Is a toxic workplace costing you?

From absenteeism to burnout, why it pays to foster a healthy work environment

7-minute read

We spend a lot of time at work over the course of our lives. As a result, our work environment can have a significant impact on our wellbeing. Although every job comes with a certain amount of stress, companies that minimize unnecessary stress and cultivate a healthy workplace reap many benefits—their employees are more productive, engaged, creative and innovative.

Jordan Friesen, an occupational therapist and President of Mindset Mental Health Strategy, says that unnecessary stress at work is caused by different factors that vary between companies:

Unclear communication and expectations
Incidents of incivility and disrespect
Discrimination and inequality
Persistent, excessive workload
Poor job fit
Unsafe or poor physical working conditions

“Many of these stressors are closely connected to things business owners already care about, such as accountability, culture and workload management,” says Friesen. “But their negative impact reaches far beyond basic productivity.”

Poor mental health is considered a top cost driver for employers… mental illness makes up about 30% of short- and long-term disability claims in Canada, but accounts for 70% of workplace disability costs.

What’s the cost of a toxic work environment?

Absenteeism, turnover and burnout are just a few of the challenges experienced by companies who don’t cultivate a healthy work environment. A stressful workplace can also tarnish your brand, making it difficult to recruit talent and even alienating some of your clients or prospects.

“Poor mental health is considered a top cost driver for employers,” says Friesen. “According to research by the Mental Health Commission of Canada, mental illness makes up about 30% of short- and long-term disability claims in Canada, but accounts for 70% of workplace disability costs.”

What can businesses do to avoid employee burnout?

Friesen says that employers who want to create a healthy and productive work environment need to take a two-pronged approach.

Prevent a toxic workplace

“The focus here,” he says, “is on minimizing unnecessary workplace stress to create an environment where people are less likely to experience mental health issues and burnout.” These are just a few preventive actions businesses can take.

Communicate—employees throughout the organization should have a clear understanding of what’s expected of them
Train your leaders—ensuring they have the proper skills and resources to manage effectively is one of the most impactful strategies for promoting mental health at work
Encourage transparency—create opportunities for open dialogue and constructive feedback to foster a culture of trust and accountability
Champion diversity, equity and inclusion (DE&I)—establish clear DEI goals and guidelines so that your business is a welcoming workplace for all
Prioritize safety—unsafe working conditions lead to injuries, illness, absenteeism, turnover, poor quality and low employee morale
Model healthy habits—for your own sake as well as that of your employees, be sure to disconnect and take care of yourself so they can follow your lead

Provide a safety net for your employees

Work is not the only source of stress in people’s lives. Sometimes, people struggle with mental health challenges that are not work related. “Businesses can provide a safety net of tools and resources to help them manage,” says Friesen. “Ultimately, this is beneficial for the business as well.”

He adds that even though there is a cost associated with some of the options, it’s less expensive to support someone when they need it than to deal with the aftermath of them leaving the workplace. “Disability claims take a long time to resolve and losing an employee for that long can be very disruptive to a business, especially one with a small workforce.”

However, there are many actions businesses can take to create a safety net for their employees.

Establish an Employee Assistance Program (EAP)—this could include access to counseling, coaching support, wellness tools and more
Train your leaders—make sure they know how to support an employee who’s struggling with mental health issues
Check local resources—find out if your local Chamber of Commerce and other community organizations provide access to discounted programs or benefits
Look into online therapy—there are many virtual therapists you could direct your employees to who offer counseling at a lower rate than an in-person counselor
Share free resources—the Canadian Mental Health Association’s BounceBack® program and Wellness Together Canada both offer a variety of information, tools, support groups and coaching to help people manage mental health and/or substance abuse issues
Listen—if you notice a change in an employee’s behaviour and/or performance, don’t be afraid to approach them with care and concern, identifying what you have observed and giving them an opportunity to be heard and problem solve with you

Free resources to help businesses improve mental health

According to the Government of Canada, psychological health problems cost the Canadian economy about $51 billion per year, $20 billion of which results from work-related causes. To raise awareness and curb some of this impact, these free resources are available to help employers improve mental health at work.

The National Standard of Canada for Psychological Health and Safety in the Workplace (the Standard)

The Mental Health Commission of Canada has developed a comprehensive framework consisting of voluntary guidelines, tools and resources to help organizations promote mental health in their workplace.

Guarding Minds at Work

Listening to your employees is a great way to find out how they feel about their work environment. The Guarding Minds tool provides three different surveys that organizations can use to collect feedback from their employees on psychological health and safety at work.

“One thing to remember is that silence in the workplace is not necessarily a ‘no news is good news’ situation,” says Friesen. “On the contrary, silence can be a sign your employees don’t feel comfortable sharing their point of view. Showing genuine interest in their perception and giving them a safe way to provide feedback will help you get a pulse on your work environment. This is a crucial first step to cultivating a healthy and productive workplace.”

Next step

Read these 7 management tips on how to get the best from your employees.

Find out how employee resource groups can help you build a stronger, more inclusive organization