The Economic Impacts: Workplace Mental Illness and Substance Use

By Claudia Steinke, PhD, RN and Ali Dastmalchian, PhD*

Stress is a normal part of any life and any job. Stress can be positive or negative. How people react to different stressors is very individual. But too much stress can contribute to, or even lead to, serious health problems and/or mental illness for workers.

No workplace is too big or too small to avoid the impact of mental illness. Nearly 6 million, or 1 in 5 Canadians are likely to experience a mental illness in their lifetime.1 This makes mental illness the largest untreated epidemic facing the Canadian workforce.2 According to the Canadian Mental Health Association, many people face mental illness during their prime working years.3

A skyrocketing cost
The economic price tag of mental illness in the workplace is skyrocketing. A recent report puts the price at $51 billion. This figure includes medical costs, costs from lost productivity due to long-term and short-term disability, and costs to quality of life.4

Workplaces that create or maintain high levels of stress pay the price in terms of:

  • worker inefficiency
  • reduced productivity and competitiveness
  • high worker compensation claims
  • high rates of occupational injury
  • high costs for health claims
  • high incidence of disability leave
  • high rates of absenteeism and turnover
  • low levels of worker job satisfaction
  • low levels of customer satisfaction

Mental illnesses have surpassed heart disease as the fastest-growing, costliest disabilities in the country.3 Nearly half of the sick days workers take are because of mental illnesses like depression.5 When mental illness accompanies another disability such as a physical disability, the length of time off from work increases two to three times.5 For example, a worker who takes one month off work for a back injury may end up being away for two to three months if the back pain is accompanied by depression.

One report shows that we are seeing mental illness follow a pattern of burn-out to depression to short-term disability and then long-term disability.6 In fact, mental illness and addiction account for 46% of all long term and short term disability claims.7

Early intervention and treatment makes cents?It’s in the business interest of companies to improve the mental health of their workers and to improve the way a worker’s case is managed if they become sick with a mental illness. For example, when workers get early access to treatment, companies can save $5,000 to $10,000 per worker each year.3 They save in the cost of prescription drugs, sick leave and average wage replacement. Workers who are diagnosed with depression and who take the prescribed medication save employers an average of 11 absentee days per year.3

Early detection at work is possible. Seventy to 80% of mental illnesses can be treated effectively when properly diagnosed and managed. Unfortunately, only one in four cases is properly diagnosed and only one in four of those cases are properly treated.2??Combating stigma—a top priority?The reality is that mental illness is among the more difficult workplace problems to tackle. Unlike most other disorders, many people choose not to get treatment for mental illnesses, even when treatment is available.

The promise of some relief competes with the fear of being stigmatized. In the business world in particular, nobody wants to admit to having a mental illness. To do so is often viewed as a sign of weakness and thus is a sure-fire career killer. The fear of losing your job and the respect of your colleagues prevents people from seeking treatment.

Mental illness is also a disease that many managers choose not to talk about. This is because they don’t know where to start, are uncomfortable with mental illness in general, and some are scared of liability.

In all cases, combating the stigma of mental illness is one of the most pressing priorities for improving mental health in organizations. It has been well documented that addressing mental illness in the workplace by reducing the stigma makes good economic sense. Yet, less than a third of employers have plans in place to address this important issue.8

Creating awareness and educating managers and employees about mental illness are first steps that organizations can take to address this issue. Only by making it acceptable to openly discuss mental illness can we can ever hope to eliminate the harmful stigma that is attached to it.

1. Canadian Mental Health Association, PEI Division. (2008). Quick Facts.

2. Wilson, M., Joffe, R., & Wilkerson, B. (2002). The unheralded business crisis in Canada: Depression at work. Toronto: Global Business and Economic Roundtable on Addiction and Mental Health.

3. Canadian Mental Health Association, Ontario. (2008). Mental health facts: Why workplace mental health matters.

4. Lim, K., Jacobs, P., Ohinmaa, A., Schopflocher, D., & Dewa, C. (2008). A new population base measure of the economic burden of mental illness in Canada. Chronic Diseases in Canada, 28(3), 92-98.

5. Conference Board of Canada. (2008). Western Workplace Health 2008: Mental Health, Productivity, and Performance.

6.  Kirby, M. (2008, May). Making cents of mental health in the workplace. Speaker presentation at the Annual Luncheon for the Kettle Friendship Society, Vancouver, BC.

7. Government of Canada. (2007). Mental Health, Mental Illness and Addiction: Overview of Policies and Programs in Canada.

8.  Watson Wyatt. (2005). Employers Feeling the Pain of Poor Worker Health, But Concern Not Translating into Action.

Claudia is a Research Assistant at the Faculty of Business,  University of Victoria, and Research Lead for Cohos Evamy Integratedesign™. Ali is a Professor and Dean of the Faculty of Business, University of Victoria,  and Chairman of the Canadian Federation of Business School Deans.

* This article originally appeared in the ‘Workplaces’ issue of Visions: BC’s Mental Health and Addictions Journal, 2009, Vol 5, No 3, pp. 6-7. Reproduced with permission of the authors and the BC Partners for Mental Health and Addictions Information.


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