Prior to the COVID-19 pandemic, one in five Australians were suffering from a reported mental health disorder. They aren’t alone. An estimated additional 6 million were at risk of developing a mental illness each year. More alarmingly, mental health has been identified as the number one concern for young Australians. Unfortunately the impact of COVID-19 will only amplify these issues.
Poor mental health costs more than the mental and physical toll on individuals.
The impact on the economy is staggering, calculated at $60 billion per year, or around 4 per cent of GDP. Businesses alone are affected through lost wages, mental health support services expenses and decreased productivity, to the tune of $13 billion annually.
Mental health is also among the leading causes of income protection and TPD claims in Australia. This loss of experience and expertise costs businesses as their employees are temporarily or permanently lost to the workforce.
It is not just the cost of mental health which links it to money.
Poor mental health and financial stress are strongly interlinked. Money problems, especially debt, can worsen depression. A UK study exploring the relationship between employees’ mental health and other stress factors found those with financial stress were almost 4 times more likely to feel anxious and be prone to panic attacks, and almost 5 times more likely to be depressed.
Global research also shows that people with mental health problems are more susceptible to problem debt. In fact, 24 percent of those with depression or anxiety are in debt respectively, compared to fewer than 8 percent of those without mental health challenges.
Social problems which are commonly linked with mental illness include poverty, unemployment, underemployment and homelessness. These are all affected or determined by our financial situation.
Our financial health and mental health are inextricably linked.
90% of the nearly 55,000 respondents to the ABC’s most recent Australia Talks National Survey, rated household debt as a problem for the nation. On an individual level, 39% of Australian households live beyond their means or barely break even, with almost half of millennials reporting that debt is a problem for them personally.
Australian’s state that their number one source of stress is personal finances.
If a worker is worried about money, there are obvious impacts on their work performance, which flows through to lost productivity. Put simply, workers’ private financial problems impact their work performance and can impact on the mood and culture of the entire workplace.
Proactively addressing the problems
Government efforts have focused on managing existing mental health problems, rather than proactively addressing its root causes. It is imperative that improving mental health be addressed as a business, not just an individual, societal or government challenge. This can create a more integrated and proactive approach, which promotes better overall mental health and wellbeing.
Shared Value Project report, “Creating Shared Value; the business imperative to improve mental health in Australia” outlines the prevalence and impact of mental ill-health on business. Helen Steel, CEO of the Shared Value Project said, “Addressing mental ill-health can increase employee efficiency and attendance, improve customer engagement and financial stability, and create more thriving communities to do business with. Ultimately, healthier stakeholders equate to a healthier bottom line.” Investing in improving mental wellbeing in the workplace can generate positive returns to business, through both reduced costs and increased profitability. Undoubtedly, an effort to elevate mental health would assist in cementing employees and customers’ trust too.
Business prosperity is unavoidably linked to the world in which it operates.
It makes sense for businesses to play a role in mental health prevention and early intervention. Employee Assistance Programs and Workplace Health and Safety initiatives have their place. However, there is a need for business to more proactively combat the problem.
One of the proactive ways this can be achieved is through the delivery of preventative programs aimed at helping to build financial resilience, such as financial education.
Money101 have been delivering online financial wellbeing solutions since 2004.