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5 Strategies for Improving Mental Health in the Workplace

January 27, 2025

Employee mental health can make or break business success. Explore its impact on your bottom line, and what you can do about it.

Blog Post

Ever felt like your job is a constant cloud over your head, casting a shadow on your overall well-being?

If so, you're not alone. Thirty-nine percent of working adults say their work environment negatively affects their mental health.

This is a shocking and serious statistic for HR and other organizational leaders. When employee mental health is at risk, so is an organization’s success.

Here’s the good news: With the right strategy and tools, leaders can address declining mental health in the workplace, both proactively and retroactively — and create a productive, efficient, and sustainable workforce for everyone.

In this article, we’ll cover what every HR leader needs to know about true mental health awareness and action. We’ll explore causes, impacts, and potential solutions for your organization, no matter what your employees are struggling with.

Key Takeaways

Some of the most common workplace mental health issues surround stress and burnout, depression and anxiety, and loneliness or lack of connection. High demands from employers and little support are among the biggest contributing factors.
Poor workplace mental health impacts employee retention, productivity, and overall organizational success.
Creating a mentally healthy workforce requires investments in things like connection, empathy, and accessibility.

What is Employee Mental Health?

“Employee mental health” refers to an employee’s sense of mental and emotional well-being within the workplace. The term encompasses how an employee’s workplace makes them feel.

Some of the most common workplace mental health issues include:

Stress and burnout: 77% of workers report experiencing work-related stress. This chronic stress then breeds employee burnout, a condition so prevalent that the World Health Organization recently included the term in its International Classification of Diseases.
Anxiety and depression: Anxiety, marked by excessive worry, fear, and nervousness, is another common employee mental health issue. Likewise, depression, characterized by low moods and little interest in work, is common, too.
Loneliness: Feelings of social isolation or loneliness often contribute to depression, anxiety, and decreased well-being among employees.

What Causes Mental Health Issues in the Workplace?

Many workplace factors contribute to poor employee mental health. But here’s what’s at the heart of most of them: Employees feel they’re being asked to do a lot, but receive very little support and care in return.

So, what is causing employees to feel stretched too thin?

Poor work-life balance: Workers report blurred boundaries between work and personal life. Only about one-third of workers said that their employer encourages breaks when asked in an American Psychological Association study.
Lack of connection: We’re in a connection crisis. A survey of the top employers on Glassdoor found that only a third are satisfied with the social connection at work. Employees feel disconnected from genuine, authentic workplace relationships.
Toxic workplace culture: Employees also feel underappreciated, undervalued, and unsafe. In fact, just 26% of leaders foster their team's psychological safety, where team members feel they can take risks without losing respect.
Limited inclusivity and equity: Many workplace mental health benefits and programs are one-size-fits-all — and not in a good way. These workplace wellness programs don’t address employees’ individual circumstances, needs, and challenges, like accounting for:
- Gender: Working women under the age of 30 carry the greatest burden of fair or poor mental health.
- Disabilities: More people living with a disability report a toxic workplace than those without a disability.
- Identity: Close to one-third of workers said they feel unsupported because of an aspect of their identity (race/ethnicity, gender, sexual orientation, ability status, age, etc.).

How Does Mental Health Affect Work Performance?

Good mental health isn’t only important to employees’ individual lives, but it’s also a driving factor for business success:

Talent retention and attraction: 62% of U.S. workers say a work-life balance is one of the most important factors they consider when debating leaving for another job. Meaning, organizations that don’t prioritize mental health can suffer from poor retention and an inability to attract top talent.
Productivity and engagement: Mental health and productivity in the workplace are closely linked. Issues like depression and anxiety, which reduce cognitive performance, cost the global economy $1 trillion each year, according to the World Health Organization.
Absenteeism: Because mental health issues can be so debilitating, many workers who struggle have higher rates of absenteeism, taking mental health days. Research shows that an estimated 12 billion working days are lost every year due to depression and anxiety.

How to Improve Mental Health in the Workplace

The evidence clearly shows that employee mental health is critical. But many HR leaders still struggle to provide and implement solutions.

Here are a few ways that are both effective and sustainable:

1. Leverage Data

To address mental health in the workplace, companies must first understand what employees are struggling with.

Send out regular employee engagement surveys to collect:

Quantitative data, like levels of employee engagement and retention.
Qualitative data, like employee opinions, questions, and concerns.

Include survey questions specifically designed to gauge stress levels, work-life balance, and overall job satisfaction to gain insights into the mental well-being of their workforce. These surveys should include open-ended questions to allow employees to share their experiences and concerns in their own words.

Managers can then see how their workplace culture or benefits impact employees daily and then create a solid action plan in response.

2. Cultivate a Culture of Empathy

Shame, stigma, and a perceived lack of empathy often prevent employees from addressing their mental health. Without this psychological safety, productivity plummets.

Employers should promote a culture of empathy at work by encouraging open communication, actively listening to employees' concerns, and providing training on emotional intelligence and compassionate leadership.

At the same time, employers must help their employees move forward — not just wallow in defeat.

Empathy at work isn't “crying on the floor with your employees,” writes Maria Ross, author of “The Empathy Edge.”

“[Empathy at work] is a method of trying to understand why somebody sees a situation, their performance, or the responsibilities of the job in a certain way,” she writes. “When you have an empathetic leader, and you have an empathetic culture, engagement, performance, loyalty, and job satisfaction improve.”

3. Create Connection

Curbing loneliness and creating workplace connection isn’t just about bringing everyone back to the office. TELUS Health Senior Vice President Paula Allen says that where a person works is less of the issue — it’s more about the quality of our connections to our colleagues, not quantity or proximity, that matters.

To create quality connections at work, and improve mental well-being in the workplace, people leaders need to:

Invest in awarding and acknowledging employees regularly (both one-on-one and in team meetings).
Provide accessible spaces for remote and hybrid employees to connect in real time.
Create opportunities for employees and leaders to share their experiences and challenges, such as mentorship opportunities or social events.

4. Invest in Holistic Employee Care

Benefits and programs must be holistic if employers wish to adequately address their employees' health and safety. This means they must meet each employee where they are, accounting for diverse needs and life circumstances.

Most employees are on board. Our recent survey of U.S. workers found that 89% — especially millennials and frontline staff — consider employer-provided mental health support important.

84% employed Americans believe employers should offer mental health services. 43% strongly agree.

Wellness programs range from stress reduction classes, smoking cessation programs, employee resource groups (ERGs) and more.

For example, a comprehensive domestic violence policy and process — which might include offering parking lot escorts, designating an onsite safe room, hiring extra security guards, and offering referrals to an ERG — helps to support employees holistically, said Lynn Fairweather in a Paylocity HR Mixtape podcast.

But, these supports are going to look different for each employer.

“[Leadership teams] must think creatively — every case has unique needs and there is no one-size-fits-all answer,” Fairweather said. “The only way to truly know what an employee needs is to avoid assuming and ask questions like, ‘How can we help you feel safer at work?’ or ‘What would make it easier for you to perform your job?’”

Whatever the program, genuineness is key. Ensure your wellness offerings aren’t superficial, check-the-box activities that leaders aren’t invested in and that employees don’t need.

5. Promote Accessibility

Fifty-seven percent of workers can’t confirm the existence of mental health benefits in their workplace. That’s staggering.

Benefits programs are only effective if they’re accessible. To ensure your employees can leverage your programs, be sure you do the following:

Provide self-service resources that allow for easy benefit enrollment, from any device.
Give employees a straightforward user experience for reviewing and choosing plans.
Regularly communicate your offerings, especially fringe benefits, which might not be top of mind.
Offer documentation and support in multiple languages to cater to a diverse workforce.

Addressing Mental Health in the Workplace with Paylocity

HR leaders are responsible for providing their employees with the highest level of support. Let Paylocity help! Beyond our core payroll and HR software, we also have features for directly measuring and improving employee wellbeing:

Community, an employee engagement hub, streamlines communication and fosters employee connections.
Recognition and Rewards, a feature embedded throughout the platform that makes it easy to congratulate teammates on a public social feed.
Employee Voice, a survey tool to uncover insights on any topic relevant to their employees.

Want to learn more? Request a Paylocity demo.