February 21, 2025 • 10 mins
What are the financial repercussions of neglecting mental health in the workplace? In this episode we dive into eye-opening data of how much your bottom line is being affected by how you are treating your employees. Let's shatter the myth that employee welfare is just a "people thing", not a "business thing", and prepare to rethink your approach to employee investment.
Are you tracking the unseen costs of lost productivity, morale and staff turnover?
If you want to ensure you are enhancing employee retention by taking action on employee mental health, you should join us for this one!
To have your questions answered on the show, submit your story here: https://allthrive.ca/share-your-story
Leadership Ripples with Leah Fink is live every week at 12:00pm MST. Please join us to get answers to your leadership questions! https://www.linkedin.com/in/leah-fink-all-thrive/
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Every action you take as a leader has a ripple effect
, starting with your team, goingout to the organization and
even out into people's personallives.
Here we offer you the chance tolearn from real-life stories of
leadership so you can gain adeeper understanding and level
up your own skills Fromcommunication to culture, to
power and equity, to feedback,to resolving conflict and more.
(00:23):
Join us and make sure you'recreating the ripples you want.
Welcome to Leadership Rippleswith Leah Fink.
Speaker 2 (00:31):
Hello and welcome to Leadership Ripples with Leah
Fink.
Today, we are going to betalking about the cost of
staffing, and this is based on acomment that was made to me by
a leader when I was explainingthe work I do.
He mentioned that when we talkabout employee well-being, it's
not a business thing, it's apeople thing, and this is from
(00:52):
someone who cares and works alot on employee welfare and
well-being and advocates forinvesting in employees, and this
isn't the first time I've heardsimilar statements, so I wanted
to address this concept.
When we look at business versusemployees in the business and
what that means for thefinancial side of this, all I
(01:13):
understand where people arecoming from when they think like
this.
When we talk about businessthings, we're often talking
about things that make us profit.
We're talking about how much wecan make.
And then, when we talking abouthow much we can make and then
when we think about our expenses, we have this assumption that
there's something we're justgoing to have to deal with.
It takes money to make moneyand, of course, there are a lot
(01:33):
of expenses that we can't domuch to change.
We're going to have to takethem on.
That's a reality, but there isone expense that is so
changeable and might still havethis sense, though, but I want
to say that it is changeable.
We're going to talk about thattoday because this is all about
employees, their well-being andinvesting in a culture that does
(01:55):
that.
I generally work with leaderswho prioritize their staff.
That's why they come to workwith me, and that is fantastic.
I also recognize that, with thesheer amount of things that
leaders have to do to make acompany profitable and
successful, it can feel likethere's so many other priorities
all the time and a lot ofleaders feel like they can't
(02:16):
commit the time to focus, toreally dive into this piece of
staff experience.
They get focused on thosebusiness things, right, those
tactical components maybelooking at growth, looking at
sales, looking at marketing, andof course they're looking at
staffing of.
Of course they're looking atstaffing, of course they care
about their staff, but maybethey just believe that staff
turnover is a reality ofbusiness, maybe they feel
(02:38):
powerless to support staffmental health, maybe they're
worried about spending too muchon staffing and staff
development, and then they won'thave the money they need for
critical things like marketing.
So if you are that kind ofleader that's focused on
strategies and tactics and wantto make sure you are making the
best decisions financially togrow your organization.
(02:58):
This is the episode for you.
I'm going to share facts andstats about how you might be
bleeding out money that youdon't have to.
So we're going to start withsome numbers from the Canadian
Psychological Association andSTEM Capital, and we're going to
start by talking about mentalwell-being for employees that
you are keeping in your officeor in your workplace.
Around 70% of Canadians reportthat their work experience
(03:23):
impacts their mental health.
Speaker 1 (03:24):
That's already a large number to start off with.
Speaker 2 (03:27):
At least 500,000 Canadians miss work due to
mental illness every week, withan estimated cost of $51 billion
annually.
It's estimated by 2041, thecumulative cost of mental
illness in Canada will be $2.5trillion.
30% of disability claims inCanada are due to mental illness
(03:48):
, accounting for 70% of alldisability costs are due to
mental illness, accounting for70% of all disability costs.
And the cost of disabilityleave for mental illness is
about double the cost of leavedue to physical illness.
Some pretty big numbers whenyou're keeping employees in the
office.
And what is this all associatedwith?
So poor employee mental healthoften comes with these
behavioral changes that resultin even worse outcomes for your
(04:09):
workplace as well.
So you have increasedabsenteeism and long-term
disability.
You have increased presenteeism, which is trying to show up to
work despite impairedfunctioning due to that medical
or physical illness.
You have increased intentionsto quit the job, the
organization.
You have reduced productivityand job performance, reduced job
satisfaction and commitment tothe organization, more risk of
(04:32):
unsafe work behaviors.
This could be things likemedication errors among
healthcare professionals,greater interpersonal conflict
with other employees, co-workersand greater risk of physical
illness.
None of that sounds good, doesit?
And those are just the costsfor employees that stay with the
company.
So what happens when some ofthose 70% of employees that say
(04:54):
their workplace impacts theirmental health believe that your
workplace negatively impactstheir mental health?
They have a poor experience andthey leave the company.
What happens then?
Let's go to the next big expenseand look at some turnover stats
from psychometricscom.
Statistics indicate that thedirect cost of replacing an
employee depends on theirposition.
(05:14):
For example, a low estimate ofreplacing a mid-level employee
can cost 20% of their annualsalary.
So, for example, if you have a$60,000 a year manager, that can
cost about $12,000 to replacethem.
That's when you're accountingfor all the HR, all of the time
it takes to train a new person,their productivity from that
position not being filled.
All of the time it takes totrain a new person, their
productivity from that positionnot being filled, all of those
(05:35):
pieces.
Meanwhile, replacing ahigh-level employee with large
salary and specialized trainingcan cost up to 213% of their
salary.
So if you have, maybe, aC-suite executive or a
higher-level manager $100,000 ayear, you're now looking at
$213,000 of cost for that oneemployee.
And of course, like we've said,the indirect costs of staff
(05:58):
turnover are also included inthis too.
They're not even included inthose numbers, but we want to
talk about them.
So you've got lost productivity, lost engagement.
The employees that are stayingare going to start questioning
why turnover is so high.
They might start disengaging aswell.
You're going to lose knowledgethat comes from people being in
organization for a while.
You're going to have reducedmorale from people leaving.
(06:22):
There's going to be more gossipand it's hard to really track
the monetary impact of thosepieces.
But they also play into thosepoor experiences in the
workplace that I mentionedbefore.
When you keep your employees,and so when you look at this
piece of staff turnover, youthink, well, okay, how much do I
actually have turnover?
What are the numbers?
So let's add one last stat fromjobvitecom, and that is
voluntary attrition ranges from12% to a whopping 60%.
(06:48):
In a year, 12 to 60% ofemployees choose to leave their
jobs, and I know there's somedifferentiating in that due to
industry.
There's obviously going to besome roles that maybe have
higher turnover, but there'salso a lot about the culture of
your organization that's goingto bring you closer to that 12%
or closer to that 60%, andyou're going to be hit doubly If
(07:10):
you have a poor culture.
If you're not prioritizing thispiece of staffing, you will be
experiencing all of these pooroutcomes in the workplace and
paying out money for those whoare on leave and paying out
money to keep replacing youremployees, so you are going to
be hemorrhaging quite a bit.
This all being said, I knowthat's a lot of numbers and
there might still be facts andthoughts in your head about how
(07:32):
unfixable some of these problemsare.
First of all, you can't pleaseeveryone.
You may be unsure about whatactual challenges you can take
on and face them, how you'regoing to take action to fix them
.
Workplace when we use thatlanguage, people don't feel
qualified to say I'm going tostop mental illness in my
(07:53):
workplace.
That doesn't feel like the roleof a manager, and so we have to
start looking at mental healthin the workplace, how to procure
a healthier place, because thatis when we can create
actionable steps for change.
And so that's what I do.
For example, I use mentalhealth assessments to see what's
happening in the workplace andthen we create a plan that is
actionable steps to make ahealthier workplace.
So you're getting away from alot of the problems that I just
(08:15):
mentioned, and if it's not me,there's other consultants doing
similar work.
They're looking at cultureassessment, they're looking at
these other metrics and can alsohelp with that.
There are people that can helpwith this.
This is all changeable.
Repeat this is all changeable,but it takes commitment.
It takes time and money toinvest in that kind of change.
(08:37):
So if you're currently lookingat your staff metrics and
they're maybe a bit lower thanwhat you want, you get to decide
how you want to invest yourmoney and time.
You can do that by continuingto pay out for absenteeism,
disability, staff turnover, lowproductivity, decreased quality
performance, maybe even worse,customer service, or you can
(08:57):
take the step to look at what'sreally happening in your company
, what's really impactingemployee mental health, and then
invest in taking meaningfulsteps to change it.
That's entirely your choice,where you want your money and
time going.
As a reminder to all ourlisteners, if you have a great
question that you want to sharewith the show or a story, we
(09:18):
would love to hear it.
You can find the link for thatin the description below and we
hope to hear from you.
We would love to interact withyou and, if you have been
enjoying this show, if you're aregular listener.
Thank you first of all, so muchand, if you wouldn't mind
taking just a moment and leave aquick rating or review, it
really helps us out, so thankyou for that.
I want to thank you so much forlistening, for learning with me
(09:41):
, for considering these reallyhard pieces about money.
Balance your time and energy,balance your own confidence and
commitment to this kind of work.
So thank you so much forjoining us and remember to ask
yourself what kind of ripples amI going to create this week?
Speaker 1 (09:59):
We hope you enjoyed the episode.
Make sure to subscribe, commentand connect with Leah at
meetleahca.
Every action you take as a leader has a ripple effect
, starting with your team, goingout to the organization and
even out into people's personallives.
Here we offer you the chance tolearn from real-life stories of
leadership so you can gain adeeper understanding and level
up your own skills Fromcommunication to culture, to
power and equity, to feedback,to resolving conflict and more.
(00:23):
Join us and make sure you'recreating the ripples you want.
Welcome to Leadership Rippleswith Leah Fink.
Speaker 2 (00:31):
Hello and welcome to Leadership Ripples with Leah
Fink.
Today, we are going to betalking about the cost of
staffing, and this is based on acomment that was made to me by
a leader when I was explainingthe work I do.
He mentioned that when we talkabout employee well-being, it's
not a business thing, it's apeople thing, and this is from
(00:52):
someone who cares and works alot on employee welfare and
well-being and advocates forinvesting in employees, and this
isn't the first time I've heardsimilar statements, so I wanted
to address this concept.
When we look at business versusemployees in the business and
what that means for thefinancial side of this, all I
(01:13):
understand where people arecoming from when they think like
this.
When we talk about businessthings, we're often talking
about things that make us profit.
We're talking about how much wecan make.
And then, when we talking abouthow much we can make and then
when we think about our expenses, we have this assumption that
there's something we're justgoing to have to deal with.
It takes money to make moneyand, of course, there are a lot
(01:33):
of expenses that we can't domuch to change.
We're going to have to takethem on.
That's a reality, but there isone expense that is so
changeable and might still havethis sense, though, but I want
to say that it is changeable.
We're going to talk about thattoday because this is all about
employees, their well-being andinvesting in a culture that does
(01:55):
that.
I generally work with leaderswho prioritize their staff.
That's why they come to workwith me, and that is fantastic.
I also recognize that, with thesheer amount of things that
leaders have to do to make acompany profitable and
successful, it can feel likethere's so many other priorities
all the time and a lot ofleaders feel like they can't
(02:16):
commit the time to focus, toreally dive into this piece of
staff experience.
They get focused on thosebusiness things, right, those
tactical components maybelooking at growth, looking at
sales, looking at marketing, andof course they're looking at
staffing of.
Of course they're looking atstaffing, of course they care
about their staff, but maybethey just believe that staff
turnover is a reality ofbusiness, maybe they feel
(02:38):
powerless to support staffmental health, maybe they're
worried about spending too muchon staffing and staff
development, and then they won'thave the money they need for
critical things like marketing.
So if you are that kind ofleader that's focused on
strategies and tactics and wantto make sure you are making the
best decisions financially togrow your organization.
(02:58):
This is the episode for you.
I'm going to share facts andstats about how you might be
bleeding out money that youdon't have to.
So we're going to start withsome numbers from the Canadian
Psychological Association andSTEM Capital, and we're going to
start by talking about mentalwell-being for employees that
you are keeping in your officeor in your workplace.
Around 70% of Canadians reportthat their work experience
(03:23):
impacts their mental health.
Speaker 1 (03:24):
That's already a large number to start off with.
Speaker 2 (03:27):
At least 500,000 Canadians miss work due to
mental illness every week, withan estimated cost of $51 billion
annually.
It's estimated by 2041, thecumulative cost of mental
illness in Canada will be $2.5trillion.
30% of disability claims inCanada are due to mental illness
(03:48):
, accounting for 70% of alldisability costs are due to
mental illness, accounting for70% of all disability costs.
And the cost of disabilityleave for mental illness is
about double the cost of leavedue to physical illness.
Some pretty big numbers whenyou're keeping employees in the
office.
And what is this all associatedwith?
So poor employee mental healthoften comes with these
behavioral changes that resultin even worse outcomes for your
(04:09):
workplace as well.
So you have increasedabsenteeism and long-term
disability.
You have increased presenteeism, which is trying to show up to
work despite impairedfunctioning due to that medical
or physical illness.
You have increased intentionsto quit the job, the
organization.
You have reduced productivityand job performance, reduced job
satisfaction and commitment tothe organization, more risk of
(04:32):
unsafe work behaviors.
This could be things likemedication errors among
healthcare professionals,greater interpersonal conflict
with other employees, co-workersand greater risk of physical
illness.
None of that sounds good, doesit?
And those are just the costsfor employees that stay with the
company.
So what happens when some ofthose 70% of employees that say
(04:54):
their workplace impacts theirmental health believe that your
workplace negatively impactstheir mental health?
They have a poor experience andthey leave the company.
What happens then?
Let's go to the next big expenseand look at some turnover stats
from psychometricscom.
Statistics indicate that thedirect cost of replacing an
employee depends on theirposition.
(05:14):
For example, a low estimate ofreplacing a mid-level employee
can cost 20% of their annualsalary.
So, for example, if you have a$60,000 a year manager, that can
cost about $12,000 to replacethem.
That's when you're accountingfor all the HR, all of the time
it takes to train a new person,their productivity from that
position not being filled.
All of the time it takes totrain a new person, their
productivity from that positionnot being filled, all of those
(05:35):
pieces.
Meanwhile, replacing ahigh-level employee with large
salary and specialized trainingcan cost up to 213% of their
salary.
So if you have, maybe, aC-suite executive or a
higher-level manager $100,000 ayear, you're now looking at
$213,000 of cost for that oneemployee.
And of course, like we've said,the indirect costs of staff
(05:58):
turnover are also included inthis too.
They're not even included inthose numbers, but we want to
talk about them.
So you've got lost productivity, lost engagement.
The employees that are stayingare going to start questioning
why turnover is so high.
They might start disengaging aswell.
You're going to lose knowledgethat comes from people being in
organization for a while.
You're going to have reducedmorale from people leaving.
(06:22):
There's going to be more gossipand it's hard to really track
the monetary impact of thosepieces.
But they also play into thosepoor experiences in the
workplace that I mentionedbefore.
When you keep your employees,and so when you look at this
piece of staff turnover, youthink, well, okay, how much do I
actually have turnover?
What are the numbers?
So let's add one last stat fromjobvitecom, and that is
voluntary attrition ranges from12% to a whopping 60%.
(06:48):
In a year, 12 to 60% ofemployees choose to leave their
jobs, and I know there's somedifferentiating in that due to
industry.
There's obviously going to besome roles that maybe have
higher turnover, but there'salso a lot about the culture of
your organization that's goingto bring you closer to that 12%
or closer to that 60%, andyou're going to be hit doubly If
(07:10):
you have a poor culture.
If you're not prioritizing thispiece of staffing, you will be
experiencing all of these pooroutcomes in the workplace and
paying out money for those whoare on leave and paying out
money to keep replacing youremployees, so you are going to
be hemorrhaging quite a bit.
This all being said, I knowthat's a lot of numbers and
there might still be facts andthoughts in your head about how
(07:32):
unfixable some of these problemsare.
First of all, you can't pleaseeveryone.
You may be unsure about whatactual challenges you can take
on and face them, how you'regoing to take action to fix them
.
Workplace when we use thatlanguage, people don't feel
qualified to say I'm going tostop mental illness in my
(07:53):
workplace.
That doesn't feel like the roleof a manager, and so we have to
start looking at mental healthin the workplace, how to procure
a healthier place, because thatis when we can create
actionable steps for change.
And so that's what I do.
For example, I use mentalhealth assessments to see what's
happening in the workplace andthen we create a plan that is
actionable steps to make ahealthier workplace.
So you're getting away from alot of the problems that I just
(08:15):
mentioned, and if it's not me,there's other consultants doing
similar work.
They're looking at cultureassessment, they're looking at
these other metrics and can alsohelp with that.
There are people that can helpwith this.
This is all changeable.
Repeat this is all changeable,but it takes commitment.
It takes time and money toinvest in that kind of change.
(08:37):
So if you're currently lookingat your staff metrics and
they're maybe a bit lower thanwhat you want, you get to decide
how you want to invest yourmoney and time.
You can do that by continuingto pay out for absenteeism,
disability, staff turnover, lowproductivity, decreased quality
performance, maybe even worse,customer service, or you can
(08:57):
take the step to look at what'sreally happening in your company
, what's really impactingemployee mental health, and then
invest in taking meaningfulsteps to change it.
That's entirely your choice,where you want your money and
time going.
As a reminder to all ourlisteners, if you have a great
question that you want to sharewith the show or a story, we
(09:18):
would love to hear it.
You can find the link for thatin the description below and we
hope to hear from you.
We would love to interact withyou and, if you have been
enjoying this show, if you're aregular listener.
Thank you first of all, so muchand, if you wouldn't mind
taking just a moment and leave aquick rating or review, it
really helps us out, so thankyou for that.
I want to thank you so much forlistening, for learning with me
(09:41):
, for considering these reallyhard pieces about money.
Balance your time and energy,balance your own confidence and
commitment to this kind of work.
So thank you so much forjoining us and remember to ask
yourself what kind of ripples amI going to create this week?
Speaker 1 (09:59):
We hope you enjoyed the episode.
Make sure to subscribe, commentand connect with Leah at
meetleahca.
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