Managing people

Mental health in the workplace

Are companies meeting employees' expectations?

As an employer, the mental health of your employees is as important as their physical health, and caring for mental health is essential to maintaining a healthy workplace environment. 

45% of Australians experience mental illness at some stage during their lives. With a rising number of mental health conditions (also known as psychological injuries) in the workplace, businesses can no longer afford to ignore their employees’ mental health. This due to the negative impact on individual employees, and the costs associated with the long periods away from work that are typical of these claims. Each year:

  • 7,200 Australians are compensated for work-related mental health conditions, equating to around 6% of workers’ compensation claims, and
  • approximately $543 million is paid in workers’ compensation for work-related mental health conditions.

In Australia, employers have a legal obligation to help employees suffering from mental health conditions and ensure they don’t face discrimination in the workplace. Moreover, embracing a positive and proactive approach to your workplace mental health strategy can significantly improve workplace culture, boost productivity, and improve staff retention rates.

While building a mentally healthy workplace can directly impact a company’s bottom line, the most recent research into the state of mental health in the workplace shows Australian companies are still falling short – and it costs employers and employees.

Mental health and depression

Issues relating to mental health and the workplace have a significant financial impact on companies, with untreated mental health conditions costing Australian businesses more than $10.9 billion per year. Of this, over $4.7 billion is lost in absenteeism, where employees are regularly away from work, and $6.1 billion in presenteeism, where employees spend more hours at work than required. Australian businesses are also losing $146 million in compensation claims.

On the other hand, research shows that businesses directly benefit when mental health is valued by leaders, and when employees have the right access to support in the workplace. In companies that employees considered mentally healthy, self-reported absenteeism as a result of mental health conditions almost halves from 21% to 13%.

Employee behaviour impacted

In the past year, one in five Australians (21%) have taken time off work because they felt stressed, anxious, depressed, or mentally unhealthy. For those in workplaces that they consider mentally unhealthy, this figure rises to almost half of all employees (46%). 

What’s more, if an employee considers their workplace is mentally unhealthy, they’re unlikely to tell HR or management and are also less likely to offer support to their colleagues, which means many issues go unnoticed.

Employee expectations

The good news is that companies recognise the value of caring for an employee’s mental health: 91% of employers believe that mental health in the workplace is important, compared to 88% who believe that physical safety in the workplace is important.

However, employees are less likely to see this reflected in the workplace. Only 52% of employees believe their workplace is mentally healthy, compared to 76% who believe their workplace is physically healthy. On top of this, only 56% of employees believe their senior leader values their mental health.

Access to resources 

Three-quarters of Australian employees say workplaces should provide support for those suffering from anxiety or depression in the workplace, and employers agree: 81% of leaders say their workplace has policies, procedures or practices to help support employees who are experiencing mental health conditions.

However, while this support may exist, mental health in the workplace statistics show employees either aren’t aware of these processes or can’t access them, with more than a third (35%) of employees saying they don’t know that these services exist or don’t have access to them.

What does this mean for Australian businesses?

Employers need to take greater responsibility when it comes to building mentally healthy workplaces in order to ensure employees have a positive work environment and know where to go if they’re looking for support.

As an employer, there are plenty of things you can do to build a mentally healthy workplace:

  • Create a Mental Health Plan outlining your workplace mental health strategy, training and support networks.

  • Invest in a mental health policy and ensure everyone in the workplace is aware of it, from managers to employees.

  • Regularly review policies and procedures with your managers to make sure they’re clear on their legal obligations.

  • Conduct a workplace and safety audit to understand the current state of mental health in your company, and see how you can minimise risk to employees.

  • Run mentally healthy workplace training for employees and managers to make sure everyone knows what policies are in place and where they can go if they need help.

  • Build an Incident Response Plan and regularly train managers and key stakeholders.

  • Launch a survey of your employees to gauge the efficiency of your Employee Assistance Program, and understand their current views.

  • Schedule regular performance management training for managers. 


Above all, investing in mental health in the workplace ensures employees feel supported and cared for, and helps build a more positive and productive environment in your organisation. 

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