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Employers must train managers on how to solve mental health issues and give employees more say over how they do their jobs if Australia is to avoid a doubling in the number of workers’ mental health compensation claims by 2030.
The warnings come from a new report released on Wednesday by the Committee for Economic Development of Australia, which urged employers to prioritise mental health to the same degree as physical health and said popular measures such as free yoga sessions and fruit boxes did little to improve employee wellbeing.
Based on the historical rate of growth in claims and other mental health-related statistics, the report offered three scenarios for the future trajectory of the number of mental health compensation claims in Australia.
Claims double by 2030 under the moderate-growth scenario and almost triple by 2030 under the high-growth scenario.
“The trends are even more concerning when looking at the costs of claims,” the report said, adding that the median time off work for mental health claims was 27 weeks, compared to seven weeks for all serious claims.
“Median compensation costs per claim for mental health conditions grew from $14,300 in 2000-01 to $45,900 in 2018-19,” the report said.
“If recent trends continued, median costs per claim could triple in real terms by 2030.”
Report author and CEDA senior economist Cassandra Winzar said mental health claims are more expensive than physical health claims as they are typically more complex.
She told The Australian Financial Review that awareness around mental health issues was increasing, but employers were often unsure how best to deal with them.
“What we often see is that workplaces do the easy things, which is not surprising, so they put on a free yoga class or maybe a fruit box,” she said.
“Those are all good things ... but they’re not actually going to have a substantial impact on employees’ mental health. The things that do take a bit more work are a bit harder to implement.”
Ms Winzar said training bosses to manage mental health, involving employees in the design of their jobs and introducing organisation-wide mental health strategies were three effective measures that employers should pursue.
Leadership holds the key
OECD research cited in the report found that a manager’s attitude towards an employee had the most significant impact on their mental health, with a positive attitude reducing the probability of the employee developing a moderate mental disorder by 6 per cent.
The findings resonate with McConnell Dowell regional health and safety manager Grant Fuller.
As part of a consortium including consultants Lysander and Professor Luke Downey from Swinburne University, Mr Fuller helped design and implement a program to improve the soft skills of managers working on the Mordialloc Freeway Project after research by the university identified inadequate leadership as the second most significant driver of poor mental health in the construction industry. The first was long working hours.
Conducted in 2018, the university research found that average levels of depression in the construction industry exceeded population norms by 40 per cent. Meanwhile, almost half (46 per cent) of respondents met the criteria for burnout and about six in ten (59 per cent) reported being dissatisfied with their work-life balance.
In response, the consortium designed the Integrated Approach to Wellness program to promote mental health and prevent mental injury by changing workplace cultures and practices. Mr Fuller said the initiative focused on “leadership development and team cohesion” and drew on the work of Patrick Lencioni, who wrote The Advantage, and The Five Dysfunctions of a Team.
“It’s all around creating cohesive leadership teams, so how well leadership teams work together, how much trust is there,” Mr Fuller said.
“Once you get trust, you’re able to challenge one another. And once you’re able to challenge one another, you’re able to come to the best solutions as a team.”
Unlike his previous efforts to influence positive change by focusing on middle managers, Mr Fuller said the Integrated Approach to Wellness program delivered strong results because it focused on leaders.
Between May 2020 and June 2021, work-life balance dissatisfaction among those working on the freeway project fell by 60 per cent, burnout by 41 per cent, depression by 46 per cent, anxiety by 39 per cent and stress by 34 per cent.