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One in five adults in England is living with a common mental health problem, and rates are rising steadily, making it one of the biggest people management issues in the modern workplace. With smaller teams, the impact of poor mental health management can mean North West SMEs suffer the biggest consequences. Access to outsourced expert HR support when you need it can be invaluable in helping to manage to impact of mental health challenges at work.
In this article, we will cover:
The current mental health landscape in the UK
Factors affecting mental health at work
How mental ill health presents at work and common causes
The business costs of mental ill health
Benefits of mentally healthy organisations
How SMEs can support mental wellbeing
The signs of mental ill health
Talking about mental health and how to approach conversations
The importance of manager training
The role of Employee Assistance Programmes
Tips on preventing mental health issues at work
Employers must act on signs of mental strain
Our individual level of psychological safety, emotional and social wellbeing changes affect the way we make decisions, the way we interact with our colleagues and our ability to handle stress. Mental health challenges can affect anyone at any time and may be caused by numerous factors including circumstances at work. When employers and managers fail to act on the signs of mental strain, an employee’s wellbeing can easily spiral out of control, resulting in exhaustion and long-term sickness absence.
Current UK mental health landscape
Mental health is now one of the leading causes of sickness absence in the UK. According to the CIPD’s 2025 Health and Wellbeing at Work report, mental ill health is responsible for 29% of short-term, and 41% of long-term absences.
Factors affecting mental health at work
Poor mental health affects the way employees think, feel and behave whilst at work. External factors such as international and political conflict may cause tension and unease. Add the UK’s rising cost of living to the mix and the strain further increases. Employees on lower salaries feel the effects of increasing mortgage and rental rates, council tax, food and energy prices more profoundly. This may naturally result in people bringing their financial worries to work with them, pulling their focus away from their role.
Family and personal relationship problems, and physical health concerns are also contributing factors. Young people are increasingly struggling with their mental health, caused in part by remote and hybrid working patterns and lack of social connection. Remote team members may feel isolated and less engaged compared to those who regularly interact with colleagues. This means managers have an important role to play in spotting the signs of mental distress.
How mental ill health presents at work
Research by ACAS found that 32% of managers report stress, anxiety or depression as the main reason for employee absence - the third most common reason after flu, and headaches or migraine.
Other common signs of mental health challenges include:
Anger
Exhaustion
Retreat and Isolation
Sick leave and long-term absence.
Common causes of mental health issues at work
Poor mental wellbeing can be caused by several factors within the workplace:
Resentment around workload
Lack of meaningful work
Inadequate line manager support
Being set unrealistic deadlines
Low morale and engagement
A lack of control over personal career development
The instability caused by frequent change and reorganisation.
Every manager should be trained to spot the signs. We’ll come on to this in more detail later on.
The cost of poor mental wellbeing at work
The cost of mental ill health in England is estimated to be £300bn/year. MIND
HSE data for the year 2024/25 shows 22.1 million working days were lost to stress, depression or anxiety due to work-related ill health. On average, each person absent due to mental health took 22.9 days off work.
When you equate the cost of just one long-term sickness absence on a small or medium-sized business, the financial cost can be huge - particularly in light of Statutory Sick Pay changes under the Employment Rights Act, which gives workers access to sick pay from day one.
The broader impact of mental ill health spans non-financial areas too, including:
Loss of productivity
Impact on colleague morale
Risk of resignation and attrition when wellbeing is not handled sensitively and effectively
Increased risk of burnout.
Employees who feel mentally and physically well are more productive, get on better with their colleagues, make smart decisions and work at a faster pace, resulting in a valuable contribution to the workplace.
The benefits of mentally healthy organisations
Building a strong, healthy workplace culture helps employees to feel valued, resulting in a happier, healthier workforce. It can also enhance your reputation as a good employer and a great place to work. This can put your business at an advantage when attracting new employees and retaining talent.
Employers who prioritise the health and wellbeing of their workforce experience:
Enhanced morale
Fewer days lost to sickness absence
Low staff turnover
Increased loyalty and commitment
Higher rates of innovation
Greater productivity and performance
Reduced risk of conflict
Increased employee engagement
Optimal profitability.
How can SMEs support employee mental health and wellbeing?
Every business has a duty of care to its employees. Supporting employees through mental health challenges starts with understanding. Robust policies and procedures around managing mental health at work provide managers with a strong foundation of knowledge and company expectations.
Our pay as you go HR Service is ideal if your business is looking for ad-hoc advice or support to create or refresh employment policies.
Look out for these signs of struggling mental health
To safeguard employee wellbeing, it is critical that managers are able to spot issues before they worsen.
Here are some questions to help you spot the signs in your team:
Are people working through their breaks or taking more breaks than usual?
Do certain employees have holidays left to take at year-end?
Is anyone regularly working long, unsociable hours?
Do they arrive late to work?
Has their absence level increased?
Is anyone lost interest in their work?
Is someone taking longer than usual to complete tasks or unable to concentrate?
Has their behaviour changed?
Has their standard of work dropped?
Has the way they interact with their colleagues changed?
Do they looked tired or withdrawn?
Are they eating properly?
Talking about mental health at work
If you have noticed a change in an individual’s mood or character, you should have a conversation with them as soon as possible. The conversation will allow you to evaluate the situation and introduce appropriate support and/or make necessary adjustments.
Figures from Mental Health First Aid England show that across the UK, only 38% of leaders talk openly about mental health. Managers’ confidence in supporting team members rose by 53% after receiving training on how to hold mental health conversations.
Never underestimate the power of a one-to-one conversation. It can be a huge relief when a manager either makes the first move and offers support, or responds positively to a conversation request.
Championing open conversations in your approach to mental health and wellbeing will encourage more people to speak up and ask for help. Sadly, fear of repercussions and a lack of trust in line managers or the wider business means employees still struggle to open up at work. Managers should lead by example in talking openly and creating the culture that supports this.
How to approach the conversation
Choose an appropriate place to hold the discussion - somewhere comfortable, quiet and private
If the employee approached you first, thank them for coming to you
Reassure the individual that the content of the discussion will only be disclosed to others with their agreement.
Ask open questions, such as ‘I’ve noticed you’ve been arriving late lately and wondered if you were okay?’
Be patient, listen carefully, and don’t rush the conversation
Keep an open mind
Be honest and clear in your responses
Ask what support or adjustments they think would help make life easier at work
Signpost support services that may help, e.g. visiting a GP, or counselling through your EAP
Reassure them that your door is always open, and that you are there to help them access the support they need
Agree on next steps and when you will meet again.
You may need to seek professional HR advice to provide the best support to the employee. Please get in touch for guidance from our CIPD accredited team.
The importance of regular check-ins
Regular conversations help managers to spot signs of mental stress, anxiety and poor work-life balance. Asking open questions about health and wellbeing normalises the conversation, strengthens relationships, and should help to identify solutions before a mental health issue results in sickness absence.
Manager training for positive mental health conversations
Adequate training for managers is key to building the confidence and trust that leads to positive, open conversations about mental health. Managers need to know how to approach conversations to help employees feel comfortable opening up about sensitive topics, how to recognise a cry for help, what actions to take and which services to signpost.
Whatever training is in place, people will always find it difficult to share their personal worries. We recommend employers provide a programme of support with a choice of options, including Mental Health First Aid, Employee Assistance Programmes, wellbeing benefits and external support.
We offer a choice of 10 health and wellbeing focused CPD-accredited online training courses, including modules on managing mental health at work. Browse our catalogue to find learning to suit your needs.
Employee Assistance Programmes
Given the lengthy waiting times for NHS counselling and mental health support, Employee Assistance Programmes (EAPs) have become highly valuable resources. In 2024, 623,750 employees contacted EAP providers, and an estimated 1,115,500 counselling sessions were provided. A growing reason for contact is parents concerned about the mental health of their children, highlighting that mental health struggles are not always related to an individual.
Investing in an EAP is an investment in employee wellbeing. Usually accessed via a telephone helpline, app or website, employees can talk confidentially to trained experts about their worries, challenges and traumatic life events.
EAPs can provide direct and immediate access to:
Counselling services
Professional assessment and advice
Counsellors are also trained to identify ‘at risk‘ individuals to get them immediate support.
According to the Employee Assistance Professionals Association (EAPA), for every £1 spent on an EAP in the UK, employers see an average return on investment of £10.85. This may come in form of reduced absence, presenteeism and lost management time.
More than 186,000 UK employers have access to an EAP and usage rates are increasing, but EAPs cannot work alone. They should be part of a wider wellbeing strategy, ideally shaped by employees. We’d recommend taking time to consult with your people on what support they would like, to help you to invest in services and resources that will provide the most benefit.
Preventing mental health issues at work
In every small business there is always scope to do more to support employee wellbeing. These are some of the strategies we recommend to our clients that may drive improvement in mental health at work:
Review workloads to ensure they are manageable and avoid undue stress
Ensure remote workers set boundaries between work and home life
Offer additional support for parents and carers
Treat every flexible working request on its own merits
Review your EAP to ensure it is delivering for your employees
Allow time off for medical appointments
Focus on health and wellbeing activities, such as yoga or mindfulness classes, step challenges or lunchtime walks
Offer financial wellbeing education sessions to help with budgeting, managing debt, retirement planning and pensions.
Encourage employees to take their full annual leave entitlement and switch off from the demands of work
Encourage regular breaks away from screens
Appoint Mental Health First Aiders.
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