Manufacturing firms can’t afford to ignore employee mental health

Only 26% of manufacturing firms can measure the impact employee mental health has on costs such as disability & health care claims. We can do better.

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The biggest challenge of investing – whether it’s index funds, real estate, or baseball cards – is knowing whether what you buy will increase in value in the long run. After all, you need a genie or a time machine to predict the future. Last we checked, neither of those (sadly) are real.

Companies face the same struggle when it comes to employee mental health care. It’s hard for HR leaders to know what to invest in without evidence that a particular service will actually improve employee outcomes and reduce costs. Plus, in response to the pandemic the mental health space has exploded. While it’s great for companies to have options, it means HR teams need to scrutinize mental health partners closely, looking at clinical and economic outcomes, not just engagement metrics and fancy designs.

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Manufacturing firms can’t access the mental health metrics that matter

According to survey data from over 40 large manufacturing firms, 69% can’t access the mental health metrics that matter most to them. As a result, only 26% can measure the impact employee mental health has on costs such as disability claims, health care spending, and productivity. But even for the 26% that have access to this data, it’s incredibly challenging to aggregate, analyze, and glean insights from it.

Unfortunately, without this data, manufacturing firms may invest in ineffective mental health services – or in no services at all. And that can’t happen. Which is why we developed our latest report: The impact of good mental health: manufacturing. While the report can’t grant you the ability to see into the future (sadly, again), it will give you all the evidence you need to make the business case for investing in evidence based mental health care.

Why? It’s simple. It costs more not to.

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Employees with poor mental health cost you 2.6x more

One way we can quantify the impact of poor mental health in the workplace is looking at health care claims. In our report, we estimate the total annual health care spend for manufacturing workers without a mental health claim linked to insomnia or anxiety to be $5,000. For employees with such mental health claims, however, health care spend is 2.6 times higher – more than $13,100. For a manufacturing firm with 10,000 employees, that amounts to nearly $7,000,000 in additional health care spending per year.

But poor mental health can impact more than just health care costs.

• Accidents: Health care policy research has shown that 23% of the costs of workplace accidents are due to insomnia. In manufacturing, this can lead to damaged products as well as serious injuries.
• Productivity: In a survey of over 40 large manufacturing firms, 60% say decreased productivity is the biggest cost burden of poor mental health. Reduced productivity as a result of insomnia costs nearly $2,300 per employee annually, according to a study in the journal Sleep.
• Retention: The turnover rate for employees in the manufacturing sector is one-third higher than the national average, and government data shows far more job openings than roles filled. This is both an effect and cause of poor workplace mental health, as it adversely impacts morale and productivity for remaining employees.

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It begins with better mental health

There are clear, measurable costs for failing to support employee mental health. On top of that, there’s the immeasurable impact on lower employee morale.

So what can manufacturing firms do about it? There are two critical steps.

• Step 1: Work with mental health partners that provide evidence-based care and report on outcomes, not just engagement. Without this data, employers have no idea what services are actually having a positive impact on their employees’ mental health.
• Step 2: Break down the barriers to accessing that care: financial burdens, incompatibility with shift schedules, and the stigma associated with mental health.

To gain insights into how to take these steps, download our report. And remember, we can’t predict the future, but we can help you prepare for it by improving employee mental health and therefore reducing costs.