Sizing the Employee Well-Being Challenge

Employee mental health is a growing challenge and a clear concern for senior people leaders. While a web of complex societal factors— geopolitical unrest, political polarization—play a role, work-based stress is a major contributor as well.

Asked about their top stressors, 49% of employees cited high workloads. Meanwhile, 88% of staff reported feeling burned out at least some of the time. Increasingly attuned to this challenge, CHROs are ramping up investments. But in a world of limited resources, they’re asking which are worthy?

The Link from Mental Health to Productivity, Cost, and Turnover

Estimates suggest employee mental health challenges cost employers about $5 million per 1,000 employees each year.

Organizations are seeing higher Employee Assistance Program (EAP) usage and rising drug costs for employee health care. Requests for mental health leave have also skyrocketed, with requests for mental health leave or accommodations increasing by 74% in 2024.  In addition to its impact on leave, low employee mental health also impacts productivity. Thirty-seven percent of employees report that they’ve felt so overwhelmed that it lowers their job performance, and 70% of employees say they are looking for a new job because of burnout. Multiply that by the standard cost of turnover, and this becomes very expensive.

The Employer Response

In response, many companies have increased or plan to invest more in their employee well-being offerings. However, these investments don’t always achieve the desired impact. Less than a quarter of employees strongly agree that their organization cares about their well-being, a sharp decline since the COVID-19 pandemic. Furthermore, even when employers do offer well-being benefits, employees don’t always know about them or feel that they can use them.

That said, mental health benefits show a large return on investment when done right. For example, employees who agree that their organization cares about their well-being are seven times more likely to recommend their organization and 4.4 times more likely to be engaged at work. Similarly, they are 66% less likely to be job hunting.

Proven Well-Being Strategies to Prioritize

While employee well-being strategies are not “one size fits all,” these six approaches—on top of counseling within your benefits plan—consistently provide outsized returns with relatively modest costs.