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The Workplace Mental Health Crisis (and How Employers Can Address It)

Updated Feb 21, 2023

Table of Contents

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  • Even before the COVID-19 pandemic, a work-based mental health crisis was emerging. Now, things are much worse.
  • In response to the crisis, the World Health Organization has released guidelines on workplace mental health.
  • Taking practical steps to support employees’ mental health is good for employees and the company’s bottom line.
  • This article is for business owners who want to create a healthy workplace where employees feel supported.

Studies have shown that mental health challenges, especially anxiety and depression, were steadily growing in the years leading up to the COVID-19 pandemic, particularly among young adults just as they were entering the workplace. The pandemic only compounded these issues and exacerbated the growing workplace mental health crisis. 

These trends have dramatic implications for entrepreneurs and business owners. Employees who struggle with their mental health are less productive, more likely to miss time and more likely to job hop, taking institutional knowledge with them. As an employer, you can play a critical role in supporting employees’ mental health and preventing worker burnout through policies, benefits and the organizational culture you create.

A growing workplace mental health crisis

Mental health challenges are widespread and growing. More than 20% of U.S. adults experience mental illness annually, with 5% experiencing serious mental illness. Even before the COVID-19 pandemic arrived in 2020, mental illness was on the rise among the U.S. workforce.

When the pandemic hit, this trend rapidly accelerated, with the prevalence of anxiety and depression increasing by a staggering 25% worldwide, according to the World Health Organization (WHO). In a 2021 survey, the American Psychological Association found that nearly 4 in 5 employees experienced work-related stress in the month prior and that 60% reported negative impacts of that stress, including a lack of motivation and a lack of energy. 

In response to these issues, the WHO issued new workplace mental health guidelines, which recommend that employers improve workplace conditions, provide better mental health training for managers, train employees on mental health self-management, and educate human resources staff on how to work with employees or job applicants who are facing mental health challenges. The guidelines also include information regarding how soon employees should return to work after facing a mental health crisis. 

Mental health is more than just a personal issue

Amy Edelstein, a bestselling author and the founder and executive director of Inner Strength Education, stressed that mental health issues cannot be viewed in isolation. 

“Our social, emotional and mental health impacts everything from our immune systems (think cost of employee absences or project delays) to quality of communication to ability to manage pressure,” Edelstein said.

Research by the WHO bears this out: The organization estimates that 12 billion working days are lost annually to depression and anxiety, costing businesses $1 trillion in lost productivity. 

In particular, burnout – a more nebulous mental health issue but one that is spiking sharply – is a threat. In a pre-pandemic study by Kronos Inc. and Future Workplace, nearly half of human resources leaders said employee burnout was responsible for between 20% of 50% of their workforce turnover, and almost 10% of those leaders believed burnout was causing more than half of annual turnover.

Did You Know?Did you know

The average cost of employee turnover is thought to be roughly six to nine months of an employee’s salary or wages. Consistent churn among your workforce can become incredibly expensive.

Employers can step up to support employee well-being

Employers have an essential role to play in this crisis, as they can provide a critical layer of support for employees before, during and after mental health challenges arise.

“When employers take a few small steps, it creates an environment for staff to value their well-being and do what’s needed,” Edelstein said.

Though many companies are talking about the importance of their employees’ mental health, action has been slow. According to the Mental Health Benchmark report by CCLA, the largest charity investment management firm in the U.K., a massive gap exists between companies’ commitments and the actions they are taking: More than 9 in 10 companies see mental health as a critical workplace issue, but only 1 in 3 have established formal objectives and targets for addressing it.

You can take meaningful steps in your own workplace in the following ways:

  1. Be specific. When you tell employees that you care about their mental health, get specific. For example, “We have a ‘no emails after 6 p.m.’ policy,” or “We expect people to take their vacation days, and we’re tracking to make sure you do,” means more than a general statement such as “We care about work-life balance.”
  2. Establish and promote an EAP. Employee assistance programs (EAPs) are an increasingly popular employee benefit: More than 97% of large companies and 75% of midsize companies now offer EAPs. Through these programs, employees have a simple entry point for a variety of mental health services, including assessments, short-term counseling, referrals and follow-up services. However, as of 2016, fewer than 10% of employees who had access to EAPs were using them, primarily because they didn’t know they had one or didn’t know how to access the benefits. If you’re going to invest in providing an EAP, make sure you promote it through onboarding and internal communications to raise awareness and reduce the stigma.
  3. Build mental health into the workday. Edelstein advocates for office-wide time dedicated to mental health practices. “Providing a 30-minute virtual stress-reduction session during regular work time periodically gives everyone the opportunity to share a space of wellness,” she said. “It also shows that the company values employees’ well-being enough to dedicate valuable time to it.”
  4. Trust employees. Time and attendance policies signal trust, or a lack thereof. As long as employees aren’t exceeding the number of allowable sick or personal days per year, don’t ask employees what they’re using them for, and make sure they know you won’t ask. Knowing that you can take a mental health day or use a sick day to care for a loved one without raising eyebrows reduces stress. Better yet, break down the barriers between vacation days, personal days and sick days, and let employees take the time they need in the ways they need it.
  5. Prioritize diversity, equity and inclusion (DE&I). According to research by The Hartford and the National Alliance on Mental Illness, more than one-quarter of Black workers rate their mental health as fair or poor – the highest rate of any group. The same study found that 29% of Black and 42% of Asian American/Pacific Islander employees believed that stigma was preventing their colleagues from seeking help. Stronger DE&I policies – especially DE&I policies that intentionally include a focus on employee mental health – can help to address these disparities.

As an entrepreneur, prioritizing mental health is important for more than just supporting your employees and setting a good example; it’s also good for you. Research has found that entrepreneurs are 50% more likely than the public at large to struggle with mental health, and anything you do for your employees’ mental health can benefit yours as well.


As an employer, you set the tone on mental health in the workplace through your policies and actions. Establish clear, specific policies and encourage your employees to take advantage of benefits programs and paid-time-off policies.

Taking a positive psychology approach

Focusing on mental health is not just about supporting employees when challenges occur. In recent years, a movement has emerged within psychology to focus not only on pathologizing and treating those who are struggling but also on considering actions that everyone can take to find joy and meaning in their lives.

Employers can proactively promote positive mental health by giving employees opportunities to feel good about their work identities by learning new skills and growing in their roles. 

According to Sarah Sheehan, president and co-founder of Bravely, a personalized learning and coaching platform, mentors and coaches should not only help employees develop skills and advance their careers but also offer critical emotional support when needed.

“People who have access to coaching are able to develop skills to grow in their roles while also experiencing lower stress, greater resilience, and ultimately higher performance that contributes to improved business outcomes,” Sheehan said.

Forging trusted relationships and promoting positive interactions in the workplace can also boost employee well-being and support mental wellness, Edelstein said.

“Promote positive conversations,” she said. “We all have mirror neurons, and when we share a small thing that was enjoyable, it lifts up our colleagues.” 

Modeling conversations that make people feel good, even if those conversations don’t pertain directly to work, is a simple way for business owners and managers to create a happier workplace.

Key TakeawayKey takeaway

Promoting mental health includes both addressing mental illness and encouraging positive interactions and attitudes.

Mental health: good for employees and the bottom line

Healthy, happy employees are productive and tend to stay with one employer, take on new responsibilities, and grow in both their roles and within the organization. At a time when it’s harder than ever to find and retain talented workers, investing in employees’ mental health is not just the right thing to do; it’s an essential human capital strategy.

Ross Mudrick
Ross Mudrick
Staff Writer at
Ross Mudrick is a writer specializing in a range of issues including economic opportunity, community development, and arts and culture. He has written for dozens of organizations including the Trade Federation Office of Canada, New York City Economic Development Corporation, IMPACT2030, Realized Worth Institute, and He earned his bachelors from University of Wisconsin and his MPA from New York University. Ross is passionate about solidarity and teaching his daughter how to enjoy doing difficult things.
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