SUMMARY: Establishing baseline costs, and learning about legal trends and innovative leadership perspectives can help build your business case for addressing psychological health and safety in the workplace.

Measuring the costs of a psychologically unsafe workplace

Employees who experience high demand, low control, high effort and low reward are more likely to suffer adverse consequences of a psychologically unsafe workplace. The costs of these consequences can be staggering, both for individuals and the organization:

Potential health costs

3× Heart problems
3× Back pain
5× Certain types of cancer
2-3× Injuries of all types
2-3× Infections
2-3× Conflicts
2-3× Mental health problems
2-3× Substance use problems

Potential performance costs

  • Reduced adaptability
  • Reduced ability to cope with change
  • Impaired learning
  • Increased helplessness
  • Increased passivity OR aggression/conflict

Adapted with the permission of Dr. Martin Shain, principal of the Neighbour at Work Centre.

Establish baseline costs

A psychologically unsafe workplace is not only problematic for employees: it can also reduce an organization's performance.

Lost productivity accounts for about one-third of the annual $51 billion cost of mental illness in Canada (Dewa, C.S., Thompson, A.H. & Jacobs P., 2011). In a global knowledge-based economy, employers can't let an unhealthy workplace reduce an employee's potential to contribute their energy and ideas (Lowe. G, The Wellness Dividend, 2014).

  • Assess your existing expenses in terms of costs associated with not addressing psychological health and safety in the workplace. These expenses could include costs and time related to:
    • Stress-related illnesses
    • Absenteeism
    • Presenteeism
    • Turnover
    • Short- and long-term disability
    • Benefit utilization rates
    • Workers' compensation claims
    • Return-to-work and accommodation
    • Employee and family assistance plan use (EFAP)
    • Workplace grievances
    • Workplace conflict
    • Health and safety infractions
    • Human rights violations
    • Adverse events
  • Measure over regular time periods and use this information to identify trends and areas for improvement.

Consider legal trends

In his Tracking the Perfect Legal Storm report, Dr. Martin Shain suggests that providing a psychologically safe workplace is becoming a legal imperative. He highlights seven major trends in law that all point to the need for employers to provide a psychologically safe workplace.

  1. Human rights – Courts and tribunals across the country are increasingly adding scope and definition to an employer's obligation to reasonably accommodate mental illness in the workplace. Human rights agencies in some jurisdictions have gained increased powers to issue public interest remedies that may limit employers' rights.
  2. Law of torts – In some provinces it has been held that a reasonably prudent manager should be expected to understand the effect their behaviour has on those who report to them. Failure to do so can attract liability for infliction of mental suffering. Standards vary across the country. Most jurists recognize that reckless and intentional infliction of mental suffering are actionable wrongs but disagree on the extent to which negligence is included in this framework.
  3. Workers' compensation – In one province it has been held unconstitutional to administer and adjudicate claims for mental stress differently from those for physical injury. In another province, death benefits were awarded to the family of a heart attack victim resulting from mental stress to which managerial negligence contributed.
  4. Occupational health and safety (OHS) – There is an increasing recognition in at least two provinces that mental health and psychological safety are part of the responsibility to provide a safe system of work under OHS legislation. Assessing and addressing psychological risk is becoming part of the overall hazard identification and risk management process. Some provinces have added violence and harassment explicitly to their Acts.
  5. The employment contract – No longer is the employment contract simply an exchange of wages for services. It has now been deemed by some courts to include implied terms for psychological comfort, which go some way toward establishing the duty to provide a psychologically safe workplace within the context of the employment relationship.
  6. Employment standards legislation – The Employment Standards developed under the Accessibility for Ontarians with Disabilities Act (AODA) and the Quebec standards concerning psychological harassment, are contributing toward making freedom from harassing behaviour a normal part of the employment relationship.
  7. Labour law – Even when the wording is not implicitly included, collective agreements have been deemed in some jurisdictions to contain the terms of relevant occupational health and safety statutes, which in turn have been held to include terms for the protection of psychological safety.

Learn from other leaders

A Leadership Framework for Advancing Workplace Mental Health was developed by the Mental Health Commission of Canada and features videos of business, labour and government leaders. These leaders articulate the business case in terms of:

  • Risk management
  • Cost effectiveness
  • Social responsibility
  • Recruitment and retention
  • Organizational excellence

You may wish to use these videos in a presentation to your leaders when you are seeking to make the business case for a psychological health and safety management system.

Review statistics

Following are a few of the statistics and research related to psychological health and safety at work.

Employees express concern about psychological health and safety at work

  • A 2012 survey completed by Ipsos Reid, with more than 6,600 employees, indicates that 70% of Canadian employees report some degree of concern with psychological health and safety in their workplace (Ipsos Reid, 2012).
  • 14% of employees disagreed that their workplace was psychologically healthy and safe. 30% report levels of concern that warrant serious attention (Ipsos Reid, 2012).
  • Over 50% of employees reported experiencing frustration, exhaustion or irritation sometimes or often in the previous month. About a quarter reported experiencing anxiety, helplessness or depression (Ipsos Reid, 2012).  
  • Over 25% report feelings that no matter what they did, it would never be enough to please their manager/employer (Ipsos Reid, 2012).
  • 46% believe that economic uncertainty has had a negative impact on their workplace and 22% worried about losing their job (Ipsos Reid, 2012).
  • 60% of managers/supervisors say dealing with conflict is one of the most stressful parts of their job (Ipsos Reid, 2012).
  • Frequently cited factors deemed very or fairly stressful included frustration with poor management (54%), and not enough support from managers (47%) (Mind YouGov survey, 2014).
  • Employees with a previous disability claim related to mental illness are almost seven times more likely to have another disability claim related to that illness than someone with no previous disability episode related to mental illness (Dewa, Chau & Dermer, 2009). The authors of this study explored the relationship between effective accommodation policies, workplace social support and recurring disability.
  • One survey showed that 38.6% of respondents would not tell their current manager if they were experiencing a mental health problem (Dewa, C.S., 2014). Psychologically healthy and safe work environments can be protective even for those who are not seeking accommodation.

Advantages of promoting psychological health and safety in the workplace

  • Early, regular and sensitive contact with employees during sickness absences can be a key factor in enabling an early return to work (Black, 2008).
  • Numerous studies also show that employees are more creative and are able to achieve higher levels of job performance when they are in healthy psychosocial work environments. A meta-analysis of 57 studies in this area confirmed that the quality of an employee's relationship with their supervisor, a sense of psychological empowerment, and a supportive culture and leadership contribute to job performance (Lowe, 2014).
  • Job design, demands, rewards, workplace physical activity and work–life balance are proving to be particularly important in preventing mental health problems in the workplace and reducing disability claim costs (SALVEO Study on mental health in the workplace, 2014).
  • Employers who had previous experience of hiring people with a mental health problem were more willing to hire a person with mental illness (Brohan, E., Henderson, C.,Wheat, K., Malcolm, E., Clement, S., Barley, E.A., Slade, M.,Thornicroft, G., 2012).
  • Job strain may be positively associated with the utilization of health care services. This suggests that improving psychosocial working conditions and educating workers on stress-coping mechanisms could be beneficial for the physical and mental health of employees (Azagba, S., and Mesbah F. S., 2011).
  • By considering evidence on the workplace beliefs and behaviours of their employers, occupational health professionals can dispel myths and address concerns regarding hiring, managing and working with individuals with a mental health (Brohan, E., Henderson, C.,Wheat, K., Malcolm, E., Clement, S., Barley, E.A., Slade, M.,Thornicroft, G., 2012).

Importance of addressing concerns such as bullying in the workplace

Servant leadership is positively related to employees’ psychological health. Organizations that seek to improve the psychological health of employees should consider encouraging their leaders to lead on the basis of the principles of servant leadership (Rivkin, W., Diestel, S., and Schmidt, K.H., 2014).

Negative impact of discrimination

  • Nearly 40% of people affected by mental health conditions reported some form of discrimination or unfair treatment, while only 14.2% of those without mental health problems reported this experience (Data was obtained from the General Social Survey, Statistics Canada, Cycle 23, 2009 [archived] and appearing in Informing the Future: Mental Health Indicators for Canada, Ottawa, ON).
  • While someone’s sexual orientation is unlikely to be a risk factor itself for suicide or self-harm, current evidence shows that lesbian, gay, bisexual and transgender (LGBT) young people have a greater risk of suicidal behaviour than their heterosexual peers. Discrimination and stigma from others that many individuals experience in their everyday lives is one of the main reasons behind this. Stigma can prevent individuals from reaching out for help when they need it. (Royal College of Nursing and Public Health England, 2015).
  • Rates of anxiety and/or mood disorders are greatly elevated in lesbian, gay, and bisexual populations; just under 30% compared to 10.6% of general population respondents. The experience of stigma and discrimination is believed to contribute to the elevated risk of mental health problems. (Data was obtained using a special tabulations request from Statistics Canada and appearing in Informing the Future: Mental Health Indicators for Canada, Ottawa, ON: Author).
  • 22% of immigrants aged 15 years or older reported that most days are quite a bit stressful or extremely stressful. Stress is a known contributor to mental health problems. Immigration can remove people from familiar contexts, families and friends, jobs, customs, and community networks (Canadian Community Health Survey, Statistics Canada, 2012).

Understanding the costs of not addressing workplace psychological health and safety

The following statistics were compiled in The Wellness Dividend, Graham Lowe, Ph.D., The Graham Lowe Group. Complete sources are available on pages 28 to 32 of that document.

  • According to the 2011 Sun Life Buffett National Wellness Survey, Canadian employers ranked work-related stress as their top employee health concern.
  • A global wellness survey also flagged stress as the leading health risk motivating employers to invest in employee wellness programs (Working Well: A Global Survey of Health Promotion and Workplace Wellness Strategies, 2009).
  • Hundreds of studies confirm that job characteristics, the work environment and organizational factors play key roles in employees' experience of stress. People feel under stress when their job demands exceed their resources to respond to these demands (Lowe, 2014).
  • Other research shows a strong relationship between job satisfaction - a key indicator of overall wellbeing - and both mental and physical health. A meta-analysis of 500 job satisfaction studies confirms this relationship (Faragher, E.B., Cass, M. & Cooper, C.L. 2005).
  • A meta-analysis of 169 job stress studies concluded that an employee's job performance is negatively influenced by the presence of job stressors (Gilboa, Shirom, Fried & Cooper, 2008).
  • Lost productivity related to absenteeism, presenteeism (when an employee is physically present but unproductive) and turnover costs Canadian companies $6.3 billion (Smetanin, P., et. al., 2011).
  • Workplace stress is impacting other areas of people's lives. 20% said it put a strain on their marriage or relationship, 11% missed important events such as birthdays or weddings, 53% said it affected their sleep…and 27% their physical health (Mind YouGov survey, 2014).
  • Acts of hostility by supervisors including ridiculing, giving the silent treatment, blaming, taking undue credit, and breaking promises can result in negative consequences including abseentism, turnover and reduced productivity that result in a significant cost to organizations (Tepper et al. 2006).
  • There is [a] need for workplaces to invest in initiatives that promote positive workplace mental health, because of its negative association with psychological distress generally, as well as to protect employees' from the negative impact of work stress (Page, K.M., Milner, A.J., Martin, A., Turrell, G., Giles-Corti, B., LaMontagne, A.D., 2014).

The need for building resilience  

See Consider the Costs – Review Statistics Bibliography for complete citations for the studies and research cited here.

Additional Resources

The following are links to resources that may be of interest to you. If you click on a link you may be entering a third party website not maintained or controlled in any way by us or our affiliated companies. For more information, see Legal and Copyright.

The following provide additional information and evidence to support the business case from a leadership perspective.

The Shain Reports on Psychological Safety in the Workplace – A Summary.
Information courtesy of the Mental Health Commission of Canada.

Guarding Minds @ Work: Psychosocial Risk Assessment as a Corporate Governance Issue.

The Leadership Factor - Management practices can make employees sick.
Information courtesy of Workplace Safety and Prevention Services.

The Wellness Dividend: How Employers Can Improve Employee Health & Productivity
Report by Graham Lowe, Ph.D., provides employers and benefits consultants with a state-of-the-art, evidence-based overview of why investing in employee wellness makes sense. Also provided are practical insights. Information courtesy of the Graham Lowe Group.

A Plan for Mental Health and Productivity.
Information courtesy of Global Business and Economic Roundtable on Mental Health and Addiction in the Workplace.

Great-West Life Centre for Mental Health in the Workplace has commissioned several major national surveys on psychological health and safety in the workplace. See Survey Results.


Azagba, S., and Mesbah F. S. Psychosocial working conditions and the utilization of health care services. BMC Public Health 11, no. 1 (2011): 642.

Black, C. M. (2008). Working for a healthier tomorrow: Dame Carol Black's review of the health of Britain's working age population. The Stationary Office.

Brohan, E., Henderson, C., Wheat, K., Malcolm, E., Clement, S., Barley, E. A., . . . Thornicroft, G. (2012). Systematic review of beliefs, behaviours and influencing factors associated with disclosure of a mental health problem in the workplace. BMC Psychiatry, 11.

Buffett National Wellness Survey. (2011). Sun Life Wellness Institute.

Bronkhorst, B., Tummers, L.G., Steijn, B., and Vijverberg, D. Organizational Climate and Employee Mental Health Outcomes–A Systematic Review of Studies in Health Care Organizations. Health Care Management Review, Forthcoming (2014).

Canadian Community Health Survey, Public Use Microdata File, Statistics Canada (years 2003, 2005, 2007/08, 2009/10, 2011/12).

Dewa, C. S. (2014). Worker attitudes towards mental health problems and disclosure. The international journal of occupational and environmental medicine, 175-185.

Dewa, C. S., Chau, N., & Dermer, S. (2009). Factors Associated With Short-Term Disability Episodes. Journal of Occupational and Environmental Medicine, 1394-1402.

Dewa, C. S., Thompson, A. H., & Jacobs, P. (2011). The Association of Depressive Episodes and Work Productivity. Canadian Journal of Psychiatry, 743-750.

Faragher, B. E., Cass, M., & Cooper, C. L. (2005). The relationship between job satisfaction and health: a meta-analysis. Occupational and environmental medicine, 105-112.

Gilboa, S., Shirom, A., Fried, Y., & Cooper, C. (2008). A meta-analysis of work demand stressors and job performance: examining main and moderating effects. Personal Psychology, 227-271.

Ipsos Reid. (2012). Psychological health and safety at work.

Jagdish, K., Price, H. Workplace Harassment and Morbidity Among US Adults: Results from the National Health Interview Survey. Journal of community health 40, no. 3 (2015): 555-563.

Laschinger, H.K.S., and Nosko, A. Exposure to workplace bullying and post‐traumatic stress disorder symptomology: the role of protective psychological resources. Journal of nursing management 23, no. 2 (2015): 252-262.

Lowe, G. (2014). The Wellness Dividend: How Employers Can Improve Employee Health and Productivity. Kelowna: The Graham Lowe Group INC.

McCaughey, D., Turner, N., Kim, J., DelliFraine, J., and McGhan, G.E. Examining workplace hazard perceptions & employee outcomes in the long-term care industry. Safety Science 78 (2015): 190-197.

Mental Health Commission of Canada. (2015). Informing the Future: Mental Health Indicators for Canada, Ottawa, ON: Author.

Mind. (2014). YouGov Survey.

Olatunde, E.B., and Odusanya, O.  Job Satisfaction and Psychological wellbeing among mental Health Nurses. International Journal of Nursing Didactics 5, no. 8 (2015): 12-18.

Page, K. M., Milner, A. J., Martin, A., Turrrell, G., Giles-Corti, B., & LaMontagne, A. D. (2014). Workplace stress: what is the role of positive mental health? Journal of Occupational and Environmental Medicine, 814-819.

Rivkin, W., Diestel, S., and Schmidt, K.H. The positive relationship between servant leadership and employees’ psychological health: A multi-method approach. Zeitschrift für Personalforschung 28, no. 1-2 (2014): 52-72.

Royal College of Nursing (RCN) and Public Health England, 2015.

Rushton, Hylton, C., Batcheller, J., Schroeder, K. and Donohue, P. Burnout and Resilience Among Nurses Practicing in High-Intensity Settings. American Journal of Critical Care 24, no. 5 (2015): 412-420.

SALVEO Study on mental health in the workplace. (2014). SALVEO.

Smetanin, P., Stiff, D., Briante, C., Adair, C. E., Ahmad, S., & Khan, M. (2011). The Life and Economic Impact of Major Mental Illnesses in Canada 2011 to 2041. RiskAnalytica, on behalf of the Mental Health Commission of Canada.

Tepper, B. J., Duffy, M. K., Henle, C. A., & Lambert, L. S. (2006). Procedural injustice, victim precipitation, and abusive supervision. Personnel Psychology, 101-123.

Working Well: A Global Survey of Health Promotion and Workplace Wellness Strategies. (2009). Buck's Consultants.