HR managers have long been aware of the difference that targeted mental health programs can make. But before such a benefit can be introduced, the inevitable question always arises: “Do we have the budget for it?”
Because no matter how compelling the idea may be, without the support of senior management, it remains just an idea. And this is precisely where many companies run into trouble — often because they lack the right arguments. Arguments that not only highlight the benefits for employees but also clearly demonstrate the concrete impact on the company’s financial success.
This article delivers exactly that: the data that decision-makers take seriously — and that turns a mental health benefit into a strategic investment.
Argument 1: The Business Case
There is a persistent misconception among many company executives: mental health programs are a nice perk for employees — but not a real investment in the company’s success. Yet current figures paint a different picture:
- Absences due to mental health issues have risen by 47% in Germany over the past ten years (AOK Absenteeism Report)
- Presenteeism—when employees are physically present but not truly productive—leads to significant losses in productivity and is a major, though often hidden, cost factor for companies
- According to the Gallup Engagement Index, voluntary resignations cost the German economy more than 119 billion euros
- On average, every euro invested yields a return of nearly five times the initial investment—through reduced absenteeism, increased productivity, and improved employee retention
The real question for management, therefore, is not, “Should we invest in mental health?” but rather, “What will it cost us if we don’t?”
This shift changes the entire discussion. Failing to invest in employees’ mental health thus becomes a costly risk factor.
Argument 2: Mental Health and Its Impact on Business KPIs
To truly convince management and decision-makers, the impact on the company’s success must be demonstrated using concrete metrics. The following metrics typically have the greatest impact:
- Absenteeism & Sick Leave
- Turnover & Recruitment
- Productivity
- Corporate Culture, Engagement, and Employee Motivation
| KPI | What is measured? | Why is it relevant? |
|---|---|---|
| Absences due to mental health issues | Number and duration of absences due to mental health issues | Direct cost drivers resulting from continued pay and the cost of finding replacements |
| Turnover rate | Percentage of voluntary resignations – total and by team | High turnover results in recruiting and onboarding costs of up to 200% of annual salary |
| Employee satisfaction | Results from regular surveys on well-being and workload | Identifies areas where action is needed early on—before absences or resignations occur |
| Engagement & eNPS | Emotional connection and motivation | Low scores indicate a lack of commitment and declining productivity |
| Presenteeism | Self-assessment of performance despite being present | Often a bigger cost factor than absenteeism—yet it remains invisible in traditional KPIs |
| Utilization rate of mental health services | Percentage of employees who actively use the program | Demonstrates trust and acceptance and is essential for the program's effectiveness |
Absences & Sick Leave
Mental health conditions have not only become more common, they also last significantly longer: on average, they lead to 33 Absence Days – three times as long as a typical sick leave. In 2024, 26% of full- and part-time employees in Germany took sick leave at least once due to mental health issues, and mental illness consistently ranks among the most common reasons for long-term sick leave, with an upward trend.
This results in high costs: Longer absences mean more continued pay, more effort to cover tasks within the team, and more pressure on the remaining employees.
For HR, this is a clear case to make to management: Companies that invest early in building resilience and implementing preventive measures can avoid a significant portion of these costs. And programs that support employees during periods of acute stress also pay off — they help prevent absences or at least significantly reduce their duration.
To-do for HR: Analyze the trend in mental health-related absences (F-codes) over the past 2–3 years and compare them with the industry average.
Employee Turnover & Recruitment
Mental stress doesn’t just lead to sick leave — it also drives people to leave the company. Burnout doubles the likelihood of resignation within a year. And the numbers speak for themselves:
- One in two full-time workers has quit their job at least once due to mental stress
- Among Generation Z, this figure stands at 81%; among millennials, it is 68%
- Mental health benefits reduce employee turnover by up to 60%
- 85% of job applicants consider mental health support services to be an important factor in a company’s appeal
Added to this is a generational shift that companies cannot ignore: According to a Zenjob survey, more than half of young employees actively prioritize their well-being—and expect employers not only to understand this but also to provide concrete support. For this generation, mental health benefits are clearly a deciding factor when choosing an employer.
To-do for HR: Review the turnover rate for the past 12 months — broken down by team and reason for resignation based on exit interviews (How many employees cite mental health issues as their reason for leaving?).
Productivity
Many companies still underestimate the role of mental health as a factor in productivity — even though the connection is obvious. Mental stress impairs our performance, and employees with low resilience reach their limits more quickly during challenging times. Employees with high levels of well-being, on the other hand, are more productive and take fewer sick days.
An analysis of the nilo platform demonstrates just how effective targeted measures can be:
- Employees who regularly use digital content report increased productivity 15.3% more often
- For employees who participate in one-on-one sessions with psychologists, the figure was as high as 47.2%
- The combination of both has the greatest impact: 50.3% report noticeable increases in productivity
To-do for HR: Conduct a quick survey on perceived team performance and use the results as a baseline for measuring success later on.
Corporate Culture, Commitment, and Employee Motivation
A strong corporate culture has a measurable impact on business success: Companies with a healthy culture generate four times higher revenue, and 72% of employees would be willing to trade part of their salary for greater job satisfaction — which shows just how important purpose and well-being have become in the workplace. And yet only 10% of employees in Germany feel emotionally connected to their company.
Culture and mental health are closely intertwined. Employees who are thriving are not only less likely to take sick leave—they are also more engaged, motivated, and willing to go the extra mile. A targeted mental health program lays the groundwork for this: an environment where psychological safety thrives, mistakes are openly addressed, and employees are motivated to do their best.
To-do for HR: Retrieve the latest eNPS and engagement scores and compare them with last year’s figures — are there any areas with notable outliers?
Argument 3: Mental Health During Crises and Times of Change
It is precisely during periods of transformation that employees’ mental well-being tends to fall by the wayside. Yet the mental resilience of the workforce is the foundation for a company’s success in times of change.
This is because change processes can be exceptionally stressful for many employees:
- In a survey conducted by the ias Group, 40% of executives say that the mental strain on employees is increasing due to constant change processes
- In restructured companies, employees are more likely to suffer from exhaustion, headaches, nervousness, and sleep disturbances, and are more likely to feel down.
The argument for management here is: now more than ever. Whether a change process is truly successful can be measured by two factors, both of which depend directly on the team’s mental health:
- Operational success – measured by milestones, key performance indicators, and speed of implementation. Employees who are mentally stressed work more slowly, make more mistakes, and are absent more often.
- Cultural success – measured by acceptance, engagement, and team morale. Sentiment analysis of employee feedback, leadership quality as an indicator of clarity within the team, and mental health scores reveal whether changes are truly supported or whether psychological resistance is hindering implementation.
A change process can only be sustainably successful if both dimensions are addressed. Companies that actively integrate mental health into their change processes create precisely this foundation and can grow through challenges rather than fail because of them.
Argument 4: Employers have a legal responsibility
One of the strongest arguments HR can make for mental health in the workplace? It is one of the legal obligations of employers:
- EU Framework Directive 89/391/EEC: All health risks—including psychosocial stressors such as stress, work overload, or workplace bullying—must be assessed with a view to prevention and minimized through appropriate measures.
- Section 5 subsection (3) of the Occupational Safety and Health Act: Since 2013, the assessment of psychological stress has been explicitly required by law in Germany—starting with the very first employee. Stress factors must be systematically documented, evaluated, and regularly reviewed, particularly in the event of organizational changes.
Companies that neglect this risk not only legal consequences but also damage to their reputation—especially in a job market where an employer’s appeal is increasingly measured by such issues.
What steps can be taken to improve mental health, and what should you keep in mind?
Once management is on board, the next question is: Which solution is right for us? The good news is that there is a wide range of options. These solutions can be broadly divided into three categories — and the mix may vary depending on the company’s size, culture, and specific needs.
Structural Measures
- Clear guidelines on working hours, availability, and prioritization
- Flexible work arrangements: flex time, remote work, temporary reduction in hours, or adjustment of responsibilities during periods of high workload
- The option to attend therapy or doctor’s appointments during work hours
- Psychological risk assessment as the basis for targeted measures
- Regular pulse surveys and engagement monitoring
Support Services for Employees
- A modern EAP or digital mental health platform like nilo, offering one-on-one sessions with psychologists, digital content, and self-guided tools — accessible, anonymous, and preventive
- Evidence-based programs such as stress management and resilience training, mindfulness programs, or coaching
- Interactive online courses on topics such as sleep, emotion regulation, or stress management, for example via platforms like nilo
- Virtual group formats: peer support groups, moderated roundtables, or digital self-help groups
- Health Days and flexible time-off models for targeted recovery
Leadership & Culture
- Training for managers on communication skills, early detection of stress, psychological safety within the team, and building personal resilience
- Transparent communication about available support services to actively encourage their use
- Mental health first aid courses in which managers learn to recognize the signs of mental distress and respond appropriately in a crisis.
Experience shows that a combination of structural measures, individualized support services, and targeted leadership development is most effective. Individual measures may provide short-term relief, but lasting change only occurs when all three levels work together and mental health is recognized as an integral part of the corporate culture.
What to Look for When Making a Choice
Not every program delivers on its promises. Effective mental health programs are characterized by four key features:
- Evidence-based methods: Effective programs rely on well-established approaches such as cognitive behavioral therapy (CBT), structured problem-solving training, or psychologically guided group sessions—all delivered by qualified professionals.
- Structural integration: Mental health should be part of an overarching health strategy — with clear processes, responsibilities, and interfaces with workplace health management and company physicians.
- Combination of individual and structural approaches: Programs that rely solely on personal resilience fall short. Effective approaches combine individual support with structural levers at the level of working conditions and leadership.
- Confidentiality and continuous promotion: Trust is the basic prerequisite for utilization. Data protection must be guaranteed — and the program must be actively promoted so that it does not end up unused in a drawer.
How can I measure the effectiveness of mental health support services?
Once the budget has been approved and the mental health initiative has been implemented, the continued investment must still be justified. To ensure that mental health remains a permanent fixture in the company, clear monitoring is needed to demonstrate the impact of the investment.
The most relevant KPIs can be divided into three categories:
Health & Absenteeism
- Total sick leave and absences due to mental health issues over a specific period
- Duration of absences
If the number and duration of absences decrease after the implementation of targeted measures, this indicates that the early intervention was effective.
Employee Retention & Engagement
- Turnover rate
- Engagement scores and eNPS from regular pulse surveys
- Insights from exit interviews regarding mental health issues as a reason for resignation
Usage & ROI
- Utilization Rate of Mental Health Services – A Rising Rate Indicates Trust and Acceptance
- ROI Calculation: Cost Savings from Reduced Absenteeism and Lower Turnover vs. Investment Costs
The ROI can be quantified more precisely than many people expect. Preventing just two or three cases of burnout per year is often enough to fully recoup the investment in a mental health program. It is important to combine quantitative data—that is, hard HR metrics—with qualitative feedback from the team. Only together do they provide a complete picture.
Conclusion
Mental health in the workplace is an issue that management may not always immediately embrace. HR can address this with clear facts, as the arguments are compelling: rising absenteeism, high turnover costs, measurable losses in productivity, legal obligations—and a return on investment that can be quantified.
This shows management that investing in mental health is not only good for employees, but also for the company’s success.
Frequently Asked Questions (FAQ)
-
How can I convince C-level executives and management that mental health in the workplace is important?
-
The most effective approach is to shift perspectives: away from the welfare argument and toward the business case. Concrete figures on absenteeism, turnover, and lost productivity make it clear what mental health issues actually cost the company and that failing to invest in employees’ mental health is detrimental to the company. It is also helpful to consider the legal dimension: assessing the risks of mental stress is required by law.
-
Which business KPIs are influenced by mental health?
-
Mental health impacts a range of metrics that directly affect decision-makers: sick leave and absences due to mental health issues, turnover rates and the associated recruiting costs, engagement and eNPS scores, as well as productivity metrics. Presenteeism—when employees are physically present but not performing at their best—is also a relevant, albeit difficult-to-measure, factor. Companies with targeted initiatives for employee mental health demonstrably perform better in all these areas.
-
How does poor mental health in the workplace affect a company’s success?
-
The consequences are multifaceted. Chronic burnout leads to longer periods of sick leave, declining productivity, and higher employee turnover. Employees who do not feel supported are more likely to quit—or to stay and perform well below their potential. Added to this are damage to the company’s reputation as an employer and a gradual deterioration of the corporate culture. In short: Poor mental health is not a soft issue, but a tangible risk factor for business success.
