Mental health has long become a strategic success factor: it directly affects productivity, innovation, employee retention, and employer attractiveness. A company can perform only as well as the people who work in it – and their mental resilience determines how effectively teams navigate pressure, growth, or change.
At the CEO level, the topic plays a particularly central role. What is prioritized, funded, and modeled at the top shapes culture, leadership behavior, and strategic decisions across the entire organization.
This article therefore brings together everything CEOs need to know about mental health in the workplace – compact, clear, and presented in a Q&A format for quick orientation.
1. Why is mental health in the workplace especially relevant for CEOs?
The mental health of a team directly affects productivity, innovation, and long-term employee retention. Employees under mental strain cannot sustain high performance over the long term.
And this is not a marginal issue: studies show that one in six employees faces a mental health challenge at least once in their lifetime. In 2022, 81% of employees even felt at risk of burnout. From a business perspective, mental health therefore belongs at the very top of the agenda.
CEOs not only carry a legal responsibility for safe and health-promoting working conditions, but they also strongly influence the company’s cultural mindset. How seriously the executive team takes mental health shaped culture, leadership behavior, and employer attractiveness for new talent. Moreover, it is management that embeds mental health strategically – through structures, budgets, priorities, and the development of leaders.
2. What costs do CEOs risk by ignoring mental health in the workplace?
When CEOs neglect mental health in their organization, the price can be high. The World Health Organization (WHO) estimates that depression and anxiety disorders cost around 12 billion workdays globally each year, resulting in an estimated productivity loss of approximately one trillion USD.
At the company level, studies highlight three particularly relevant cost factors:
- Loss of productivity and presenteeism: Employees may show up to work but perform significantly below capacity. This “silent productivity loss” often goes unnoticed – yet it is one of the largest cost drivers.
- Absenteeism and sick leave: Mental health issues lead to longer periods of absence. According to the AOK Absence Report, sick days due to psychological strain have increased by 47% over the past ten years.
- Turnover and burnout-related resignations: Employees who are consistently overburdened and unsupported often leave. Replacing a skilled employee can cost between 40% and 200% of their annual salary, depending on the role.
3. How does employees’ mental health affect their performance?
Mental health is a key driver of cognitive performance – and is therefore directly relevant to productivity and innovation. Strains such as stress, anxiety, or exhaustion weaken exactly the skills modern teams need: focus, cognitive flexibility, risk-taking, and the ability to solve complex problems creatively.
Research in creativity and workplace studies shows that mentally resilient employees not only handle creative tasks more efficiently but also generate ideas more frequently.
The impact can be significant, as demonstrated by the use of the nilo platform:
- Employees who regularly engage with content are 15.3% more productive.
- Participants in one-on-one sessions report a 47.2% increase in productivity.
- The greatest effect comes from combining both offerings – here productivity increases by 50.3%
At the organizational level, the correlation is also clear: companies that do not actively promote mental health can face productivity losses of up to 25%.
4. How does mental health shape employer branding – and help CEOs retain talent long-term?
Mental health is a key factor in employer choice – especially for Gen Z and Millennials. Without adequate support, an employer’s attractiveness drops significantly.
Companies with visible mental health initiatives strengthen their employer brand, improve recruitment, and are more often perceived as an “Employer of Choice”.
The effect is also evident internally: good mental health conditions increase engagement, satisfaction, and loyalty. Studies show up to 20% higher employee retention in organizations with a clear strategy to promote mental well-being within teams.
Conversely, a lack of support leads to turnover, burnout-related resignations, and high costs for replacing employees.
5. How can CEOs recognize warning signs of mental health challenges in the company and teams?
Mental health challenges rarely appear overnights. Before performance declines or teams experience breakdowns, subtle but clear signs often emerge. It is crucial for CEOs to recognize these patterns early. The following warning signs provide a good overview of what to watch for:
Quantitative early indicators
- Increase in sick leave, especially due to mental strain
- Longer-term absences in specific terms
- Higher turnover
- Declining engagement scores and noticeable results in pulse surveys
Behavioral and cultural changesZunemende Konflikte, zynischer Umgangston, Gereiztheit im Arbeitsalltag
- Rising conflicts, cynical attitudes, or irritability in daily work
- Complaints about leadership, reduced willingness to take risks, and lack of innovation
- Leaders withdrawing or showing signs of overload
Structural indicators
- Chronically high workloads, constant crisis mode, lack of predictability
- Low utilization of support offerings – or sudden spikes in usage within specific teams
6. What are employers’ responsibilities regarding employees’ mental health – and what remains the employee’s responsibility?
Employers carry comprehensive responsibility for protecting mental health in the workplace – not only because national laws and EU directives require it, but also because a healthy work environment has long become a competitive factor.
At the same time, mental health is always a shared effort: employees also have a personal responsibility to recognize warning signs, accept support, and actively contribute.
Only when both sides fulfill their role does an environment emerge that sustainably strengthens both the company’s performance and the individual’s well-being.
General duty of care and protection
According to the EU Framework Directive 89/391/EEC, all health risks – including psychosocial stressors such as stress, overload, bullying, or workplace violence – must be assessed preventively and minimized through appropriate measures.
Obligation to conduct psychological risk assessments
In Germany, the assessment of psychological strain has been explicitly anchored in the Occupational Safety Act (§5 para. 3 ArbSchG) since 2013. This obligation applied from the very first employee. Strains must be systematically recorded, documented, evaluated, and regularly reviewed – especially during organizational changes.
Duty for prevention and intervention
When harmful stressors are identified, appropriate measures must be implemented – for example, in work time design, role clarity, leadership culture, or conflict prevention. Individual support offerings and reintegration after periods of strain also fall under this duty.
Mental health as part of ESG and sustainability strategies
Mental health has long become a relevant component of ESG strategies. Under the “S” (social) component, employee well-being is not a core aspect of corporate responsibility – both morally and economically. In ESG reporting, mental health is gaining importance: visible measures signal to investors, partners, and talent that the company takes social responsibility seriously.
What is ESG?
ESG stands for Environmental, Social, and Governance. In a corporate ESG report, companies document all their policies and measures for sustainably protecting the environment, their people, and the organization itself.
7. How can CEOs create a mentally healthy and psychologically safe company culture?
CEOs have a strong influence on whether mental health and psychological safety are actively embraced within a company. They can make the topic a clear priority, embed it in strategy, corporate values, and leadership guidelines, and give it visibility in board meetings, communications, and budget decisions.
To achieve this, CEOs can take targeted actions:
- Actively seek feedback: Explicitly welcome critical questions and constructive discussions.
- Measure leadership by behavior: Evaluate managers not only on KPIs but also on how they handle people, stress, and conflicts.
- Establish clear structures: Implement regular listening sessions, safe points of contact for employees, and transparent rules around availability and workload.
- Provide external support: Offer digital mental health platforms like nilo, as well as one-on-one support from psychologists or coaches – low-threshold, confidential, and accessible to all.
These measures create an environment where employees can raise concerns early and where mental health is understood as a normal part of work – without fear, without stigma – with a strong positive impact on performance, retention, and innovation.
8. How can CEOs balance employee performance and well-being?
The balance is achieved when performance and health are not seen as opposites, but as two sides of the same coin. Studies show that companies with a mentally healthy culture and psychological safety are more productive, innovative, and experience lower turnover.
For company leadership, this means that performance must be supported by realistic resources, clear priorities, and structural relief.
Key levers include focused goal-setting, clear boundaries around working hours and availability, and a company culture that encourages openness, learning from mistakes, and constructive dissent.
9. How can CEOs achieve more with preventive mental health support without overloading their team?
CEOs who invest proactively in mental health can boost performance, stability, and focus – without adding extra burden to their team. Instead of addressing absences, conflicts, or burnout after they escalate, preventive measures identify risks early and help maintain consistent performance.
What preventive mental health support enables:
- Prevent declines before they occur: Early support through check-ins, access to counseling, or stress and focus training stops strain from turning into performance or team problems.
- Stabilize performance by building resilience: Targeted resilience-building – through training on managing uncertainty, prioritization, and recovery – ensures teams can deliver reliably even during periods of growth or change. The goal isn’t to make people “tougher”, but to empower them to handle pressure, mistakes, and setbacks without falling into chronic stress or stagnation.
- Develop high performers and leaders without overload: Individual coaching for managers and top performers allows CEOs to fully leverage their talent without overburdening the organization. Leaders learn to set ambitious goals clearly and realistically while fostering psychological safety. At the same time, high potentials receive tailored support in self-management, boundary-setting, focus, and organizational navigation – enabling them to perform at their best, sustainably without friction.
10. Why do change processes succeed faster and more stably when employees’ mental health is actively supported?
Organizational changes are almost always mentally demanding for employees: uncertainty, unclear roles, job-related fears, and increased time pressure all impact both mind and emotions – undermining focus, performance, and commitment.
Resilient employees, however, handle change differently. They are more likely to see new demands as challenges rather than threats, which strengthens flexibility, willingness to learn, and constructive behavior. Higher levels of well-being also improve concentration, problem-solving, and cooperation – skills that often determine success or stagnation during transformation phases.
When employees are actively supported during change – through transparent communication, genuine participation, and reliable support structures – anxiety and distrust decrease noticeably. Acceptance of change grows, employees take greater ownership, and they become active drivers of transformation.
How change is experienced also depends heavily on leadership behavior. Uncertainty, contradictory signals, or a lack of guidance significantly increase strain, whereas strong leadership reduces stress, prevents burnout, and provides stability.
11. Why traditional EAPs are no longer enough – and what CEOs really need to improve mental health
Traditional EAPs are reaching their limits in many companies. Usage is low because many employees either don’t know about the program or don’t trust it. Moreover, EAPs typically only take effect once problems have already escalated into crises. By that point, productivity losses, team dynamics, and sometimes even resignations are difficult to reverse. Structural limitations – limited sessions, long wait times, restricted personalization, and inconsistent quality – no longer meet the demands of modern, dynamic workplaces.
What CEOs need instead is a preventive, holistic EAP solution that is effective, trustworthy, and scalable. Platforms like nilo demonstrate what this entails:
High quality & real effectiveness: Access to qualified psychologists, scientifically backed tools, and consistent support rather than random quality.
Low-threshold access: Instantly and digitally available, without barriers or bureaucracy. Employees can get support before stress turns into a problem.
Full confidentiality: Transparent data protection and absolute assurance that personal matters stay private, which significantly increases usage.
Prevention plus one-on-one support: A combination of digital content, training, and personal counseling ensures early support and targeted strengthening of high performers.
Tailored to individual needs: Offerings that address diverse roles, stressors, and needs, rather than a “one-size-fits-none” approach.
12. Which evidence-based mental health measures and support should CEOs know about?
Successful companies rely on integrated bundles of measures that address both structural conditions and individual behavior.
Structural and organizational approached
- Regular employee surveys and pulse checks on workload, workplace climate, leadership, and mental health – followed by concrete measures based on the results
- Clear rules regarding working hours, breaks, availability, and task prioritization, as well as targeted process adjustments when overload is detected
- Leadership training on conversation skills, psychological safety, and mental health awareness
Individual support offerings for employees
- External Employee Assistance Programs (EAPs) or mental health platforms like nilo, offering one-on-one sessions with psychologists and digital content
- Evidence-based formats such as stress management and resilience training, mindfulness, coaching, or digital self-reflection tools
- Complementary initiatives like mental health days, flexible working models, and transparent communication about available support to increase engagement and usage
13. Which metrics can CEOs use to measure mental health?
Mental health cannot be measured directly – but there are indicators that provide insights into employee strain, the effectiveness of interventions, and economic impact:
- Absenteeism: Total days lost, with a focus on absences due to mental health conditions – tracking duration, trends, and anomalies in specific teams or departments
- Turnover: Resignations, internal transfers, and the costs of replacing employees.
- Engagement and employee satisfaction: Results from pulse surveys on workload, psychological safety, and work-life balance.
- Utilization of mental health support: The proportion of employees using psychological support services.
- Presenteeism: Estimated productivity loss despite attendance, due to reduced performance.
- Return on investment (ROI): Savings from reduced absenteeism and turnover relative to the cost of mental health initiatives.
14. How can CEOs maintain their own mental strength in a high-performance environment?
Even at the CEO level, mental health is a strategic success factor. Constant pressure can lead to poorer decisions and reduced performance over time.
Key levers for CEOs:
- Set clear boundaries: Scheduled recovery times, genuine vacations, and digital downtime in the evenings or on weekends significantly reduce the risk of burnout. Consciously separating work and private life also sets an example for the organization.
- Prioritize physical health: Sleep, exercise, and nutrition directly affect mental resilience, cognitive performance, and emotional stability.
- Establish routines for relief: Practices such as meditation, mindfulness, journaling, or structured reflection help process stress and build resilience.
- Use external support: Coaching, therapy, or group sessions can be especially helpful during demanding periods to stay resilient and develop new habits.
- Structure work effectively: Delegating consistently, setting clear priorities, and consciously avoiding tasks that don’t add real value makes CEOs more effective and reduces mental load.
