting the headlines, and rightly so: it affects a quarter of people in Britain each year and can have a deleterious effect on individuals, their families, their workplaces and their finances.

According to figures from charity Mind, one in four of us will experience a mental health issue each year. 

Moreover, the 2017 Stevenson-Farmer Review, Thriving at Work, suggested the UK economy is affected negatively each year by mental health absence and by a lack of productivity when employees are present but unable to function to their fullest capability - the so-called 'presenteeism' effect.

It discovered a huge cost to businesses, the National Health Service and the overall economy as a result directly or indirectly because of mental ill health in the workplace.

The review found:

  • 300,000 people with a long-term mental health condition lose their jobs each year.
  • Approximately 15 per cent of people at work have symptoms of an existing mental health condition.
  • There is a large annual cost to employers of between £33bn and £42bn, with more than half of this coming from 'presenteeism'.
  • The cost of poor mental health to the economy is between £74bn and £99bn a year.

The 84-page review stated: "The UK is facing a mental health challenge at work that is much larger than we had thought.

"Not only is there a big human costs of poor mental health at work; there are knock-on effects for society, the economy and government.

"Employers are losing billions of pounds because employees are less productive, less effective, or off sick."

The infographic below, taken from the Stevenson-Farmer review, shows how the figures stack up to a billion-pound problem.

Nicola Mohns, head of intermediary and corporate marketing for Axa PPP Healthcare, says: "This is in addition to lost output, costing the economy £37bn to £52bn, and reduced tax intake, NHS treatment costs and ill-health related welfare payments, costing the government £25bn.

"Then there is the human cost. Individuals with long-term mental health disorders are less likely to find work, and the problem is growing."

She cites figures from the 2017 Labour Force Survey, which estimated the number of days taken sick as a result of mental ill health rose from 13 million in 2019 to 15.8 million in 2016.

Brett Hill, managing director of The Health Insurance Group, says the message is stark: "Mental health is one of the biggest issues that businesses face today".

Raluca Borolanu-Omura, assistant director and head of health and protection for the Association of British Insurers (ABI), has welcomed the report, as it has "pointed the way to developing a more integrated approach", which is "morally and commercially the right thing to do".

She says: "The scale and impact of mental ill health in the workplace is unacceptable."


The figures are stark - but has there been enough awareness and acceptance of mental health conditions to provide the necessary help to those who need it?

Rob Harvey, independent protection expert for Drewberry, says: "There is now a greater awareness of mental health issues, thanks to various campaigns and celebrities backing for the cause, which makes an issue that has historically been prevalent become more commonly spoken about.

"However, although it is becoming more acceptable to discuss the issue, research from Mind has revealed just 5 per cent of people who had requested time off work due to mental illness actually admitted this was the reason for their absence, so there is still work to do."