Why ignoring mental health can undermine the Jobs and Skills Summit results

The Labor’s Jobs and Skills Summit will be an excellent opportunity to discuss policies regarding several critical workforce issues, from wages and productivity to skill shortages and immigration. But it’s worrying that the federal government seems to be ignoring an essential theme: workers’ mental health. There is a direct correlation between mental health and several issues the meeting is trying to solve. Failing to properly take account of this mental health can undermine the efficacy of the summit.

The pandemic and multiple changes in how we work have severely impacted Australian workers’ mental health, which has not recovered despite the end of restrictions, high vaccination rates and economic recovery.

LifeWorks Mental Health Index shows that Australian workers’ mental health dropped dramatically after the start of the pandemic — indeed, the overall score dropped to the equivalent of the most distressed 1% of the pre-pandemic benchmark population.

In April 2020, the index fell to 57.8 on a scale from 0 to 100, where optimal starts at over 80. Since 2020, the problem has improved, but the score never exceeded 64.5, which means our workers have never fully recovered from the initial impact. The sub-scores of the Mental Health Index highlight that women, parents, post-secondary students, those with reduced income, and those without emergency savings are among those whose mental health has shown the greatest decline.

Several research studies that examined the aftermath of other prolonged epidemics found that the higher levels of mental health issues that emerged during such crises persisted for several years after the risk to physical health had subsided.

One risk we face is that before we improve these numbers substantially, Australia is entering a phase of economic insecurity — with rising inflation and interest rates — likely to generate uncertainty and financial stress.

Financial strain compounds mental health issues, and the danger is our workforce’s mental wellbeing to start declining again.

Another challenge Australian workers face is that our healthcare system is under extreme pressure, with less than an optimal number of specialists and overloaded hospitals.

Most workers are struggling to find appropriate support. This follows a period during COVID-19 when workers neglected, or were unable to address, their physical health. Once again, a deterioration in physical well-being compounds mental wellbeing.

One of the crucial discussions during the summit will be how to increase productivity, which has been lagging for decades in Australia. But failure to address mental health issues in the workforce directly impacts business productivity and operational costs.

A high level of mental issues in the workforce increases absenteeism, insurance claims and premiums, which is already happening and worsening. Discretionary effort and presenteeism have an even greater negative impact on productivity. Even when they go to work, employees with mental strain or illness produce much less than when they are well, decreasing results and outputs.

The Productivity Commission’s draft report on mental health estimated that the cost of mental illness to the economy is, conservatively, $51 billion yearly, with an $18 billion loss coming from low productivity and reduced participation in work.

The talent shortage is another critical issue that business leaders, politicians, unions and workers will discuss in Canberra. The primary debate is how to balance the right level of training with bringing more skilled migrants to close the current gap in several sectors.

This is also a dimension in which ignoring mental health is a mistake. The National Health Survey 2020–21 estimates that 20% of the population had a mental illness in the analysed period. As a result, a significant number of workers get out of the market or decide not to get in because of their illness. The ability to rehabilitate and re-engage such workers by supporting mental health treatment should be a critical part of the considerations.

Dealing with a challenge of such proportions is complex and will demand much more preventive work from governments and higher involvement from businesses.

Government support for mental health has grown in the last decade. However, it primarily focuses on acute, high-intensity mental health issues and curative health care. This needs to change as it contrasts with its own Stepped Care model, which identifies a spectrum of mental health issues and care — highlighting a gap in supporting preventive mental health care.

The government must also support businesses by implementing adequate legislation and setting standards for companies on how they must help employees and prevent risk.

Businesses have a crucial role in improving mental health at the workplace. Companies must implement tools and guidelines to monitor risks and early detection, communicate to raise awareness and reduce stigma and provide appropriate resources to staff. Critically, companies must also train managers to recognise and respond to mental health issues.

If we want to achieve better productivity, higher economic security, have more workers available and recover our health system, discussing how to improve the mental health of our workers is essential and needs to be considered by the Job and Skills Summit.