Supporting Employee Mental Health

Mental Health continues to be top of mind for employers across Canada. There is good reason for this focus in many industries and organization sizes as mental health claims have doubled since 2019. According to Sun Life, 40% of LTD claims in 2024 are related mental disorders.

The current climate of economic uncertainty due to the ongoing trade war between Canada and the United States will certainly increase demand for all kinds of mental health supports including prescription medication, employee demand for flexible spending accounts, mental health practitioners, and employee and family assistance programs.

In this article, we will outline the importance of addressing employee mental health needs and provide practical tips that you can use in your organization to develop a comprehensive plan without breaking the bank.

Supporting Mental Health is Good for Business

According to the World Health Organization, depression and anxiety cost the global economy an estimated $1 trillion per year in lost productivity. For example, a study by the American Psychiatric Association found that employees with unresolved depression experience a 35% reduction in productivity.

When organizations invest in the mental health of their workplace, they experience the following benefits:

·         Increased productivity and performance

·         Enhanced employee engagement and retention

·         Reduced Healthcare costs

·         Improved corporate reputation among Millennials and Gen-Z in particular

·         Reduced absenteeism

Mental Health is a Vital Component of Employee Well-being

People can experience mental health symptoms on a continuum or spectrum. While an individual may not have all the symptoms that comprise a clinical mental disorder, any one symptom can be detrimental to productivity at work.

Today, 40% of Canadians say they’re concerned about losing their job amid the ongoing tariff spat. While employers re-craft budgets and hiring projections, employees who may be nearing their planned retirement date may be concerned with how recent markets will impact retirement income.

Ways to Support Employee Wellbeing

On an organization level, workplaces can be structured to promote protective factors and reduce risk factors associated with mental health at the individual and organizational levels.

The table below outlines what factors employers can use to promote protective factors to enhance employee mental health scores. This has been reproduced from the American Heart Association’s report on mental health workforce crisis.

	Protective Factors	Risk Factors
Work Content
Workload	Manageable workload	Excessive workload
Participation	Able to participate in decision-making	Inability to participate in decision-making
Job Control	Able to choose how to complete work	Unable to choose how to complete work
Job Content	Safe and diverse tasks	Monotonous, unsafe or unpleasant tasks
Work Context
Recognition	Reward for performance	Lack of reward
Organizational role	Clearly defined role and responsibilities	Role conflict and ambiguity
Interpersonal	Supportive supervision, positive relationships	Unsupportive supervision, isolated or solitary work
Working environment and condition	Safe physical environment	Inadequate physical environment
Home-work interface	Support at home and at work	Conflicting demands at home and work. Lack of support for home at work and lack of support for work at home
Inequity (fairness)	High perception of equity and fairness	Low perception of equity and fairness (e.g. Workload, salary, and promotion) Poor management or organizational change (e.g. Downsizing)

By focusing on what you can do as an employer to tweak work content and context, you may be able to improve the mental wellbeing – and your bottom line – in the process.

Financial Stress is Driving Mental Health Distress

A survey of 3,000 employees in fall 2024 found that mental health scores regarding financial risk are experiencing its most dramatic decline since the launch of the TELUS Health mental health index in 2020. This was before the start of the current US/Canada trade dispute.

While cost of living was identified as the most significant driver of employee’s feelings of anxiety around their financial future, lack of retirement savings also emerged as a significant driver.

In addition to the work content and context factors identified below, a group savings plan can help improve employees’ sense of financial well-being. The ease of payroll deductions, the power of matching contributions, and financial literacy education that go along with many platforms can help address this driver of employee mental health.

Flexible Spending Accounts

Now more than ever, employers are struggling to build benefits programs that meet all employee needs. The demand for flexibility is essentially a request for employees to be able to invest in what matters most to their well-being.

From weight-loss drugs that may not be covered under a core benefits plan, to the cost of non-CRA eligible expenses such as vitamins and supplements, flexible spending accounts are a great way to give employees the steering wheel and choose how to allocate your benefits investment.

If an employee’s furry friend is what gets them outside walking every day in nature, why not support this important component of their physical and mental wellbeing?

As a bonus, flexible spending accounts aren’t subject to the same inflationary pressures as insured plans; the pool of money you provide employees doesn’t change unless you want it to.

Employee and Family Assistance Programs

Technology has introduced a new age of Employee and Family Assistance Programs (EFAPs), and options now include add-ons for virtual health care, financial wellness coaching, legal assistance, and more.

There is an opportunity for employers to evaluate the efficacy of the current offer and look at other options in the marketplace. While having two carriers can be an administrative burden, things like annual billing can help reduce the workload on admin staff.

Evaluating EFAP offerings based on ease of access, availability of in-person or online only counselling sessions, annual limits and cost can help understand where your offering stands in relation to what is currently available.

In Summary

Supporting employee mental wellbeing is not a one-step exercise, and there is not a single solution out there that can cure the current state of mental distress in workplaces across Canada.

We’ve addressed three benefits strategies that employers can use to help improve employee mental health and wellbeing in addition to structural aspects of work content and context.

1. Enhance Financial Literacy and provide access to a group savings program

2. Offer a Flexible Spending Account or Taxable Wellness Account

3. Ensure that your Employee and Family Assistance Program is meeting the needs of your employees and communicate the services offered through the program.

   
   

By considering the factors that can support mental health and making small changes or investments to target mental wellbeing, employers can do a lot to help employees, and their families thrive.