Employee mental health crisis sees record numbers out of work

Record levels of UK employees are inactive because of long-term sickness absence, according to figures released today by the Office for National Statistics (ONS).

The number of people on long-term sick leave has risen by 27,000 since June 2023; an increase of 491,000 since the start of the COVID-19 pandemic.

The increase is likely due to poor levels of mental health and wellbeing amongst employees. Earlier this year, the Business Group on Health’s 2024 survey found that 77% of large employers are reporting an increase in employee mental health needs.

Speaking to Startups, Nick Pahl, CEO of the Society of Occupational Medicine (SOM), warns that companies have a role to play in addressing the crisis.

“The size of this figure and its expected continued increase remains an immediate concern. It will require significant investment in Occupational Health from both the government and the private sector,” he confirms.

Poor mental health driving economic inactivity

September’s figures represent the second consecutive record increase in long-term sickness rates since July. At the time, government analysis found that 53% of workers had depression, bad nerves or anxiety.

Combined, these symptoms signal a mental health crisis that has been plaguing workplaces in light of current economic issues.

Real wages have fallen dramatically due to inflation, while household outgoings, like energy bills, continue to surge. Gallup’s recent employee survey shows the impact this is having on the UK workforce, finding that 19% of professionals report feeling angry at work.

Most impacted has been Gen Z. Research by Reward Gateway shows that almost half of 18-24 year olds are entering the workplace with a higher baseline level of stress than their older colleagues.

This could be part of the reason that younger workers are being mis-read as difficult to work with. Labelled the ‘anti-ambition generation’, the apparent apathy of Gen Zers towards work as reported by managers could instead be a reflection of heightened stress levels.

Financial stress fans flames of staff burnout

Another trigger for employee burnout is reduced pay power. Despite more of us seeking out meaningful work, where job satisfaction trumps take home pay, financial pressures are still causing stress for employees.

Kerri-Ann Hargreaves is Director of HR and recruitment at Newcastle-under-Lyme-based Net-Worth Ntwrk. Hargreaves says: “Many job seekers continue to say their reason for moving is the cost of living crisis and are focusing on salary increases, bonuses and additional benefits such as healthcare.”

Employers are responding. The ONS data also found that growth in regular pay (excluding bonuses) was 7.8% in May to July 2023. This is the same as the previous 3-month period and is the highest regular annual growth rate since comparable records began in 2001.

Nonetheless, in an inflationary environment, there is a ceiling on how much businesses can increase their employees’ pay. This is particularly true for SMEs, who tend to have smaller cash reserves than large businesses.

Reduced competition in the jobs market combined with the rise in long-term sick absences could cause problems for scale-ups to carry out their hiring plans in the near future.

Hargreaves reports seeing larger businesses offering an increase as part of annual pay reviews due to the rising cost of living, “generally between 7%-10%, but small businesses are struggling with this demand and losing talent.”

Benefits “cheaper than a disengaged workforce”

One way that employers can better support their employees is by investing in a package of targeted staff benefits to zero in on the issues plaguing different generations.

Such ‘nice-to-haves’ might be viewed as risky, or even unnecessary, by some SME owners. But with a 2022 Deloitte report estimating that mental ill health costs businesses £56bn annually, a disengaged workforce is likely to prove more threatening to cash flow.

Workers who feel unmotivated and stressed will not be as productive, threatening output and efficiency when businesses are already struggling to survive the quarter.

Various anti-work trends, such as quiet quitting, have cropped up this year as employees describe ignoring or avoiding work to cope with enhanced stress. Their proponents are a flight risk, contributing to high staff turnover if their concerns are left unaddressed.

Greg Marsh, CEO of Nous.co, a tool for managing household bills. Marsh says: “Offering strong workplace benefits that help employees with the things that really matter to them can help solve this problem.

“Well-targeted perks are tax efficient and can save an employee far more money than it would cost the business in pay awards, making them an extremely cost-effective way of attracting and retaining talent.”

Employment perks to combat burnout

With NHS waiting times at record high, employees are turning to their employer to provide mental health services.

Employee Assistance Programmes (EAPs) are becoming more common as bosses try to help workers combat depressive symptoms such as lethargy, low concentration, and poor sleep habits.

However, investment in long-term therapy is not the only option for managers. Perks to battle burnout can be light touch. Some firms choose to offer more than the 20-minute statutory rest break, to help improve mood, and reduce the risk of fatigue at the end of the day.

Others choose to join the many UK companies adopting a four-day week this year, to help improve work-life balance by giving employees a three-day weekend.

For those who do need time off work, long-term sick policies should also be designed. These should include information on return-to-work meetings, managerial check-ins, and flexible working options for employees with debilitating illnesses or conditions.

Read about 50+ benefits and perks you could introduce this year to improve staff wellbeing in our full guide.