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Employee stress and mental health issues – what are they costing your business?


$317.5 billion – it’s a figure that gets employers to sit up and take notice. According to the Centers for Disease Control and Prevention (CDC), this is the total for direct and indirect costs of treating mental health disorders annually. Numbers like this – and the growing interest after our “stress in the workplace” post in April – prompted us to dig a little deeper on the topic.

Not only are employers paying the medical expenses for employees who suffer workplace injuries resulting from stress and mental health disorders, there are also productivity-related costs that can have a significant impact on their bottom line.

The Center for Employee Health Studies at the University of Illinois at Chicago (UIC) recently released the results of a study on the consequences of stress in the workplace. It revealed key information that may help our industry guide employers as they manage this critical issue.

Several types of mental health disorders are tied to increased injuries in the workplace and are described in the study as dimensions of stress, including depression, anxiety and post-traumatic stress disorder (PTSD). The medications prescribed to treat these disorders can also impact injury rates and productivity.

Statistics in the study from CDC and the National Institute of Mental Health show that over 25% of all adults in the United States currently have a mental illness and nearly half will develop at least one during their lifetime. Injury rates are two to six times higher among individuals with a mental illness than in the overall population.1

Absenteeism related to mental health disorders is among the biggest costs for employers, and the study reported that stress, depression and anxiety were repeatedly ranked as three of the top five causes.

According to the UIC study, if untreated, consistently high stress can become a chronic condition, which can result in or exacerbate mental health conditions as well as chronic physical conditions like cardiovascular disease, cancer, diabetes, obesity, hypertension, asthma, muscle pain or a weakened immune system. These conditions not only diminish the well‐being of workers and increase the employer’s health benefits expense, they contribute to injury incidence rates and outcomes.2 The study also found that healthcare costs are nearly 50% greater for workers reporting high levels of stress due to substantial increases in health service utilization.

Employers in all industries must be prepared to manage the various types of employee stress and mental health issues, while ensuring the safety and productivity of their workforce. With over 40 years of experience in the workers’ compensation industry, Sedgwick understands the impact stress can have on businesses.

The study outlines several steps employers can take to control costs and reduce injuries, such as promoting the value of the employee’s work and showing them how it contributes to the company’s mission, testing for legal prescription drugs within potentially impairing categories and offering temporary jobs for employees who reveal using certain types of prescription drugs.

In the coming weeks, our Sedgwick Connection blog will include a series of articles on stress and mental health concerns in the workplace. Our experts will provide information and guidance on key topics, including:

  • Issues related to employees who take anti-depressants and anti-anxiety medications, and those who over-medicate or do not take their prescriptions at all
  • The correlation between stress, productivity and absenteeism
  • Military and non-military PTSD
  • The legal, moral and ethical concerns for employers

Sedgwick has developed a summary of the full research conducted by the Center for Employee Health Studies at UIC. Our summary and the UIC study are both available on our website.

As we continue to address mental health and stress-related issues in the workplace, I invite you to share your thoughts.

Darrell Brown, Chief Performance Officer

1 Centers for Disease Control and Prevention, 2011.
2 Dopkeen, J.C.; DeBois, R. (March 2014). Stress in the workplace. A policy synthesis on its dimensions and prevalence. The Center for Employee Health Studies at the University of Illinois Chicago.

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