Cost of Poor Mental Health at Work

Mental health is no longer just a personal matter—it’s a bottom-line issue. For organizations, the cost of poor mental health at work shows up in lost productivity, absenteeism, presenteeism, and higher turnover. The World Health Organization estimates that depression and anxiety alone cost the global economy **over $1 trillion each year** in lost productivity.

For HR leaders and executives, understanding these costs is the first step toward building a strong business case for employee wellbeing programs.

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## 1. Lost Productivity and Presenteeism
Presenteeism—the phenomenon of employees showing up but performing below capacity—is one of the largest hidden costs of poor mental health. Research suggests it can be **three times more costly than absenteeism**, as stressed or burned-out employees underperform while still on the job.

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## 2. Rising Absenteeism and Sick Leave
Poor workplace mental health leads directly to more frequent sick leave. This doesn’t only drive healthcare costs; it also strains teams, disrupts projects, and erodes morale when workloads shift unevenly.

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## 3. Increased Employee Turnover
Employees experiencing chronic stress and burnout are more likely to leave. Replacing an employee can cost up to **two times their annual salary** when considering recruiting, onboarding, and lost institutional knowledge. Burnout-driven turnover compounds this cost across organizations.

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## 4. Impact on Culture and Engagement
The cost of poor mental health at work isn’t purely financial. A workforce struggling with stress and burnout is less engaged, less innovative, and less connected to company culture. The ripple effect damages collaboration and reduces long-term growth potential.

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## 5. Healthcare and Insurance Costs
Mental health challenges increase the use of healthcare benefits, driving up premiums and organizational expenses. Preventative investment in mental health reduces these costs by addressing issues before they escalate.

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## Building the Business Case
The ROI of mental health programs is clear: healthier employees drive stronger business outcomes. By quantifying the **cost of poor mental health at work**, HR leaders can build a compelling business case for employee wellbeing initiatives that executives understand in financial terms.

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## Why October Health
October Health provides a data-driven framework for calculating and improving the ROI of workplace mental health. Our tools help HR leaders identify the cost drivers, model ROI scenarios, and demonstrate the financial impact of proactive mental health investment.

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### Key Takeaway
The cost of poor mental health at work is significant—but it’s also preventable. With the right programs and tools, organizations can transform employee wellbeing into a measurable business advantage.

👉 **Ready to prove the ROI of mental health programs? [Get a demo of the October Health solution](/demo).**