Is there room for happiness, well-being and fulfilment in the workplace? Most people would believe so. And surely if you have greater job satisfaction, you are happier, which increases productivity and potentially leads to career progression. However, in the difficult economic environment of the past years, a knock-on effect of the recession has been the reduction in workforce and increasing pressures on staff to keep output high. Inevitably, this pressure has created stressful working environments across businesses and even in boardrooms. In 2011, we saw almost £1 billion being wiped off the market value of Lloyds Banking Group after its CEO went on sick leave having been diagnosed with extreme fatigue and stress due to overwork, according to media reports.
Mental health conditions have emerged as the most single widespread cause of long-term absence from the workforce, according to the 2013 CBI/Pfizer Absence and Workplace Health Survey. But the report also found that the average absence rate was 5.3 days in 2012, down from 6.5 days in 2010, with the reduction saving UK businesses £3 billion. Perhaps this is an indication that employers are getting better at tackling the root causes of the problem. However, how many employees would be willing to tell their boss about how their stress, anxiety and depression struggles, for fear of discrimination or even dismissal? This leads to questions on whether accurate data is recorded on such conditions by employers in the first place and whether companies are taking positive steps to manage mental health issues related to work and non-work related stress, anxiety and depression.
Little appears to have been done to beat the stigma attached to depression. For instance, after the co-pilot of the Germanwings crashed the plane into the French Alps there was a perception that there could be a link between depression and violence. Sometimes it may also be suggested that burned out employees facing pressures and bullying at work should simply become better at managing their workload and improve how they cope with anxiety and stress. Mental health problems have an implication for business which is why workload pressures, shift work, difficult relationships at work and additional responsibilities should be actively addressed by employers.
For years, businesses have tried to mitigate health and safety risks by focusing on minimising safety hazards which could be a danger to the well-being of their workers. While this is a must to reduce the threat to employees’ health and safety, management of the psychological hazards workers face needs to be developed further. Mental health problems in the workforce can have adverse consequences for companies, such as increased turnover. One simple but important step for employers is to recognise the impact stress, anxiety and depression can have on the physical and emotional health of their employees. Much more needs to be done to overhaul how companies respond to stress, as empathy and understanding is not necessarily a given. Equally, workers need to be able to seek help if they struggle. After all, if the company has a supportive, open and safe culture in place, they should be able to tell their employer if they suffer from stress, anxiety and depression.
Implication for investors
The implication for responsible investors is to continue or even begin to ask the management of investee companies questions about whether they consider mental health a risk to the business. Employee welfare is crucial to the success of most businesses and the employee suicides reported at companies such as Taiwan’s Hon Hai Precision Industry and France’s Orange highlight that corporate culture and resulting mental health strains can have implications for the business in terms of reputation and human capital. Hermes EOS will therefore continue to engage with companies to address the underlying issues.
Shortening executive contracts is short-sighted