Mental health issues like stress, anxiety, and depression are increasingly common these days, yet their impact on work performance is often overlooked. For HR professionals and people managers, understanding this connection is essential to fostering a productive, engaged, and resilient workforce. In this article, we’ll explore how mental health affects work performance and what organizations can do to support employees effectively.

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Mental Health and Work Performance Connection

Mental health refers to a person’s emotional, psychological, and social well-being. It involves:

In the workplace, it plays a crucial role in shaping how employees think, feel, and behave. Hence, a mentally healthy workforce is more engaged, creative, and resilient, while poor mental health can lead to decreased productivity and overall job dissatisfaction.

Now, mental health issues can manifest in different ways, impacting employees and businesses alike. Below are some key areas where poor mental health affects work performance:

  • Focus and Concentration: Anxiety and stress can impair cognitive function, making it harder for employees to stay focused, meet deadlines, and think creatively. Research from the American Psychological Association (APA) suggests that chronic stress impairs decision-making and problem-solving abilities.

  • Absenteeism and Presenteeism: The World Health Organization (WHO) estimates that depression and anxiety cost the global economy $1 trillion annually in lost productivity. Employees struggling with mental health challenges may frequently miss work (absenteeism) or show up but struggle to perform at their best (presenteeism).

  • Team Dynamics and Morale: Poor mental health doesn’t just affect individual performance; it can impact entire teams. A stressed or disengaged employee can lower team morale, reduce collaboration, and even contribute to a toxic work environment.
mental health is the primary reason for leaving job according to genz and millennials

Key Indicators of Mental Health Issues Affecting Work Performance

Recognizing the warning signs of mental health struggles in employees is critical for workplace mental health and productivity. We have gathered below some key indicators:

  • Decline in Productivity: Employees facing mental health challenges may struggle to complete tasks, have difficulty concentrating, or fail to meet deadlines (also, this may affect more employees with mental health conditions like autism, dyslexia, bipolar disorder, and paranoia.)

Moreover, this decline in performance can lead to errors, missed opportunities, and decreased overall efficiency. Notably, 47% of employees exhibit 'presenteeism'—attending work without being productive due to poor mental health.

  • Frequent Absenteeism or Tardiness: Employees experiencing mental health struggles may frequently call in sick or arrive late to work. This can stem from burnout, anxiety, or depression, ultimately disrupting workflow and increasing workload for other team members.

In fact, in 2023, mental health-related leaves of absence surged by 33% compared to the previous year, indicating a significant rise in absenteeism due to mental health issues. 

  • Withdrawal from Colleagues or Reduced Engagement: A lack of participation in meetings, avoidance of social interactions, or disengagement from work tasks can indicate mental health challenges. This may lead to isolation, reduced collaboration, and a decline in overall team morale. Interestingly, a European survey found that 38% of workers are at high risk of poor mental health.
  • Increased Irritability or Emotional Outbursts: Employees struggling with mental health issues may experience mood swings, frustration, anger, or emotional breakdowns, making it difficult to maintain positive relationships with colleagues and managers.
  • Difficulty Adapting to Change: Mental health struggles can also make employees resistant to new responsibilities, changes in work dynamics, or organizational shifts, leading to slowed progress and decreased adaptability. 

By understanding these indicators and the associated data, HR professionals and managers can proactively implement mental health and performance management strategies to support employees. 

Indicator Description Impact on Work Performance
Decline in Productivity Employees struggling with mental health challenges may have difficulty focusing, completing tasks, or maintaining their usual performance levels. Decreased efficiency, missed deadlines, and increased errors in work.
Frequent Absenteeism or Tardiness Employees with mental health struggles may take more sick days or arrive late to work due to burnout, anxiety, or depression. Increased workload for other employees, project delays, and reduced team cohesion.
Withdrawal from Colleagues or Reduced Engagement Employees may avoid meetings, social interactions, or collaborative projects, leading to isolation. Lower morale, lack of collaboration, and diminished overall team performance.
Increased Irritability or Emotional Outbursts Stress, anxiety, or depression can manifest as mood swings or frustration. Strained workplace relationships, conflicts, and reduced teamwork.
Difficulty Adapting to Change Employees experiencing mental health issues may struggle with adapting to new roles, responsibilities, or workplace changes. Resistance to innovation, slowed progress, and disengagement from organizational goals.

How Mental Health Affects Workplace Productivity

Mental health challenges such as anxiety, stress, and depression significantly impact both employees and businesses, leading to reduced productivity, increased absenteeism, and higher turnover rates. 

Understanding these effects is crucial for implementing effective mental health and performance management strategies., let’s check some:

Cost of Lost Productivity Due to Mental Health Challenges

  • Globally: The World Health Organization estimates that depression and anxiety result in the loss of 12 billion workdays annually, costing the global economy $1 trillion each year.​
  • The UK: Poor mental health costs UK employers approximately £51 billion per year, with presenteeism—employees working while unwell—being the largest contributor at around £24 billion annually
  • The US: Untreated mental health issues cost U.S. employers between $31 billion and $51 billion annually in lost productivity due to absenteeism and presenteeism. ​The Healthovation

Now, these stats are dramatic but more and more organizations are interested in offering EAP services and mental health support to their teams. This means investing in employee mental health not only benefits individuals but also enhances organizational performance:​

  • Return on Investment: For every £1 spent on supporting employee mental health, UK employers receive an average return of £4.70 in increased productivity.
  • Employee Preferences: A survey by the American Psychological Association found that 92% of workers consider it important to work for organizations that value their emotional and psychological well-being. 
  • Performance Correlation: Studies indicate a positive relationship between employee well-being and job performance, with higher well-being associated with increased productivity and job satisfaction. ​
Mental Health Challenge Impact on Employees Impact on Business
Anxiety Increased worry and fear, leading to difficulty concentrating and making decisions. Reduced productivity, higher error rates, and potential safety incidents.
Stress Physical and emotional exhaustion, resulting in burnout and decreased motivation. Increased absenteeism, lower employee engagement, and higher turnover rates.
Depression Persistent sadness and loss of interest, causing withdrawal from work activities. Decreased productivity, increased sick leave, and higher healthcare costs.
Burnout Feelings of energy depletion and cynicism, leading to reduced professional efficacy. Lower organizational commitment, reduced customer satisfaction, and increased recruitment costs.
Substance Abuse Reliance on substances to cope, impairing judgment and performance. Increased workplace accidents, higher insurance premiums, and legal liabilities.

Addressing these challenges through comprehensive mental health and performance management strategies is essential for promoting a healthy work environment and enhancing overall workplace mental health and productivity.

To learn more about mental health conditions in the workplace, please check our dedicated blog category.

Role of Managers and HR in Addressing Mental Health

Managers and Human Resources (HR) professionals play pivotal roles in fostering a work environment that prioritizes employee mental health, which is essential for enhancing workplace mental health and productivity. Their responsibilities usually include:​

  • Creating a Supportive Culture: HR professionals are instrumental in cultivating a workplace culture that promotes mental well-being. By implementing effective strategies and programs, they ensure employees feel valued, heard, and supported. 
  • Providing Training and Resources: Managers should be equipped with the necessary training to recognize signs of mental health issues and respond appropriately. This includes understanding how to support employees experiencing mental health challenges without overstepping professional boundaries. 
  • Implementing Supportive Policies: HR is responsible for developing and enforcing policies that support mental health, such as flexible work arrangements and access to mental health resources. These policies should align with organizational goals and promote a healthy work-life balance.

However, HR and managers are not responsible for forcing employees to disclose personal mental health issues, making medical decisions on their behalf, or assuming liability for their mental health outside of workplace-related factors.

To learn more about the role of HR regarding employee mental health, please read our specialized blog.

meditopia for work has a 42% engagement rate, making an ideal EAP to improve work performance

Strategies to Improve Workplace Mental Health and Productivity

Implementing targeted strategies can significantly enhance employee well-being and organizational performance. Key approaches include:​

1. Implementing Employee Assistance Programs (EAPs)

Overview: EAPs provide confidential support services to employees, helping them address personal or professional challenges affecting their well-being.

Why It Matters: Since they offer direct access to mental health professionals, reducing stress, improving coping strategies, and increasing overall productivity. They also enhance employee empowerment, because the resources are at their reach whenever needed.

Key Steps:

  • Partner with licensed counselors or mental health providers.
  • Promote EAP availability through company-wide communication.
  • Ensure confidentiality to encourage employee participation.

Impact: Improved employee resilience, reduced absenteeism, and higher job satisfaction.

2. Offering Flexible Work Arrangements

Overview: Allowing employees to work remotely, set flexible schedules, or adopt hybrid models can significantly reduce work-related stress.

Why It Matters: Flexibility helps employees maintain a healthier work-life balance, preventing burnout and enhancing engagement. It is also beneficial for employees with many mental health conditions like anxiety, BPD, OCD, and Asperger’s.

Key Steps:

  • Offer remote or hybrid work options when feasible. Consider sabbaticals as well.
  • Implement core working hours to provide structure while maintaining flexibility.
  • Monitor productivity outcomes and adjust policies accordingly.

Impact: Lower stress levels, improved retention rates, and increased overall performance.

3. Providing Access to Mental Health Resources

Overview: Employers should provide resources such as therapy sessions, wellness apps, or stress management workshops.

Why It Matters: Employees with easy access to mental health support can proactively manage challenges before they escalate.

Key Steps:

  • Offer subsidized therapy or coaching programs.
  • Provide subscriptions to wellness apps that support mindfulness and mental resilience.
  • Organize on-site or virtual mental health workshops and training sessions.

Impact: Increased employee well-being, enhanced workplace engagement, and better stress management.

By adopting these strategies, organizations can create a supportive environment that promotes employee well-being, leading to enhanced mental health and performance management and overall organizational success.

4. Provide Mental Health Training for Managers

Overview: Equipping managers with the skills to recognize and address mental health issues within their teams.​

Why It Matters: Managers play a crucial role in identifying signs of mental distress and supporting affected employees. Proper training ensures they can handle such situations effectively, fostering a supportive work environment.​ 

Meditopia for Work has specialized webinars and workshops on many mental health topics for the workplace. Send us a message to discuss your company’s needs.

Key Steps:

  • Offer Specialized Training Programs: Provide workshops or courses that teach managers how to identify mental health issues and approach conversations sensitively.​
  • Develop Clear Protocols: Establish guidelines for managers to follow when addressing mental health concerns, including referral processes to professional resources.​
  • Encourage Open Dialogue: Promote a culture where managers regularly check in with their team members and encourage discussions about well-being.​

Impact: Managers trained in mental health awareness can intervene early, providing support that may prevent issues from escalating. This proactive approach contributes to a healthier workplace and can improve overall team performance.

5. Foster a Positive Work Environment

Overview: Creating a workplace culture that promotes positivity, inclusivity, and support among employees.​

Why It Matters: A positive work environment enhances employee morale and psychological safety, reduces stress, and encourages collaboration, leading to improved mental health and productivity.​

Key Steps:

  • Implement recognition programs to celebrate employee accomplishments and contributions.​
  • Organize activities that strengthen relationships and promote teamwork.​
  • Ensure all employees feel valued and included, regardless of their background or role.​

Impact: A supportive and positive workplace culture leads to higher employee engagement, lower turnover rates, and enhanced overall productivity.

Companies Prioritizing Mental Health to Enhance Productivity

Now that you understand how does mental health affect work performance, it’s time to check some inspiring examples of other global companies prioritizing mental health. Here are some:

Cisco Systems

Overview: Cisco Systems, a global leader in networking technology, has been acknowledged for its robust commitment to employee well-being. The company has implemented various initiatives to support mental health and foster a supportive work environment.

Key Steps:

  • Offering EAPs, counseling services, and mental health days to support employees.
  • Providing remote work options and adjustable schedules.
  • Encouraging open discussions about mental health to reduce stigma.

Impact: Cisco’s focus on mental health has resulted in higher employee satisfaction and productivity, earning recognition in PEOPLE's “100 Companies That Care” list.

Medibank

Overview: Medibank, an Australian health insurance company, has introduced a four-day workweek to enhance employee well-being and productivity.

Key Steps:

  • Allowing employees to work fewer days while maintaining full pay.
  • Tracking engagement, job satisfaction, and mental health improvements.

Impact: Medibank observed increased employee engagement and job satisfaction, leading to an expansion of the trial program.

Salesforce

Overview: Salesforce integrates mental health support into its organizational culture to improve employee productivity.

Key Steps:

  • Providing designated time off for well-being.
  • Offering therapy, counseling, and mindfulness programs.
  • Enabling employees to balance work and personal commitments.

Impact: Salesforce’s commitment to mental health has led to lower turnover rates, higher satisfaction, and increased workplace productivity.

Accenture

Overview: Accenture, a global professional services company, has implemented comprehensive programs to support employee well-being.​

Key Steps:

  • Accenture offers wellness programs that include mental health training and preventive health checks. 

Impact: By prioritizing employee health and wellness, Accenture aims to enhance workplace culture, boost productivity, and reduce absenteeism and attrition.

Microsoft

Overview: Microsoft has implemented a "mental health first" approach to support employee well-being and drive innovation.

Key Steps:

  • The company has integrated mental health resources into its culture, providing access to mental health professionals, promoting flexible work schedules, and encouraging a healthy work-life balance.

Impact: Microsoft's focus on mental health has resulted in a 28% increase in team creativity and a 35% improvement in problem-solving capabilities.

Synchrony Financial

Overview: Synchrony Financial offers unique employee benefits to address mental health challenges exacerbated by the pandemic.

Key Steps:

  • The company provides free on-site therapy sessions, allowing employees to access mental health support conveniently. 

Impact: This initiative has been well-received, distinguishing Synchrony as a proactive employer in mental health support and aligning with their existing wellness programs and resources. 

These examples demonstrate that by investing in mental health initiatives, companies can create a more engaged, productive, and loyal workforce, ultimately benefiting both employees and the organization's bottom line.

Case Studies: Mental Health and Work Performance

Before ending this blog, we are going to show you a real example of mental health and work performance.

Meditopia partnered with Logo, a pioneering software company to enhance employee emotional resilience, focus, and productivity. The goal was to integrate mindfulness-based mental health support into the workplace to boost employee motivation, efficiency, and retention rates. 

logo achievements with meditopia for work to enhance employee performance

Key Steps

To support Logo’s mission of enhancing workplace mental health, Meditopia introduced the following interventions:

  1. Personalized Mindfulness Programs: Full premium access to Meditopia’s platform, offering over 1,000 guided meditations, sleep stories, relaxation exercises, and daily motivational content in 12 different languages. This ensured accessibility and personalization, allowing employees to choose what best suited their mental health needs.
  2. Integrated Meditation Breaks for Increased Productivity:
    Employees were encouraged to take short mindfulness breaks throughout their workday. Research-backed mindfulness practices were introduced to help improve focus, emotional regulation, and cognitive performance, ultimately fostering better decision-making.
  3. Emotional Well-Being Campaigns & Resources:
    To ensure continued engagement, Meditopia and Logo collaborated on:
    • Monthly mental health support kits
    • Seasonal well-being newsletters
    • Employee engagement materials
    • Wellness tips & emotional resilience content‍
  4. ‍Impact
  • Employees reported feeling more motivated, energized, and engaged in their tasks. Short meditation breaks contributed to higher concentration levels, allowing them to complete tasks more efficiently.
  • Logo employees stated that meditation helped them recharge mentally, making them more effective in their work. 
  • Internal evaluations confirmed that productivity levels increased, reinforcing the value of integrating mindfulness into the workplace.
  • Employees who regularly engaged with Meditopia’s sleep stories and relaxation techniques noted a significant improvement in sleep quality.
  • The membership activation rate increased from 100 to 250+ employees, demonstrating strong participation and trust in the initiative.