Analysts urge the UK to prioritise employees' mental health amidst cost of living crisis

The current global economic crisis is affecting the UK workforce in a myriad of ways. From soaring living costs to widespread strike actions, the far-reaching impacts of this unprecedented situation are palpable. However, the crisis may also be having a significant impact on people's mental health.

This is perhaps why PwC researched the increasing number of people who are taking sick leave for mental health-related reasons.

According to the research, 38 per cent of British businesses are affected by the rise in mental health-related sick leave by employees. The study also found that 52 per cent of businesses agree that employees' mental health has declined since the pandemic. Interestingly, the research showed that the cost-of-living crisis has contributed to this decline, with 53 per cent of businesses stating it has affected their employees' mental health.

The study revealed that long-term illness is a leading cause of economic inactivity and that employee wellness affects business performance, with 59 per cent of employers acknowledging this correlation. A worrying trend that emerged from the research is the increase in variations to employees' work schedules, with 41 per cent of respondents noticing a rise in part-time or reduced hours work patterns due to ill health.

As compared to before the pandemic, 41 per cent of respondents had noticed a rise in variations to employees' work schedules, such as more individuals working part-time or fewer hours. This increase is because of increasing ill health. Smaller businesses are bearing the brunt of the ill health crisis, with 48 per cent reporting an increase in employees with complex and ongoing medical issues. The research also found that 90 per cent of businesses have seen up to a fifth of their workforce take short-term sick leave in the past year, while 47 per cent have witnessed an increase in flexible working requests.

It is not surprising that the pressure of the pandemic has taken a toll on the mental health of the UK workforce, according to Anthony Bruce, Chair of the Health Industries at PwC.

He emphasised that while employers are doing a much better job of recognising the value of employees' health, they still need to prioritise wellbeing as a cornerstone of their overall business strategy, especially as more and more workers return to the office and adopt hybrid working.

In a time when stress and financial hardship are concerns for many, Bruce advised that organisations can benefit from helping employees stay productive while promoting their mental health and financial security.

The study highlighted that businesses have a role in supporting employees' health, with 55 per cent acknowledging this responsibility. While 44 per cent of employers already provide health and wellness benefits, 21 per cent plan to do so within the next two years. The most common benefits offered are increased annual leave or well-being days and the introduction of health technology apps.

Increased annual leave or well-being days and the introduction of health technology apps were the two most common employee benefits businesses introduced in the last two years as a way to support their employees' health and well-being, accounting for 38 per cent and 32 per cent of businesses, respectively. This differs with access to a gym (19%), on-site medical care (21%) and wellness services (21%).

With a growing focus on hybrid working, businesses are enhancing their commitment to the health and happiness of their staff members. In fact, reports say that the physical and mental health of employees is not negatively impacted by hybrid working and Strategic Sales Manager at Banner, Jason Thomas, recommended employers encourage hybrid working. The most popular measures include enhanced advertising of wellness benefits, coaching for managers and flexible working policies. As businesses plan to offer more health and wellbeing packages, physio/rehab and on-site medical care are among the most sought-after benefits.

What are the effects of the cost of living crisis?

Sixty per cent of the firms questioned expressed concern about how the cost of living crisis would affect the mental health of their workers, and more than half (55%) agreed that they had a responsibility to assist their workers.

According to the study, more than 77 per cent of companies have improved their workers' financial advantages over the past 12 months, such as wage raises or bonus salaries. Additionally, more than half (59%) have given employees one-time financial benefits like energy assistance and cost of living bonuses. The cost of living crisis (49%) and the need to retain personnel and talent inside organisations (54%) were the main reasons why employers extended additional financial assistance in the previous year.

Alastair Woods, a Partner in PwC's Workforce Transformation Practice, noted that working remotely does increase productivity, modified working processes and created time. He, however, posited there had been additional negative effects on the workforce, such as those on mental health, and some of the earlier gains in productivity have been lost.

Woods urged employers to continue supporting their employees and demonstrating their dedication to health in various forms, from training and upskilling to performance management and investments in technology.