Total Health Index provides insights into financial benefits of mental health strategy
By Bill Howatt
As an HR professional, how concerned are you about mental health and its impact on your organization’s performance? This question is typically answered by: “Not concerned,” “somewhat concerned” or “really concerned.”
The reasons why HR leaders are concerned about mental health vary. Some are becoming motivated to focus on mental health because of growing concerns about increasing disability costs (for example, more employees going on short- and long-term disability due to mental health issues).
Others are concerned that one in five employees is experiencing a mental health problem or illness, according to the Mental Health Commission of Canada (MHCC), impacting the employee and the organization. And concerns about associated issues such as bullying, work demand and burnout are growing.
Every day, 500,000 Canadians miss work due to a mental health problem or mental illness. By 2030, it is estimated mental health will have a US$16-trillion impact on the world economy, according to the Lancet Commission for Global Mental Health and Sustainable Development.
The MHCC has taken a leadership role in developing and promoting the benefits of the National Standard of Canada for Psychological Health and Safety in the Workplace for employers and employees to reduce the risk for mental health issues in the workplace.
Even with growing concerns and social awareness of the important role employers can play in reducing mental health issues in the workplace, too many HR leaders are still not sure how they can engage their senior leaders and provide them with a compelling business reason to pay attention to employee mental health.
Their challenge is being able to convince leaders to invest time and dollars in a mental health strategy and programs that are designed for prevention, early detection and intervention and support programs.
Total Health Index provides insights Morneau Shepell’s Total Health Index (THI) research provides insights into some of the financial benefits to organizations in improving their THI mental health pillar.
The mental health pillar is a composite of five smaller psychometric behaviour scales that have been scientifically validated: general mental health, anxiety, depression, burnout and coping skills. The pillar is not designed to provide any clinical diagnosis, it’s meant to provide employees complete insight into their general mental health.
Employees who score low are provided with recommendations, such as discussing their scores with a mental health professional to determine if there would be a benefit for further evaluation.
The research question asked was: “What, if any, is the financial impact for an organization for a one-point aggregated score improvement in the mental health pillar across all employees?”
The methodology was to compare employers’ year-over-year mental health pillar scores and productivity scales to determine the benefit of a one-point improvement. The results were both encouraging and interesting. For every one-point improvement in the mental health pillar score, our calculations estimate conservatively $153 per full-time equivalent (FTE) across all employees within the organization. The financial gain was driven by improvements in attendance, presenteeism and discretionary effort.
The following is a modest example of the financial benefit of a mental health strategy supported by evidence-based tools like the THI. Company ABC has 2,000 employees. Over a six-month period, it undertook the following initiatives:
• THI was delivered to obtain a baseline.
• The organization invested in a mental health strategy and adapted the psychological standard.
• It obtained senior leadership buy-in and support.
• It completed a psychological safety audit, defined key success metrics and integrated psychological safety measures within its OHS management system.
• It put in place a mental health steering committee made up of employees and leaders.
• It trained 150 leaders to support employees experiencing a mental health issue in the workplace.
• It enhanced its EAFP program by adding an internet-based cognitive behavioural therapy module.
• It implemented the program Not Myself Today.
• It provided employees with education on the benefits of resiliency and an option to take the University of New Brunswick Pathway to Coping program online.
The total cost for the strategy and programs, including usage, was $328,000 ($164 per FTE). In year one, the organization’s mental health pillar score was 67. In year two, the score rose to 71, a four-point rise over 12 months.
The financial impact: 4 x $1532,000 = $1,224,000. The benefit cost ratio was 2.73.
The important element with measurement is factoring in the financial risk of going down one point, as well as the benefits with respect to not only savings but increased employee productivity.
Investing in mental health is good business, provided there’s clarity and agreement on how success will be measured.
Another lesson from the THI research is that when organizations take action that improves all four pillars (physical, mental, work and life) they can realize a financial benefit.
Bill Howatt, Ph.D., Ed.D., is chief of research, workforce productivity at the Conference Board of Canada and former chief of research and development, workforce productivity, at Morneau Shepell. For more information and education about the company’s Total Health Index (THI), visit the company’s website at www.morneaushepell.com.
This is the 11th of a 12- part series on total health that will explore the links between employees’ health, engagement and productivity:
1. The total health framework
2. The 4 pillars of the Total Health Index
3. Senior leadership
5. Alcohol consumption
6. A respectful workplace
7. Manager effectiveness
8. Financial health
9. Going beyond traditional engagement
11. Mental health
12. Physical activity, nutrition, sleep