NewsResearchWhat does mental health cost UK employers? Up to £56bn/year says Deloitte

The overall increase in total costs is due to higher staff turnover. Deloitte’s survey also found that 28% of UK employees either left their job in 2021 or they are planning to leave it in 2022, with 61% of respondents saying this was due to poor mental health.

Young people (18-29 years old) were found to be most likely to have moved jobs or be considering a job move. One in five (21%) young people surveyed said they were planning to leave and one in four (24%) said they had intentionally left their job in the past 12 months. Of those who had intentionally left or planned to leave their job, two in three (65%) said this decision was driven by poor mental health.

Headlines from Deloitte’s survey:

• Third in a series of reports found an increase of 25% in the cost of poor mental health to employers compared to 2019, based on a new Deloitte study.
• New Deloitte survey also found that 28% of employees have either left in 2021 or are planning to leave their jobs in 2022, with 61% citing poor mental health as the reason they are leaving.

Great resignation is a driving force

Elizabeth Hampson, Deloitte director and author of ‘Mental health and employers: the case for investment – pandemic and beyond’, said: “We have seen poor mental health costs UK employers up to £56 billion a year, based on a new Deloitte survey, an increase of 25% in the cost of poor mental health to employers compared to 2019. Mental health issues are a strong driver for the ‘Great resignation’. Long hours, increased stress and job insecurity have had a detrimental impact on quality of life during the pandemic. People are leaving their jobs, re-evaluating their careers and changing occupations in large numbers”, she says.

“Burnout among employees, such as feelings of exhaustion, mental distance from the job and reduced job performance, have been more evident during the pandemic. Measures by employers to improve mental wellbeing should not only benefit employees themselves but should also reduce employment costs such as recruitment costs and provide broader societal benefits.”

Jackie Henry, managing partner for people and purpose at Deloitte UK, believes Covid-19 has given us an opportunity to tackle stigma and improve awareness. “Leadership should set the tone at the top: whether continuing to invest in training to help managers and employees spot signs of poor mental health and understand how to reach their employees and help.”

Emma Mamo, Head of Workplace Wellbeing at Mind, said: “It’s shocking but not surprising that the cost of poor mental health to employers is now up to a huge £56 billion per year. We know that the pandemic has taken a huge toll on the mental health of the nation, including our colleagues. A 2021 survey by Mind of over 40,000 staff working across 114 organisations taking part in our Workplace Wellbeing Index revealed that two in five (41 per cent) employees said their mental health had worsened during the pandemic.

Covid-19 has given us an opportunity to tackle stigma and improve awareness.

The recruitment challenge

“Recruiting and retaining talent is hugely important to employers, and we know employers who invest in staff wellbeing are more likely to report having staff who are happy, productive and less likely to leave,” says Emma Mamo, Head of Workplace Wellbeing at Mind. “This latest report from Deloitte suggests employers see a return of £5.30 on average for every £1 invested in staff wellbeing so it’s never been timelier to prioritise staff mental health, especially given staff are once again adjusting to new ways of working, with many employers trialling hybrid working.”

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Notes on the report:

Deloitte’s report reviews the effects of the COVID-19 pandemic on the mental health of employees and on the costs to employers. The findings are based on a YouGov survey of nationally representative sample of 3599 individuals in the UK. The survey was conducted in Autumn 2021. The findings fed into Deloitte’s models for the costs to employers of poor mental health and the returns on investing in support measures to improve mental wellbeing.

*These estimates were based on the results of an updated version of Deloitte’s model that calculated the costs of poor employee mental health. Unlike in 2019, this year’s figures include YouGov consumer research
** Respondents were asked to choose their top three new way of working that would improve their mental health, wellbeing and stress.