The rising cost of workplace mental health injuries

Monday, 12 October, 2020

The rising cost of workplace mental health injuries

Allianz has reported that the cost of workers compensation claims relating to mental health (primary psychological workers compensation claims) has increased by 80%, rising an average of 22% each year since 2017. The findings are part of the Allianz Future Thriving Workplaces report, which also reveals that 80% of Australian employees surveyed want their employers to take action to address mental health in the workplace.

The report findings illustrate the long-term impact mental health conditions can have on individuals’ holistic wellbeing. On average, benefits paid to primary psychological injury claims are up to four times higher per annum than claims relating to physical injuries, and have a longer time to recovery than physical injuries — nearly 75% of primary psychological claims take time off work compared with 50% of physical injuries.

Data from SafeWork Australia shows that $543 million was paid in workers compensation for work-related mental health conditions, highlighting the scale of the issue and reinforcing the importance of employers proactively addressing employees’ mental health.

COVID-19: a catalyst for change

Expedited by COVID-19, one in two managers surveyed say they now feel an increased responsibility for their employees’ mental health at work, and almost one-half of employers (47%) think there is a stronger need for mental health initiatives in their industry.

The Allianz Future Thriving Workplaces report revealed that some employers have already taken action by starting to implement programs during the COVID-19 pandemic. Six in 10 Australian workers surveyed said their employers had already introduced mental health initiatives, and 55% of managers said that they or their organisation plan to implement mental health initiatives within the next 12 months.

The Chief General Manager of Workers Compensation at Allianz Australia, Julie Mitchell, said, “As employers, we’re unequivocally concerned about our employees’ wellbeing. We know that improved mental health in employees across all industries greatly benefits employers and their businesses. It positively impacts individuals’ productivity, talent retention and ultimately, business performance.

“Yet, the challenge now is to bridge the gap between awareness of mental ill health in the workplace and taking action. We can’t take a scatter-gun approach. The priority is addressing each individual’s wellbeing — as thriving employees will lead to positive team and business outcomes. Our actions need to be meaningful to employees and embedded throughout all organisations.

“Allianz is committed to empowering employers with the right knowledge, resources and initiatives to better support employees facing mental health issues. Especially as we sadly anticipate seeing a rise in workers compensation psychological claims as a result of the COVID-19 pandemic, highlighting it’s even more important for Australian workplaces to implement the required changes to tackle these challenges now and work to prevent them in the future.

“We believe that prioritising the wellbeing of employees, particularly the rising number of Australians experiencing mental health conditions, is key to building future, thriving workplaces,” she concluded.

Overcoming barriers to achieving mentally healthy workplaces

The report identified the main barriers that employers need to tackle to drive positive change — three-quarters of Australian employees (76%) noted there are factors preventing mental health initiatives from being implemented at their workplace.

Stigma appears to be a key hurdle to addressing mental ill health in the workplace, with four in 10 surveyed employees (38%) feeling that mental health issues will not be taken as seriously as physical illnesses. However, this is a significant improvement from last year’s Allianz Awareness into Action report, which found eight in 10 (85%) believed that managers are more likely to think an employee’s need for time off is genuine if they say they are suffering from a cold or flu rather than stress or anxiety.

Allianz workers compensation data has also revealed that work-related harassment and work pressure are the most prevalent causes of primary psychological claims. The most commonly reported workplace behaviours that employees claim to have negatively influenced their mental health are:

  • Ineffective or unfair management (39% of employees impacted).
  • Workplace culture (33% of employees impacted).
  • Bullying and harassment (24% of employees impacted).
  • Organisational structure (24% of employees impacted).

Leadership-driven empathy fosters mentally healthy workplaces

Australian employees feel the first step to mentally healthy workplaces should start with a conversation about mental health. Three in four Australian employees surveyed (75%) agreed that more dialogue and discussion around mental health and wellbeing is needed at work.

Awareness days — such as Mental Health Awareness Month in October — can be a means of encouraging conversations and garnering advocacy to destigmatise mental ill health — a key factor in implementing effective mental health programs for employees.

Matthew Johnstone, mental health expert and collaborator on the Allianz Future Thriving Workplaces report, said employers can work collaboratively with their employees to develop the right attitudes, resources and initiatives to best respond to their needs.

“Employers don’t need to see mental health strategies as being difficult, box-ticking or costly to implement. Leaders can simply start with empathy, conversation, a good ear and a plan to properly address the emotional needs of their people.

“Once they have that mindset, job design, employee–employer relationships, work-life balance and collaborative workspaces are key elements that businesses can improve on to help build a mentally healthy workplace. A company, after all, is only as good as the people who work for it. Invest in them and they will deliver returns far greater than just profit,” he said.

The Allianz Future Thriving Workplaces report explores the top causes of mental ill health in the workplace, the top barriers employers and employees are facing, and what future mental health strategies may look like. Alongside the report, Allianz has released a range of resources to help employers — across all industries — to foster mentally healthy workplaces, whether that be in-person or virtually.

With the new ways of working in mind, the report has identified five key areas that employees would like to see improved:

  • Built-in flexibility: 41% would like flexible work options.
  • Extra time off: 38% want additional paid leave, including mental health leave.
  • Proactive check-ins: 34% would like more open conversation and employee check-ins.
  • Wellbeing programs: 33% would like employers to introduce workplace wellbeing programs.
  • Awareness and prevention training: 32% are keen to see the introduction of mental health awareness training.

Image credit: © Wilusz

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