Experts at the Word Economic Forum meeting agree. We’re likely headed for a recession, one that would only exacerbate the many interlinked crises that we already face, from climate change to the war in Ukraine. However, while leaders forged collaboration on a number of these issues, they missed one clear area where private-sector leadership could deliver important gains: mental health.
Economic security and mental health are closely connected. When there are downturns and people experience financial stress, their mental health suffers. When people have deteriorating mental health, they struggle at work. The result could be a vicious cycle, especially amid widespread uncertainty and rising rates of anxiety and depression.
If we want to forge collaboration in a fragmented world – the theme of this year’s Davos meeting – bolstering workplace mental health is a clear area of need.
In economic recession, people must contend with stressors like unemployment, income decline, and unmanageable debts. Studies find that this directly impacts mental health, contributing to increased rates of mental disorders, substance abuse, and suicidal ideation behavior.
The relationship can also work the other way. Poor mental health can impact employees focus or even cause them to leave the workforce all together. Just look at the ‘Great Resignation,’ which came at the same time as the mental health impacts of the pandemic.
Even when people stay in the workforce, financial stress can distract them and interrupt their performance. Employees experiencing financial stress are more likely to habitually miss work. Absenteeism costs U.S. companies $226 billion a year.
Therefore, organizations have a clear mandate and incentive to help employees navigate the financial stresses of a potential recession.
Leaders must recognize the importance of mental health support and workplace wellness by responding to employee wellbeing and mental health.
Strategies to support employees in reducing financial stressors include:
1. Offer employee financial wellness and education programs to ensure employees understand how to manage finances and plan for the future.
2. Prioritize mental health in the workplace and encourage tactics to support employee mental health especially under stress.
3. Direct to resources and benefits. Understand what resources organizations offer through their benefit programs.
4. Be a trusted partner in employee wellness. Companies can join together with employees to provide solutions for work/life balance, caregiving, personal finance, career development and more.
5. Re-examine strategies for pay and employee experience. Employers should take economic precarity into account when evaluating employee compensation to stay competitive.
World Economic Forum President Børge Brende said in his closing remarks, “In an uncertain and challenging time, one thing is clear. We can shape a more resilient, sustainable and equitable future, but the only way to do so is together.”
To get there, we must manage near term crises and even more importantly, their impacts on the wellness of people around the world. Prioritizing workplace mental health is a clear actionable step that can be taken today and one that is directly aligned with the World Economic Forum’s vision for private sector leadership in a changing world.