Employee mental health is deteriorating and some businesses are struggling to respond

Many small businesses are falling short on mental health supports, report says

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Before the pandemic, it was easier for Erin Bury to identify employees who were working too much or going through a challenging period in their personal lives.

At the Toronto office of Willful, the 20-employee online wills startup Bury co-founded with her husband, she had face-time with employees and was able to “take the pulse on their personal life.” She could also catch if someone was regularly staying late and encourage them to go home and take time for themselves.

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In 2022, after two years of successful remote work, Willful went virtual for good. “Now the only indication you have if someone is approaching burnout or spending too much time working every week is if they put their hand up and tell you,” Bury said. “We have to be more intentional about checking in on people.”

Employee stress and burnout were already growing business concerns before the pandemic. One conservative estimate pegs the economic toll of poor mental health at $50 billion each year in health-care costs, lost productivity and reduced quality of life. Waves of lockdowns, isolation and illness during the pandemic only compounded those challenges and increased demand for supports, driving what experts have called an echo pandemic.

Canadian insurance companies paid $650 million for mental health claims in 2022, a 10 per cent increase from 2021 and almost double what they covered in 2019, according to recent data from the Canadian Life and Health Insurance Association. It noted that 90 per cent of insurers’ health coverage, under which mental health supports fall, is in group plans for employees or members of unions or associations.

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Both Manulife Financial Corp. and Sun Life Financial Inc. report mental heath diagnoses as the No. 1 cause of long-term disability claims in Canada, and said they make up roughly one-third of total disability claims. Indeed, mental health has been the top claims driver for a decade, but that trend accelerated during the pandemic, according to a December report from Sun Life.

The last few years “pretty dramatically impacted” employers’ approaches to supporting employees, said Katharine Coons, national senior manager of workplace mental health at the Canadian Mental Health Association. “At a lot of organizations it used to be a nice-to-have to support employee mental health and think about ways to create psychologically healthy and safe workplaces,” she said. After the pandemic, mental health supports have become a “base level requirement, especially for employees when they’re looking for jobs.”

But some employers are falling short on meeting those expectations. A report from the Ontario Chamber of Commerce (OCC) says that many small businesses are struggling to support employees’ deteriorating mental health. The report, released Oct. 17, found that while a majority of small businesses recognize the importance of staff mental health, and though more than half of surveyed small- and mid-sized enterprise (SME) employers were aware workers are struggling, only one-third have a formal mental health strategy in place.

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Simranzeet Singh Vig, senior policy analyst at the OCC and the report’s author, said one thing the chamber heard consistently from members is that many don’t know what resources are available — something it tried to address in the report by compiling tools and free resources.

SMEs are more likely to have less capacity and fewer resources, he said. Some smaller organizations also lack a dedicated human resources person to advance open discussions about workplace mental health and dedicated supports.

Small businesses themselves have unique stressors, the report noted, including the dynamic nature of work in which roles often shift, larger responsibilities for owners and outsized financial impacts from the pandemic many companies are still struggling to recover from.

“The fact of the matter is SMEs are placed on the front lines of the crisis and … they don’t feel prepared to address mental health issues in the workplace,” Singh Vig said.

Smaller teams can also mean employees are shouldering much larger workloads with less slack built in for vacations or if someone calls in sick, said Rona Birenbaum, founder of Caring for Clients, a Toronto-based financial planning and wealth management firm with 12 employees.

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Birenbaum has tried to counter this at her own company by having multiple staff members assigned to each of her clients so someone else can step in for a busy colleague if necessary. She also has weekly one-on-one meetings with each of her employees to check in on their workloads and find out how they’re doing personally. She also stresses to employees that they aren’t expected to — and shouldn’t have to — work overtime.

“If someone is not able to get their work done within a traditional workday, then we need to figure out why, because that’s not sustainable over any length of time,” she said.

Coons said that even with fewer resources there’s plenty SMEs can do to support employee well-being, including expanding paid sick days to include mental health concerns, directing leaders to share openly about their own struggles and providing training to managers who are often the first line of defence” when it comes to workers’ mental health. Employers can also use the Mental Health Commission of Canada’s National Standard for Psychological Healthy and Safe Workplaces as a reference guide to improve factors such as workload management, growth and development opportunities, work-life balance and employee recognition.

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Employers that don’t make an effort to address staff well-being risk recruitment and retention challenges, as well as higher costs from absenteeism and disability leaves, Coons said.

Erin Bury, co-founder of Willful, an online wills startup.
Erin Bury, co-founder of Willful, an online wills startup. Photo by Willful

At Willful, both the pandemic and the new remote reality influenced the company’s approach to employee mental health, Bury said. Beside providing benefits coverage for mental health practitioners and an annual $500 stipend for well-being expenses, Willful has also prioritized flexible working policies.

With employees spread across five time zones, the company set its core “on hours” between 12 p.m. to 4 p.m. eastern time for meetings, company events and mental wellness educational sessions. Employees can set their own schedules outside of those hours, but Bury said Willful has a rule that people respect colleagues’ off hours and use the email scheduling feature rather than send messages at a time the recipient isn’t working.

“There are people, and I used to be one of those people … who will feel obligated to respond to that even if we say till we’re blue in the face that you’re not obligated to respond outside of work hours,” she said.

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Employees also have weekly one-on-one check-ins with their managers, and the company provides 10 personal or sick days for employees to use, no questions asked.

Small employers may have fewer resources than larger companies, but Bury said they also have a secret weapon.

“(We have the) ability to get to know employees intimately and provide leniency and accommodations. It doesn’t cost any money just to say, ‘Hey, how are you feeling this week and what can we do to respond?’” she said. “We can be very human and have conversations that are a bit more candid, and respond quickly to what people need.”

But addressing employee mental health shouldn’t be left entirely to employers, the OCC report argues, given its major impact on society, the economy and a health-care system already stretched to the brink. OCC said Ontario’s provincially funded mental health care has been chronically underfunded for decades and is plagued by long wait times.

The report made several recommendations for the Ontario government, including advancing its work on a portable benefits program that includes strong mental health coverage and introducing a tax credit to encourage small businesses to invest in employee well-being, similar to one that exists in the United States. It also said the government should factor mental health and addictions into all policy, from labour and workforce development to housing and immigration.

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“Mental health is a crosscutting issue that impacts individuals on a personal level but those impacts spill over to communities and business… The province is in a space where it’s talking about (rebuilding) the economy coming out of the pandemic, and it’s so essential to keep mental health and addictions at the front and centre,” Singh Vig said. “This is the only way to have a holistic, well-rounded recovery.”

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