8 benefits of a mentally healthy workplace


As a leader or senior manager, you are almost guaranteed to work closely with an employee or co-worker experiencing a mental health issue during the course of your career. According to the Australian Bureau of Statistics, 21% of Australians aged 16–85 had a psychological condition in a 12-month period. And 44% ever had one.

For your colleague, their emotional distress could be pre-existing but exacerbated by toxic work practices, cultures, and environments. Or the overwhelm could actually be directly caused by work instead. Either way, investing in mentally healthy team workspaces is essential for the long-term success of your organisation and employees. Here we look at eight reasons why.

1. Alleviation of mental health symptoms and stress, and suicide reduction

Naturally, one of the best and most ethical benefits of creating psychologically safe workplace environments is the fostering of employee mental well-being and health. This in itself should be reason enough. Nine out of 10 Australian employees believe that mentally healthy workplaces are important.

The Australian Institute of Health and Welfare (AIHW) writes that a variety of life stressors, such as work pressures, contribute towards suicidal ideation. Their data illustrates that suicide and self-inflicted injuries are the third leading cause of years of life lost (YLL).

The AIHW also reminds us that suicide risk factors can be either non-modifiable or modifiable. Organisational structures, values, and practices are modifiable; they can be changed to promote employee well-being and reduce suicidal ideation and behaviours.

2. Greater team trust, loyalty, and openness

According to the Harvard Business Review, 88% of employees with invisible disabilities choose not to disclose them at work for fear of repercussions. Should they be open about their conditions and risk indifference, gossip, and denigration? Or should they stay silent and instead battle with exclusion and harassment, along with increasing degrees of distress?

The good news is that it’s possible to cultivate team environments where each member can openly talk about their stressors and conditions without fear of discrimination or exclusion.

Your proactive efforts will increase individual and team trust, performance, and productivity across the organisation. You'll also inspire loyalty – and a positive company reputation, as discussed later.

3. Increased opportunities for employee growth, purpose, and development

With that employee trust and loyalty comes greater opportunities for their personal fulfilment. Although it is not the case for everyone, many individuals derive substantial purpose and life satisfaction from their employment.

The entire field of occupational therapy is based on the understanding that meaningful activities and pursuits help people recover – from a range of illnesses, conditions, and injuries. It seems logical that psychologically safe workplaces assist in alleviating mental ill-health.

In addition, people devote significant time to cultivating a career: studying, training, learning, improving, and advancing. It's understandable that role loss (due to mental ill-health), unsupportive workplace cultures, and ongoing employment-related stressors can negatively impact a person’s identity and sense of purpose. Who wants to work in an environment where they feel devalued?

Mentally healthy workplaces encourage employee development and growth, and their self-actualisation.

4. Reduced absenteeism and sick leave

Taking employee mental well-being seriously is not just the ethical choice but also makes good business sense. A Beyond Blue and PwC report reveals that ineffectively addressed, or unaddressed, employee mental ill-health causes losses of around AUD$11 billion per annum in Australia.

The figure is broken down like this:

  • Workers’ compensation claims: $146 million
  • Absenteeism: $4.7 billion
  • "Presenteeism" (turning up to work sick and underperforming): $6.1 billion.

On a worldwide scale, the WHO estimates that about 12 billion work days are taken off annually due to anxiety and depression alone. That costs the global economy around USD$1 trillion each year.

For the pragmatically minded, it just makes good financial sense to take seriously workplace mental well-being and psychological safety.

5. Decreased staff turnover and recruitment costs

Your organisation invests considerable time, capital, and energy into identifying the very best candidate for your role. Out of the hundred or more applications you received, and based on the numerous interviews (and rounds of interviews!) your company conducted, you chose this individual as they deserved the role. You selected them for their exemplary qualifications, skills, experience, drive, and passion.

It would be a great loss to your organisation to no longer have these outstanding qualities.

What about associated recruitment costs? The Society for Human Resource Management in the US lists the average cost-per-hire as roughly USD$5,000 (AUD$7,500) – derived from benchmarking report data. That average jumps to USD$28,300 (AUD$42,500) for executive cost-per-hire.

If we combine the annual costs of mental health–related absenteeism, presenteeism, and injury claims with turnover and recruitment costs, what does the total look like? The Black Dog Institute's guess is AUD$39 billion per year.

The bright side is that every USD$1 funding mentally healthy workplaces reaps USD$4 in returns.

6. Retention of skills, knowledge, and experience

As just outlined, a candidate is chosen for their exemplary qualities – ones it is wiser to retain than to lose. Employees also gain enormous degrees of implicit and explicit knowledge during their time at a company. With the loss of the employee comes the loss of their accumulated wisdom, skills, and know-how.

And this invaluable loss is tragically compounded if the employee were temporarily experiencing a mental health–related issue that, with the right workplace team culture and genuine support, could have been alleviated and resolved, or avoided altogether.

This is yet another reason why continuous devotion to workplace mental health is a win-win for employers and employees.

7. Better company reputation

Say a former employer is fired or has their career stalled or ended due to their mental health. It is highly likely that word of this will spread in one way or another. It would be more beneficial for an organisation to be known as one that sincerely cares for its employees, their lives, and their well-being.

It would be less favourable to have a reputation as an employer that allows bullying, harassment, overwork, and exploitation to fester unchecked. Every company definitely would rather avoid those negative Glassdoor reviews from disgruntled former employees!

However, with a good reputation, an organisation will enjoy external validation as an employer of choice, thus attracting new talent and clients, and greater investment.

8. Compliance with legal and WHS requirements

"Employers have a legal obligation to ensure the [psychological] health and safety of workers."


Work health and safety laws require an employer to prevent, eliminate, or minimise risks to workers’ health. “Health” includes psychological/emotional health, of course! Safe Work Australia delineates the following as some of the numerous psychosocial workplace hazards:

  • Long working hours
  • Micromanagement
  • Poor support (including emotional and practical support) from colleagues
  • Poor organisational justice
  • Lack of job control
  • Bullying, harassment, etc.
  • High workloads
  • And too many others.

Safe Work Australia also writes that employees typically take more time off for psychological injuries than physical ones. Also, remember that approximately AUD$146 million per year goes to workers’ psychosocial compensation claims, as per the Beyond Blue and PwC report. In fact, psychological injury claims are usually pricier than physical injury ones.

So, compliance with WHS/OHS legislation is yet another motivator to invest in mentally safe and healthy work team environments.

For those interested: on April 1, 2023, the Australian government introduced updated WHS laws, with amended regulations available here. Additionally, codes of practice for managing psychosocial hazards at work are available from Safe Work Australia.

The eight reasons above demonstrate why proactively investing in mentally healthy workplaces is a wise choice!