Blog: The real cost of poor mental health at work
(and what it means for your business)
Poor mental health costs businesses billions each year through absenteeism, presenteeism, and turnover. Learn the real costs, how to calculate them, and what leaders can do to protect their people — and their bottom line.
by Hope.
Poor mental health is no longer just a personal challenge – it’s a huge business issue.
Research shows the cost of poor employee mental health is enormous. Deloitte estimates that poor mental health costs UK employers £51 billion every year, while the World Health Organization reports that every $1 invested in mental health returns $4–$6 in improved health and productivity.
But here’s the challenge: most of these costs are hidden. They don’t show up neatly in a P&L — they’re buried in sick days, lost productivity, and staff turnover.
So what does this mean for your business?
Let’s break it down.
The research case for action
The numbers are consistent across multiple studies:
- Deloitte UK (2020): £51B annual cost of poor mental health to employers, made up of absenteeism (£7B), presenteeism (£24B), and turnover (£20B).
- WHO (2020): Every $1 invested in mental health at work yields $4–$6 in ROI.
- ONS Labour Market Data (2023): Average employee loses 5–6 days per year to sickness absence.
- Centre for Mental Health (2018): Mental health problems cost the UK economy £34.9B per year in lost productivity.
- NICE (National Institute for Health and Care Excellence): Workplace wellbeing programmes improve staff engagement and business performance.
Across geographies and sectors, the conclusion is the same: ignoring wellbeing is costly, while proactive support delivers measurable returns.
Breaking down the hidden costs
Poor mental health affects businesses in three major ways:
- Absenteeism
When employees can’t work due to stress, anxiety, or depression.
→ Average: 5–6 sick days per employee, per year. - Presenteeism
The ‘invisible’ cost — employees are physically present but unable to perform at their best due to mental health struggles.
→ Research shows this is the largest contributor to lost productivity and can be up to twice as costly than absenteeism. - Turnover
Employees leave because their wellbeing isn’t supported, forcing organisations to spend heavily on recruitment, onboarding, and lost knowledge.
Together, these three factors make up the bulk of hidden wellbeing costs.
How to calculate the cost for your business?
The simplest way to estimate your organisation’s hidden costs is to apply the per-employee cost model.
Example Calculations
- Headcount size: 500 employees
500 × $1,700 = $850,000 per year in hidden costs. - Headcount size: 5,000 employees
5,000 × $1,700 = $8.5M per year in hidden costs.
That’s before you consider the broader ripple effects: disengagement, lost innovation, reputational risk, and reduced resilience.
Why leaders should care
The financial case is clear, but the human case is even stronger.
- Retention risk: Wellbeing is now one of the top three reasons employees leave jobs.
- Productivity drain: Presenteeism erodes performance even in “high attendance” cultures.
- Culture impact: When employees don’t feel supported, trust and engagement suffer.
For HR leaders, CFOs, and CEOs, the message is simple: wellbeing isn’t a perk. It’s a strategic lever for performance, resilience, and growth.
The opportunity
The good news is that these costs are not fixed.
Hope’s work with clients shows that by combining insights, tailored action plans, and continuous support, organizations can turn hidden costs into measurable business value.
WHO research shows proactive support can return 4–6X ROI.
Deloitte found that organisations investing in wellbeing initiatives saw higher engagement, lower turnover, and measurable productivity gains.
Uncover your hidden costs
Poor mental health is costing businesses billions — often invisibly. But with the right data and proactive strategies, those losses can be reduced and reinvested into healthier, higher-performing teams.
👉 Want to see what this looks like in your organisation?
Try our Workplace Wellbeing Cost Calculator to discover your hidden costs and get a free report for your business.
Turning data into action
Numbers alone don’t change outcomes, action does.
Once you understand the hidden costs of poor mental health and wellbeing in your organisation, the next step is to build a strategy that reduces them. That’s where Hope comes in.
Our wellbeing audit gives you tailored insights into your people’s needs and helps you design proactive steps that protect performance, retention, and resilience.
References:
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