Getting evidence on good mental health ROI
While support for employee mental health and wellbeing generally has become the norm, there’s still a lack of hard evidence of ROI – limiting investment and making the HR approach look woolly. We’ve reached the stage where depression and anxiety is talked about, out in the open rather than dealt with behind closed doors, and people are more able to be people, not forced to adopt a rigid employee persona.
According to the Government’s Thriving at Work report, the cost of poor mental health among employees is costing employers between £33 and £42 billion. UK employers bear much of the burden of the costs of ill-health in general, chronic disease and incapacity, and HR need to have a better grasp of which particular interventions help them mitigate against these costs. In other words, talking about new attitudes to mental health, providing yoga sessions and free fruit, may feel the right thing to do, but there need to be hard numbers on Return on Investment.
There’s been some research on the ROI of some workplace health interventions over the last 30 years. But much of it originates in the USA where employers bear significant healthcare costs and have a direct financial interest in improving workforce health and promoting early intervention. The more reliable research includes a study by the large US insurance firm insurance firm LifeSolutions which found a return of between $5.17 and $6.47 (in terms of increased work productivity) for each dollar spent on the EAP. An academic study involving work with the Australian Fire Service found that mental health training for managers led to real impact on work-related absence and an ROI of £9.98 for each pound spent; while the Government’s Thriving at Work highlighted a significant return for employers investing in mental health interventions: an average of £4.20 for every £1 (with a range up to £9).
And while EAPs are the most commonly used workforce health intervention in the UK with close to half of the workforce (a total of almost 14 million) having access, very few providers or employers are able to collect systematic evaluation data beyond ‘take-up’ or utilisation statistics and satisfaction surveys. To help bridge this gap, EAPA launched the EAP calculator in October last year. Independently developed by the Institute of Employment Studies (IES), this new tool can be used by HR professionals to estimate the value of their EAP investment. Since the launch, there are now 529 users with the average return on investment calculated at £10.44 per £1 investment.
The more the calculator is used, the richer the dataset becomes. In turn this data can be used to revise and update the methodology, building the rigour and realism of the figures put forward to senior executives in boardrooms. There’s then a clear basis for investment in more specific mental health initiatives for employees. And over time, as the UK dataset grows and the anonymous data is collated and analysed, there is the detail needed for organisations and HR teams to benchmark returns and value against comparative employers in their sector and region.
The web tool available here and is available to everyone. We encourage EAPA members to try the EAP calculator and share with their clients to help build the data available. The full calculator has more detail, variables and greater intricacy and can handle employers with over 15,000 employees. Plans are underway to make the full calculator available in the coming months and we will keep members updated as this progresses.