Employees’ mental health costing economy ‘R250 billion’ per year. Here is why

Many of the working class around the world experience common mental health challenges such as stress, anxiety, depression, substance abuse and burnout.

Employees’ mental health challenges can caused by various factors including including their working environment, relationship with colleagues, and their work-life balance.

Dr Frank Magwegwe, Principal researcher and senior lecturer at Gordon Institute of Business (Gibs) says employee mental health challenges cost the economy an estimated R250 billion in lost productivity per year, which reduces South Africa’s gross domestic product (GDP) by up to 4.5% each year.

Gibs released its Health Workplace Well-Being Report in October. According to the report, most employees do not voice out their mental health challenges due to a lack of supportive workplace policies.

State of employees’ mental health in the country

The report by Gibs investigated six domains: mental, physical, financial, social, emotional, and work.

It shows that there is a stigma attached to experiencing mental health challenges that still prevents and prevents many employees from disclosing and addressing their well-being issues.  

Alon Lits, co-founder of October Health says their data shows that well-being is enhanced in workplaces where employees feel comfortable sharing concerns without fear of negative consequences.

“Therefore, normalising experiences of stress, anxiety and depression, promoting open communications around well-being topics and proactively making resources available to employees, help to create a work environment that enhances productivity and performance.”

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How employers can contribute to employees’ mental health

Dr Magwegwe is of the view that leaders and managers in the workplace can directly influence the mental and emotional state of employees.  

There needs to be initiatives that can boost the wellbeing of employees, that will result in enhanced workplace productivity and resilience. This will be achieved through reduced absenteeism, improved employee engagement, and a supportive work environment.

“When employees feel supported, they are more likely to perform at their best, be highly engaged, and remain loyal to the organisation that provides not just employment and security, but a sense of purpose and fulfilment.”

Racial differences play a role in employee’s mental health

The report shows that age, gender, and income do not have a significant direct impact on the overall well-being of employees. However, racial differences were noted with White participants reporting lower overall wellbeing compared to Black participants.

“Overall, participants revealed that despite the prevalence of mental health challenges, they are surprisingly resilient and they recorded relatively high well-being scores except for the financial domain,” reads the report.

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The cost of living and mental health challenges

The report also quotes the FinMark Trust (2024) annual FinScope Consumer South Africa for 2023 survey. The survey revealed that the rising cost of living has impacted South African households adversely, with the purchasing of daily necessities under strain.

“According to the study, living expenses, which include groceries, energy, transportation, and communication, account for about 85% of monthly income, while groceries make up 30.4% of expenses, followed by energy (11.5%), transportation (9.1%), communication (8.8%), and routine household maintenance, rental, and rates (8.5%).

Corporate cultures

They have noted there are corporate cultures that emphasise performance and resilience, often equating mental health challenges with weakness.   

“Such corporate cultures operate with an either-or mindset, prioritising either well-being or performance, rather than embracing a mindset that integrates both well-being and performance.”

Employees may fear job security and career repercussions, leading them to hide their struggles.

An estimated 80% of people who need mental health care do not get it because of issues including affordability, access to care, and stigma.

ALSO READ: Break the cycle of your finances affecting your mental health

Colleagues’ roles in each other

The report adds that the role of colleagues who create a sense of emotional connection through times of success and hardship must not be undervalued.

“Managers can proactively initiate a conversation if they notice an employee is not their usual self or showing signs of struggle. Waiting for the employee to address the issue may prolong difficulties and negatively impact performance and well-being.”

The researchers of the report say that the approach by managers should be gentle and supportive, emphasising concern for wellbeing, rather than focusing solely on work performance.

About the report

The study surveyed 500 local participants who were working full-time or part-time or were self-employed and were recruited from the African Response research panel using an online questionnaire.

“Organisational factors, such as the role held at a company, work location (all in-person, hybrid, or all remote), and perceived healthy work environment, had no significant association with overall well-being.”

The report is a collaboration between Gibs and tech innovator, October Health. The tech innovator provides organisations with an AI-driven digital platform that enables proactive mental health care.

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