Mental illness takes toll on businesses News added by Benefits Pro on August 27, 2014

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By Bruce Jacobs

The sad and tragic death of comedian and actor Robin Williams two weeks ago was a solemn reminder of the toll depression can take on even the most gifted.

Mental health, however, isn’t just an unfortunate problem for individuals; it’s an issue vital to American businesses and the well-being of the economy.

The National Institute of Mental Health reports that “at any one time, one in four adults in the [United States] is suffering from a diagnosable mental disorder, which is the leading cause of disability in people ages 15 to 44.”

That age range, arguably, is the most important time in one’s professional life, when he or she selects, learns, and perfects the skills that will contribute not only to personal satisfaction, but also to the maintenance and growth of the economy overall.

And when mental health problems jeopardize an individual, the troubles don’t just stop there.

“Ninety percent of employees agree that health issues — both mental and physical — spill over into their professional lives and directly impact job performance,” reports Mental Health America, an advocacy group founded in 1909, adding that “mental health conditions are the second leading cause of absenteeism.”

The costs are staggering — $80 billion to $100 dollars annually — according to a 2005 report by the National Business Group on Health/Center for Prevention and Health Services.
Some researchers have pegged the numbers even higher, suggesting that job stress alone costs U.S. industry some $300 billion annually in absenteeism, lost productivity, increased medical, legal, and insurance payments — and turnover.

Joe Hadzima, senior lecturer at MIT’s Sloan School of Management, estimates that replacing an employee can cost between 1.25 to 1.4 times that worker’s base salary. Firing and rehiring a replacement for a $50,000-a-year employee can cost between $62,500 and $70,000, depending on the position’s training and learning curve.

Employee stress, though, seems to be the major cause of many workplace problems.

A 2009 study conducted by the American Psychological Association found that 69 percent of employees reported that work is a significant source of stress. Moreover, stress in the workplace is exacerbated when employees have to negotiate the shoals? between job and family. Another APA study found that “55 percent of employees said that job demands have interfered with responsibilities at home.”

And that conflict, revealed a 1999 study, “is related to employee turnover and intention to quit.” Employees who can’t leave a job often mitigate the mounting work/home pressures by resorting to substance abuse, becoming a danger to themselves and a liability to the organization.

Since then, the APA has promoted the importance of balance in the workplace with its annual Psychologically Healthy Workplace Award, which acknowledges public- and private-sector employers that have found ways to increase job satisfaction, boost morale, reduce stress and enhance motivation within their organizations.

For the last two decades or so, the APA has been compiling corporate, government, and academic studies relating to mental health issues in the workplace. While the statistics are generally sobering, specks of optimism emerge.
  • 2010 APA Psychologically Healthy Workplace Award winners reported an average turnover rate of 9 percent, compared to 41 percent nationally. Only 30 percent of employees at the winning companies reported chronic work stress, compared to 41 percent nationally. Winning companies reported employee job satisfaction at 73 percent, compared to 65 percent nationally.

  • In a study of 24 publicly traded companies, those with high morale outperformed similar companies in their same industries by almost 2.5 to 1, while the stock prices of companies with medium or low morale lagged behind their industry peers by more than 1.5 to 1.

  • Eighty-five percent of employees who participated in a wellness program in the past three years agreed that the programs are effective in promoting good health.

  • A 2010 report found that companies with the most effective health and productivity programs achieved 11 percent more revenue per employee, delivered 28 percent higher shareholder returns, and had lower medical trends? and fewer absences per employee compared to companies with less effective or no programs.

  • Companies with high morale outperformed industry peers by a factor of 2.5 to 1, according to a 2006 study, which also found that the stock prices of firms with medium to low morale fell behind industry peers by more than 1.5 to 1.
Whether they’ve been willing to do anything about it or not, companies large and small have long been aware of the deleterious effect a troubled employee can have on corporate productivity and organizational harmony and morale. Even a good employee just having a bad day can gum things up for co-workers.

One solution is employee assistance programs, which have been around since the 1940s. EAPs gained acceptance and growth in the 1970s but are only now beginning to mature in popularity, importance and urgency.

The modern EAP seeks to provide employees with in-house or third-party counseling for anything from serious personal problems (substance abuse, suicide prevention, anger management, bereavement and job loss) to the ordinary but stressful demands of daily life (financial and retirement planning, legal advice, relationship and child-care issues, and even car buying).

For a comprehensive EAP program, no problem is too small. A 2002 study found that the inclusion of work/life services reduced work loss in 39 percent of cases and improved productivity in 36 percent of cases studied.

Despite treatment advances and increasing public awareness, though, mental and emotional illness sufferers are still often stigmatized and misunderstood. As a result, a good EAP program also will provide managers and supervisors with strategies to sensitively — and legally — approach a problematic employee with options for help.

Creating a workplace where employees are offered personal help for their problems has paid big dividends for Tom Walter, CEO of Tasty Catering, a Chicago-based company and one of this year's four winners of APA’s Psychological Healthy Workplace Award.”

“I know our programs have helped employees,” Walter says. “We have very little turnover. And no absenteeism problems whatsoever.”

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