Mental health – Whether driven by swelling societal pressures, stretched resources, or simply our growing willingness to talk about it, it is now a regular feature on the national agenda. And rightfully so.
According to the Australian Bureau of Statistics, one in five Australians aged 16 to 85 suffer from a mental health disorder; and that’s only the reported cases we know about. Mission Australia research shows that mental health is now the number one concern for young people in Australia.
Unsurprisingly, the economic impact is just as far reaching. A 2016 report reveals the total cost to our economy is $60 billion per year – or around 4 per cent of GDP. For business alone, the cost of lost wages, decreased productivity and support services related to mental health amounts to $13 billion annually.
And whilst the ramifications of this issue are clear, the countless reviews, inquiries, and emergent reforms surrounding mental health in Australia have shown us that the solutions aren’t so easily achieved. It was this lack of solutions that led the Shared Value Project – in partnership with IAG, NAB, AIA, SuperFriend and PwC to conduct research to explore the business imperative to address the mental health crisis in Australia.
The insights of the research have been collated into a report, to be launched this Friday, ahead of 2019 World Mental Health Day. The report will consider the opportunity for business to contribute to improving mental health, profitably; and for the financial services sector in particular.
A spotlight on financial services
Research has shown that of all sectors, banks and insurers are among those most affected by poor mental health.
This extends from – and to – all their stakeholders; namely their customers, employees and the broader communities in which they operate. When considered further, it is easy to see why.
The financial services industry reports some of the highest rates of mental illness, with a prevalence of approximately 33 per cent (compared to 45 per cent of Australian workers overall). The leading causes are stress and anxiety; with frontline workers often vulnerable to customer aggression, or second-hand trauma when they are exposed to the impact of the financial hardship of clients.
Despite all this, 11 per cent of those working in financial services have experienced stigma due to mental health issues in their workplace, and less than one in 10 believe their workplace culture encourages open discussion around mental wellbeing. Business is notably impacted by this through increased absences, staff inefficiency and rising compensation claims.
The social problems commonly linked with mental illness include poverty, unemployment or reduced productivity, and homelessness – all of which affect or are determined by our financial situation. In other words, financial health and mental health are inextricably linked.
Global research shows that people with mental health problems are more susceptible to problem debt. In fact, one in four (24 per cent) of those with depression or anxiety are in debt respectively, compared to fewer than one in 10 (8 per cent) of those without mental health challenges. Meanwhile, a 2013 AIA report reveals that mental health is one of the three leading causes of income protection claims in Australia, with group insurers paying out more than $160 million each year in mental health-related income protection (IP) and total permanent disablement (TPD) claims.
This imposes a significant financial risk to business, through unmet credit obligations and rising insurance claims and can extend to family members and carers of those with mental illness.
Perhaps the impact on communities is best explained in this quote from Martin Wolfe in 2014: “Mental ill health is the developed world’s most pressing problem. Given the economic costs to society, including those caused by unemployment, disability, poor performance at work and imprisonment, the costs of treatment would pay for themselves.”
Wolfe recognises the direct and indirect socio-economic impacts of mental illness more broadly – from the pressure it puts on our health system and social services (at $9.1 billion in 2016-17), to reduced economic participation and a declining social environment. The prosperity of the financial sector, and indeed all business, is unavoidably constrained by threats to the world in which it operates. This is why it makes sense for companies to play a role in mental health prevention and early intervention.
Realising the business opportunity
There is a clear opportunity for financial service providers to make a meaningful contribution to improving mental health while gaining a competitive advantage. And, as the numbers imply, the risk in not doing so is too large to ignore.
Shared value provides the means to reduce this risk, by transforming companies’ business models to address the pressing issue of mental illness in a way that benefits the bottom line. It pushes beyond compliance and reactive treatment mechanisms – like Employee Assistance Programs and Workplace Health and Safety initiatives – to proactively combat the problem directly, effectively future-proofing business against the impact of mental illness on their profitability long-term (respectfully).
Short-term, the positive returns to business sit on a spectrum between cost reduction and profit growth; by increasing staff productivity and work attendance, by better equipping customers to meet their credit obligations and retain employment, and by creating more resilient and fertile ecosystems to do business with. Undoubtedly, an effort to elevate mental health would assist in regaining customers’ trust too.
With the Royal Commission into Victoria’s Mental Health System – described by commissioners as a “broken system” – nearing its promised interim report deadline of late November, it is now more timely than ever to consider the evolving role of business in solving such pervasive issues, and how this could improve mental health in Australia. This shared value approach is already working within the financial services sector, as can be seen in examples like NAB Assist, the AIA Vitality program and IAG’s Safer Communities framework.
The Creating Shared Value: The Business Imperative to Improve Mental Health in Australia report will dive deeper into these case study examples, offering an insight into how business can create measurable social and economic benefit by tackling mental illness. We look forward to its launch, and encourage the wider business community to consider the enormous pay-off in accepting this important challenge.