Asia-Pacific

Out of the shadows:
Sustainably improving
workplace mental health
The COVID-19 pandemic has exacerbated preexisting workplacemental health challenges, creating a new imperative for leaders to takea holistic and methodical approach to workplace mental health.
by Alistair Carmichael, Fiona Lander, and Richard Steele© skaman306/Getty Images

April 2021

Poor mental health can have a major impact on
individuals, employers, and societies, and the
pandemic has brought additional challenges. Manycompanies, however, think that taking action
on workplace mental health means setting up acollection of programmes owned by human resources(HR). In our experience, this approach and mindset
are not sufficient to generate the real, sustainablechange that is necessary now more than ever.
Instead, workplace mental health best practices
should be integrated into all elements of acompany’s operating model, including its
organisational culture. Doing so means bringing
together workplace mental health research, deeporganisational design and change expertise, anda value-first perspective. Taking such action cansignificantly bolster employee mental health andjob satisfaction and has been shown to be good forbusiness: international research estimates a returnof 4.25x ROI for every dollar spent.1
Leaders need to think about mental health outcomes
across a variety of domains: designing workplaces
to minimise harm, building both organisational
and individual resilience, facilitating early helpseeking, and supporting recovery and return to work.
Through our experience working with leaders acrossgeographies and sectors, we have identified fivecore principles that can help leaders to create—andsustain—a more mentally healthy workplace.

Mental health conditions
profoundly affect individuals,
employers, and society
Diagnosable mental health conditions are common.
In Australia, for example, 20 percent of people

1

aged 16 to 85 experience a mental health conditionin any given year.2
For individuals, common mental health conditions
can have a major impact on work performanceand career trajectories. Individuals experiencing
mental ill-health miss an average of ten to 12
workdays per year and suffer 14 to 18 days of
reduced productivity.3 Where help is sought—oroffered—early, recovery is possible and negative
effects can be minimised. Sadly, delays in seeking
help and inadequate provision of care are common.
In Australia, it is estimated that 54 percent ofpeople with a diagnosable mental health condition
do not receive treatment.4
For employers, the cost and impact are significant.
The Australian Productivity Commission estimatesthat mental health conditions cost Australian
workplaces AU $17 billion (US $13.6 billion) every
year through absenteeism and lost productivity.5
Costs related to other factors, such as healthcare
and insurance costs, are not included in this figure.
For society, the impact of poor mental health is also
a significant and growing challenge. The AustralianInstitute of Health and Welfare estimated thatmental and substance-abuse disorders accounted
for 12.1 percent of Australia’s total burden of diseasein 2015.6 Depression—which is only one of thecommon mental health conditions—is already theleading cause of disability worldwide,7 and by 2030,
it is forecast to be the leading cause of disease
burden globally (exhibit).8
Preexisting issues have been exacerbated by the
COVID-19 pandemic, with psychological effects
forecast to outstrip physical effects in Australia.9

Paul Farmer and Dennis Stevenson, Thriving at work: The Stevenson/Farmer review of mental health and employers, UK Department for Workand Pensions and Department of Health and Social Care, October 2017, gov.uk.
2
National Survey of Mental Health and Wellbeing: Summary of Results, Australian Bureau of Statistics, October 2008, abs.gov.au.
3
National Health Survey: First Results, Australian Bureau of Statistics, December 2018, abs.gov.au.
4Australia’s health 2014, Australian Institute of Health and Welfare, June 2014, aihw.gov.au.
5
Productivity Commission inquiry report: Mental health volume 2, Australian Government Productivity Commission, June 2020, pc.gov.au.
6
Australian burden of disease study: Impact and causes of illness and death in Australia 2015, Australian Institute of Health and Welfare,June 2019, aihw.gov.au.
7
Depression and other common mental disorders: Global health estimates, World Health Organization, 2017, who.int.
8
The global burden of disease: 2004 update, World Health Organization, 2008, who.int.
9Catherine Bock, Lisette Kaleveld, and Rebekah Maycock-Sayce, “COVID-19 and mental health: CSI response,” Centre for Social Impact,
October 2020, csi.edu.au; Tony Bartone, Ian Hickie, and Patrick McGorry, “Joint statement: COVID-19 impact likely to lead to increased rates ofsuicide and mental illness,” Australian Medical Association, May 2020, ama.com.au; COVID-19 significant societal and mental health impacts
highlights urgent need for innovation in treatments, Mind Medicine Australia, September 2020, mindmedicineaustralia.org.au.

2

Out of the shadows: Sustainably improving workplace mental healthExhibit

Understandingis keykey toto overcoming
overcoming workplace
workplace
Understanding thethe human
human element
element ismental-healthhurdles.
mental-health hurdles.
Face of mental health20

20% of Australians
aged 16–85 experiencea mental-healthcondition in any
given year.

12

AU $17 billion is lost byAustralian workplaces every
year due to absenteeism andlost productivity from mentalhealth conditions.

12%+ of Australia’s
total burden of diseasein 2015 was frommental and substanceabuse disorders.

By 2030, depression
is forecast to be
the leading causeof disease burden
globally.

10–12 workdays are missed
per year per employee inAustralia experiencing amental-health condition.

14–18 additional daysof reduced productivity
are suffered by individuals
in Australia experiencing
mental-health disorders.

~4x ROI for every
dollar spent
on workplacemental health.

54

54% of Australians withdiagnosable mentalhealth conditions
do not receive adequate
treatment.

This trend is both a demand and a supply issue;
many existing mental health stressors—including
social isolation, job and financial loss, and housing
insecurity—have worsened, and lockdowns havemade it more difficult to access mental healthservices. As a result, there has been a deterioration
across a number of key mental health outcomes.

The domains that matter for workplacemental health
Against this backdrop, there is a new urgency forleaders to act in support of workplace mental health.
Activity to protect against poor mental healthoutcomes can be clustered into domains10:— designing workplaces to minimise harm

— building organisational resilience— building individual resilience— facilitating early help-seeking— supporting recovery and return to work
Designing workplaces to minimise harmThis domain involves addressing core risk factors,
such as high levels of role stress or a lack of support
or flexibility. Positive action can take many forms.
In the case of a lack of support, for example, peer
support schemes and buddies can improve theexperience of new hires. Meanwhile, encouraging
informal social groupings, such as interestbased work collaboration channels, can foster anorganisation-wide sense of connection.

10

Katherine Petrie et al., “A framework to create more mentally healthy workplaces: A viewpoint,” Australian and New Zealand Journal of
Psychiatry, January 2018, Volume 52, Number 1, pp. 15–23, pubmed.ncbi.nlm.nih.gov.

Out of the shadows: Sustainably improving workplace mental health3Many mental health risk factors are well known,
but the majority of workplaces still fall short inproactive monitoring and awareness and in taking
consistent action.
These are examples of what organisations did during
the pandemic:— Community building. One organisation’s“neighborhood groups” brought together
people across roles and levels, helping build
organisational cohesion. Many of the groups
continued after mandatory or recommended
catch-ups or activities had ceased.
— Enhanced flexibility. Ensuring flexible work
hours for parents took many forms, such asoffering additional paid and unpaid time off,
reduced hours, or changed work patterns. Some
organisations also offered activities for children,
such as online activities during evenings or
school holidays.
— Workload monitoring and dynamic rebalancing.
For some organisations, this was informal or lowtech, such as greater use of team stand-ups withwork for the day adjusted to suit capacity. Other
organisations used system monitoring to spot
spikes in activity and adjust accordingly.
Building organisational resilience
Organisational resilience comes in many forms.
Programmes focused on psychological safety
and broad-based mental health awareness have
proved to be effective, especially when paired withleader training.11
Here are examples of what organisations did during
the pandemic:— Mental health promotion. Leaders publicly
shared their commitment to supportingand improving mental health, often throughstorytelling. Effective examples used a rangeof communication channels, with storytelling

11

paired with tips, details of available resources,
and activities. Some adopted a storytellingand check-in cascade, in which leaders sharedstories with their direct team members and so on
throughout the organisation.
— Supported boundary setting. One organisationagreed to a meeting-free lunch break, during
which no internal or external meetings were to
be booked. Automated nudges were given to
employees who booked or accepted meetings
during the hour.
— Leader capability. Many organisations provided
access to additional mental health training forleaders, with some even making it mandatory
across their entire organisation.
Building individual resilience
We have observed employers provide a range
of interventions, including stress-management
programmes built around cognitive behaviouraltherapy (CBT). Using a range of approaches,
CBT aims to change an individual’s specificmisconceptions and maladaptive assumptions and toteach new skills for handling stressful situations.
Examples of what organisations did during the
pandemic include the following:— Resilience training. Some companies
distributed workbooks containing a seriesof resilience challenges. Although the vast
majority of the challenges were meant to becompleted on an individual basis, such as
identifying three things that had gone well thatday, employees were encouraged to form pods
to share their experiences.
— Mindfulness programmes. One organisation
started an opt-in programme for employees toregularly share their experiences and participatein evidence-based positive psychology activities.
Others offered free or subsidised mindfulness
and meditation apps.

Samuel B. Harvey et al., Developing a mentally healthy workplace: A review of the literature, National Mental Health Commission,
November 2014, headsup.org.au.

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Out of the shadows: Sustainably improving workplace mental health— Physical activity. A number of organisations
used virtual physical challenges for individuals
and groups, such as opt-in daily step challenges,
with stories and photos shared weekly.
Facilitating early help-seeking
Early help-seeking is more likely in organisations
that have a strong awareness of the signs of mental
ill-health, appropriate services available, and aculture that encourages asking for help.
During the pandemic, some organisations provided
the following:— Tailored mental health awareness. One
organisation created a multichannel
communications series focused on theexperiences of working parents, including
detailing typical challenges to increaseawareness, as well as providing advice anddetails on support resources.
— Mental health-focused events. A number oforganisations planned town halls to share stories,
build awareness, and reduce stigma. This often
included storytelling from the CEO or seniorleaders, which helped foster an environment inwhich employees could show vulnerability.
— Expanded employee assistance programmes(EAPs). Some organisations with preexisting
programmes expanded access to include thefamily members of employees—or even smallbusiness suppliers or customers.
Supporting recovery and return to work
Historically, many organisations expected
employees with mental health issues to make afull recovery before returning to work. We now
know that this approach is often misguided, andthat returning to work is an important part of therecovery process.12 Changes to the workplace or job
design may, however, be necessary. These changes
can often be gradually modified and reduced as theemployee recovers.

12

In many organisations, individuals who have sought
adjustment or taken leave are treated as the
responsibility of the HR team. The level of contact
and support from leaders during an absence
is inconsistent, with some leaders expressing
discomfort and a lack of confidence in their ability tosupport employees on their return. Improved leader
training can significantly improve return outcomes.
Recovery and return to work have been especiallydifficult during the pandemic, and leadingorganisations have developed additional tools andservices to assist their people:— Direct access to psychological support. One
organisation provided preferential, subsidised
access to psychologists for its top 300 leaders.
— Increased leave. A number of employers haveoffered five days of additional “pandemic leave”
on a no-questions-asked basis.

Five principles to sustainably improve
workplace mental health
The development of a comprehensive programmeof mental health interventions across anorganisation’s entire operating model and cultural
system can sustainably address the issues acrossthese domains. Listening to leaders from acrossgeographies, industries, and the public, private,
and social sectors—and leveraging the most
up-to-date research—we have identified five core
principles that can help leaders to build and sustain
this comprehensive programme to sustainably
improve workplace mental health.
Understand how core risks play out inyour workplace
To take effective action to sustainably improve
workplace mental health, an organisation can startby understanding the factors that have been shownto contribute to the risk of diagnosable mental
health conditions. Risk factors include a low level of
support provided in completing work, an imbalance“Supporting the return to work of employees with depression or anxiety,” Beyond Blue, deakin.edu.au; “Help others stay at work,” Heads
Up, headsup.org.au; Position statement: Realising the health benefits of work, The Australasian Faculty of Occupational and Environmental
Medicine, October 2011, racp.edu.au; Lieke Kools and Pierre Koning, Graded return-to-work as a stepping stone to full work resumption,
Institute of Labor Economics, April 2018, iza.org.

Out of the shadows: Sustainably improving workplace mental health5

To help keep change on track, it isbest to integrate the mental health work
into broader organisational change,
maintain a strong organisational
imperative, and ensure broad-based
and visible leadership support.
between effort and reward, and a low level ofautonomy in the use of skills and expertise.
A mixture of quantitative and qualitative researchis required to deeply understand how these andother relevant factors show up in your workplaceand how they vary by layer, role, and location. As
you investigate, also seek to understand current
and prior attempts at change and what got in theway. Understanding these factors informs yourimprovement aspirations.
Be integrated and holistic in your actions
Whether you choose to take action as part of a
focused workplace mental health effort or part ofa broader organisational change, it is critical to beholistic and consider the entire operating model andcultural system:— People. What level of understanding andawareness of mental health challenges andworkplace mental health do you need fromyour leaders?
— Process. How do you need to change theway work gets done, either on a macro orteam level? How do your core people-related
processes—such as remuneration andperformance review—support workplacemental health?

6

Out of the shadows: Sustainably improving workplace mental health— Structure. Does your structure give people theability to get the support they need and use
their skills and expertise? Could it bemore dynamic?
— Culture. Are you reinforcing a purpose and aset of values and behaviours that support
mental health?
Understanding and addressing the whole operating
model and cultural system help you craft an
integrated programme of work that can sustainably
shift the organisation.
From our experience in driving cultural andoperating model change, it is not just what ischanged that matters; who is driving the change
is also critical. Change is best led and supported
from the top and not treated as “just another HR
programme” or as something that is being “done tothe people.” HR leaders are often the first to makethis point based on their careers of working to
make change happen and seeing important change
efforts sidelined.
To help keep change on track, it is best to integrate
the mental health work into broader organisationalchange, maintain a strong organisational
imperative, and ensure broad-based and visible
leadership support.

Use data to personalise interventions
One size does not fit all when it comes to improving
workplace mental health. Individuals experienceeach workplace differently and bring different
elements of themselves and their personal life
into the mix. If you reflect on your employees
during the pandemic, a parent with school-aged
children at home would have a very different
experience from a young person living alone. Bothhave faced challenges, including to their mental
health, but their stressors and needs are different.
Demographic and other data can help you to
identify different cohorts or personas that informthe suite of interventions necessary to build a morementally healthy workplace, as well as identify thebest way of tracking improvements.
It is also important, however, not to fall into the trapof thinking your people are one-dimensional andcan be perfectly segmented. Driving sustainableculture change requires a multilayered approach.
Communicating a mental health message once,
using one channel, is rarely effective. A better
approach is to ensure that the message is being
broadcast from the top, from local leaders, and frompeers—both formally and informally—and throughdifferent channels. The aim is to give the recipient a
broad range of opportunities to receive, understand,and connect with the message.
Co-design solutions with your people
Involve a broad array of your people inunderstanding the root cause of your current
challenges and in co-designing solutions.

Your people are your secret weapon in driving
sustainable change. If given the right opportunityand support, they will help you to understandwhat is really going on—especially deep in theorganisation or far from HQ—as well as provide
a range of fresh ideas. By taking an inclusive
approach to designing your change, you boost
the odds of your people owning and driving
improvement, which is key for sustainable change.
Solve with your community
Many organisations strive to keep the work andthe home separate when it comes to mental
health, drawing a distinction between what they
influence at work and what employees bring withthem. Through the pandemic, the line between
home and work became more blurred. As aleader, you must maximise the engagement andperformance of your employees, and that means
seeing the whole person. If you look beyond yourworkplace and engage with your communities,
you can build an even stronger and more mentally
healthy workplace.

With challenges continuing through the pandemic,
sustainably improving workplace mental health has
never been more important. The good news is thatrecent research shows how and where action canbe taken. Leaders can take this knowledge and act
now to shine a light on the critical topic of workplacemental health and to help their people thrive outsideof the shadows.

Alistair Carmichael is an associate partner in McKinsey’s Sydney office, Fiona Lander is a consultant in the Perth office,and Richard Steele is a partner in the New York office.
The authors wish to thank Prasun Agrawal, Priyanjali Arora, Ben Fletcher, Margot Franklin-Hensler, Zaana Howard,
Cameron Leitch, and Sam Pickover for their contributions to this article. This work is based on our own research and draws
on a partnership with Black Dog Institute, assessing core risk factors toward mental ill-health in the workplace. The authors
are particularly grateful for the valuable input from Sam Harvey, Leona Tan, and Jon Tennant of the Black Dog Institute.
Designed by McKinsey Global Publishing
Copyright © 2021 McKinsey & Company. All rights reserved.

Out of the shadows: Sustainably improving workplace mental health7