Workplaces face escalating mental health claims without action

Workers compensation claims for mental health are set to double by 2030, according to a new report by the Committee for Economic Development of Australia (CEDA).

The report, Mental health and the workplace: How can employers improve productivity through wellbeing? finds the costs of mental health related compensation claims are also blowing out.

If recent trends continue, costs could triple in real terms by 2030.

“Australian businesses have been very successful in prioritising physical safety in the workplace over recent decades, however psychological safety has not been given the same priority,” says CEDA Senior Economist Cassandra Winzar. 

“For that reason, serious workers compensation claims for physical injury in Australia have fallen over the last two decades.

“In contrast, claims for mental health conditions have increased. 

“With even moderate growth assumptions, projected mental health related claims are set to double by 2030.

“And taking into account the impacts of COVID-19 stress, job instability and working-from-home trends these claim numbers may escalate further.”

However, CEDA’s new report shows these outcomes are not inevitable.

“Employers can act now to reduce the impact of work on employee mental health,” says Ms Winzar.

“This does not mean simply offering free yoga classes, fruit boxes or mental health awareness morning teas – these initiatives make no discernible impact on staff mental health.

“What does make a difference is ensuring jobs are well designed, that managers are trained to address mental health issues, and that organisations adopt firm-wide mental health strategies.

“Investing in the mental health of employees is a sound business decision. 

“Increased employee wellbeing will increase participation, employee engagement and ultimately productivity.”

CEDA’s report advocates that businesses must adopt widespread measures that are proven to improve mental health outcomes including:

• Employees having more control over their job design – including access to support, feedback and learning opportunities
• Training for managers to help identify mental health problems, respond to staff who need support and understand how to adjust working conditions when needed
• Developing, formalising and promoting organisation-wide mental health strategies