05 May 2016
The Real Cost of Ignoring Mental Health in the Workplace

The statistics are startling: about one-third of American workers suffer from chronic work stress; $27 billion worth of work days are lost to mental health-related absences each year. Professor John Quelch discusses his case on the state of mental health in the U.S. workplace, and why even though companies are better than ever about providing services to their workers, the stigma attached to mental health leaves a lot of work yet to be done.

BK: Today on Cold Call we'll here from Professor John Quelch about his case entitled “Mental Health in the American Workplace.” Professor Quelch holds a joint appointment at the Harvard Business School and the Harvard T.H. Chan School of Public Health.

The case we're discussing today was written for a course that's offered jointly to students from both schools—and we'll get more on that later. Professor Quelch, welcome.

JQ: Thank you, Brian.

BK: Why don't we start by having you set up the case for us?

JQ: Well, mental health is a very important problem in the United States and in all developed countries, in fact in all countries and all populations. There is a certain percentage of the population who are afflicted with fundamental disorders such as schizophrenia or bipolar disorder. On top of that, we believe that in many developed country environments, in particular, the level of workplace stress has contributed significantly to a greater level of lack of productivity and suffering in the workforce, and there are probably people who you work with every day who have stress and mental challenges but who are not necessarily revealing them to you and you don't necessarily know they have them. So, the biggest problem with mental health versus physical health conditions is the stigma that is still attached by many people to mental health that leaves it under the table and underreported.

BK: And the case really gets into that. This opens up with Alexander Carson. Tell me a little about—what are his issues?

JQ: Well, it's an individual who is working extremely hard and has a boss who happens to be very challenging in terms of expecting a 24/7 commitment to, for example, instant email responses at all times of day or night, and this desire that he has to prove himself in the position that he holds—which is a senior executive position—but at the same time, balance that against family obligations. This eventually catches up with him and he becomes afflicted and stressed.

BK: We should point out he's fictitious. But we can all relate to the predicament that he's in. Tell us a little bit about the scope of the mental health problem in the U.S. as you lay it out in the case. There's a lot of great data. The fact that 1 in 17 people suffer from a serious mental health disorder; 23.7 percent of those over 18 suffer from a serious medical disorder. Tell me a little bit about the context in the U.S. as you've laid it out.

JQ: To add a couple of additional statistics to the ones that you've just highlighted—approximately a third of American workers suffer from chronic work stress and only 36 percent of them say their employers deal with it adequately. On the one hand you have the problem but the problem is compounded by the fact that, in many cases, employees do not believe that their employers are really recognizing or helping them cope with the problem.

BK: And there are real dollars at stake here too.

JQ: There are enormous dollars at stake. There is one estimate, for example, that approximately $27 billion of work days are lost to mental health absence from the workforce each year, but above and beyond that—and much more significant, I think, from a cost point of view—is the cost associated with people showing up to work who are stressed and who are unable to perform at their proper capacity and the productivity drain that that has on the economy. I would add a third category of cost which is related to the stress of working people who are giving care at home to loved ones who are also mentally afflicted, maybe elderly parents with Alzheimer's or with dementia. Once you start doing the calculations on the productivity cost of all of these buckets of problems, it really adds up to an enormous figure. And yet, by way of contrast to that, only 8 percent of our national expenditures in the U.S. are on mental healthcare, and the level of research funding on mental health versus physical health issues is also disproportionately low relative to the importance of the issue.

BK: And there are issues with firms being reimbursed for providing care. You're talking in the case about the Diagnostic and Statistical Manual of Mental Disorders, the DSM for short. That sounds like that, in many ways, is the gateway to coverage for these disorders.

JQ: Yes, the DSM lists approximately 300 mental health disorders and having a disorder listed in the DSM is actually very important to reimbursement. So, for example, to take perhaps a sort of slightly obvious example one disorder that is listed now (it didn't used to be listed but is listed now) relates to people who simply collect and retain everything that they have ever possessed in their homes.

BK: They're hoarders.

JQ: They are hoarders with tremendous burdens related to the clutter in their own environments.

BK: And that book, the DSM, was originally introduced in 1952. The number of disorders has grown almost tenfold up to 2013.

JQ: Yes.

BK: That's remarkable.

JQ: Yes. I think there is some considerable speculation around the degree to which changes in lifestyles and changes in the environment and the content of our food supply have had effects that we haven't all been able to detect yet on our mental well-being over time, but when you think about it, if you compare what the typical American was doing 60 years ago in terms of how they would spend their day versus 2015, when the number of hours per day spent in front of screens is so much greater, it's hard to imagine that that has not had some effect on the way in which people are being socialized, the way in which they, therefore, behave as young adults and the problems that they may face when they become members of the workforce.

BK: And that gets to another important question that you addressed in the case: is work actually causing some of these mental health disorders?

JQ: You know, I think that people believe that there are two elements here. One is security associated with your job, and of course with globalization and outsourcing and the loss of so many middle-class manufacturing jobs that were viewed as lifetime career opportunities. Many people are under stress because they are not sure if the job they have today is going to be there tomorrow. Many other people, of course, are under stress because they don't have a job even if they want a job, or the job they have is not commensurate with the skill level that they have. So, apart from everyday work stress (ala all of the earlier example of Alex who is under pressure from his boss) there are these other workplace security issues that bear heavily on the amount of nervousness that people have at work. And, of course, when people are not sure about the employment status going forward, it does result in a somewhat challenging environment in the workplace and people begin not to necessarily cooperate as much as they should with other people and withhold information or start playing silly games and so forth that are unproductive to the organization. So, although lifetime employment is out of fashion, at the same time there is a lot to be said for it in terms of the stability and assurance that it gives and the loyalty and trust that it then breeds in the worker.

BK: In the United States we have the Americans with Disabilities Act, and in the case it almost sounded as though that act, in particular, was encouraging people to not disclose if they've got a mental health issue because of the stigma associated with that in the workplace. How do the legal actions play out here?

JQ: The stigma issue still looms extremely large, and especially with workplace and security for the reasons we've already discussed. If someone has a stress problem or a mental health problem or a personal family problem that's causing them stress, they are very reluctant to step forward. Even if the employer has an employee assistance program, an EAP, which is run by a third party with total assurance of anonymity and so forth, many employees still fear that accessing an EAP resource will red-flag them as someone who's got a problem and that that will be somehow or other noted if and when the company has to downsize, they may go to the top of the list. So, there is a lot of concern about these revelations. And of course, the privacy laws that have been developed to help consumers, to help workers protect themselves also, on occasion, get in the way of well-meaning efforts to actually provide that help.

BK: Let's talk a little bit about the obligation of a company or firm to help people who are suffering with mental health issues. What's the obligation of a firm to either help somebody who's experiencing those kinds of issues or to remove them from the workplace out of consideration for the other workers that are there?

JQ: I think, first of all, there's the issue of how important in the context of the values of the company and the culture of the corporation is the physical and mental well-being of the members of that community. Secondly, there is the issue of security and safety of customers and obviously there are many occupations where we entrust employees with responsibility (particularly transportation equipment)—where they do have the responsibility for carrying innocent passengers. For those types of employment situations, there's going to be a little bit more emphasis on not just random drug testing but random mental health testing as well, and you're going to see more of that coming into the workforce environment where safety and security of innocent individuals is at stake.

BK: Professor Quelch, thank you for joining us.

JQ: Okay, Brian. Thanks for the opportunity.

BK: The case, again, is called “Mental Health in the American Workplace” and you can find it in the case collection at www.hbr.org.

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