When introducing mental health benefits, the same question almost always comes up in budget discussions: Is it really worth it?
The short answer: Yes – even measurably.
The longer answer is more complex. Mental health challenges cause significant, often hidden costs. At the same time, studies show that investing in mental health clearly pays off financially – and that not investing comes at a high cost.
A look at recent trends highlights the scale: In Germany, sick days due to mental health conditions have increased by 47% over the past ten years. Presenteeism – reduced performance despite being at work – causes trillions in global productivity losses, according to the World Health Organization.
At the same time, international studies show that every euro invested in mental health delivers a fivefold return through reduced absenteeism, higher productivity, and better employee retention.So the key question is no longer whether companies should invest, but what it costs them if they don’t.
In this article, we’ll explore:
- the costs companies face when they don’t invest in employee mental health
- how to calculate the return on investment (ROI) in concrete terms
- what HR should consider when selecting the right mental health solution
What costs arise if I don’t invest in my employees’ mental health?
Mental health conditions are among the biggest economic risk factors worldwide. According to estimates by the World Health Organization, around 12 billion workdays are lost each year due to depression and anxiety disorders, resulting in global productivity losses of approximately one trillion US dollars.
These figures may seem abstract – until you break them down to your own organization. At the company level, three key cost drivers stand out when mental health is not proactively supported:
1. Productivity loss and presenteeism: Performance often declines gradually. Employees are present but mentally exhausted, unfocused, or disengaged. This “hidden” productivity loss is often not visible in traditional KPIs, yet it is one of the most expensive consequences of chronic overload.
2. Absenteeism and sick leave: Mental health challenges frequently lead to longer periods of absence. Unlike many physical conditions, these absences often last several weeks.
3. Turnover and burnout-related resignations: Ongoing overload without support often leads to disengagement – or actual resignation. Beyond recruitment and onboarding costs, companies also lose valuable knowledge, customer relationships, and team stability.
Cost factor 1: Absenteeism
Recent statistics on sick days clearly show how significantly mental health conditions now impact organizations.
According to an AXA study, 27% of all sick leaves in Europe in 2024 were due to mental health reasons. In France, they are now the leading cause of long-term sick leave.
The trend in Germany is just as clear. Current data from KKH (2024) shows:
- 107.3 sick days per 1,000 emplyoees due to burnout – an increase of 33% compared to 2019
- 46% more burnout-related sick leave cases (4.2 cases per 1,000 employees)
- an average of 25.7 sick days per burnout case – more than a full working month
In addition, data from the DAK report shows that mental health conditions are contributing more and more to work incapacity in Germany. They consistently rank amongst the most common causes of long-term absences, driving up the average number of sick days overall.
These figures highlight that absenteeism is not just a health issue, it is a signal of structural strain, and therefore a clear economic factor.
Cost factor 2: Turnover
Empirical data shows just how strongly mental strain influences employees’ willingness to leave: A study published in the European Economic Letters journal found that burnout doubles the likelihood of leaving company within a year.
Mental health and turnover are closely linked:
- One in two full-time employees has already left a job due to their mental health
- Among Gen Z, this rises to 81%, and 68% among Millennials
At the same time, the Gallup Engagement Index 2024 paints an alarming picture of emotional commitment in German companies:
- Only 9% of employees feel a strong emotional connection to their employer – a historic low
- 78% are doing the bare minimum
- 13% have already mentally checked out
The economic consequences are significant. Gallup estimates the resulting productivity losses at €113 to €135 billion per year in Germany. On top of that, unhappy employees are almost three times more likely to consider leaving than happy ones (79% vs. 29%).
For companies, this has two major implications: Direct costs increase due to recruitment, onboarding, and knowledge loss. At the same time, innovation and execution speed decline – especially during periods of growth or transformation.
At the same time, there is a clear lever: organizations that actively invest in mental health initiatives can reduce turnover by up to 60%.
Cost factor 3: Productivity
Productivity is often viewed in isolation – as result of processes, tools, or target setting. However, mental well-being plays a central role in performance, creativity, and innovation.
Findings from creativity and workplace research show that mentally resilient employees not only handle complex tasks more efficiently, but also contribute new ideas more frequently.
On the flip side, the economic impact of dissatisfaction is clearly measurable:
- Unhappy employees generate 28% less revenue
- In the long term, this leads to an 18% decline in productivity
- In publicly listed companies, this effect can even result in a drop in share prices of up to 65%
In contrast, strong mental health brings clear advantages: 63% of employees with stable mental well-being describe themselves as highly productive, and 80% feel energized and capable of performing at their best. Mental health therefore impact not only absenteeism and turnover, but also the day-to-day value creation within a company.
nilo in practice: Productivity gains through targeted support
The impact of targeted measures is clearly illustrated by usage of the nilo platform:
- Employees who regularly engage with nilo’s digital content are 15.3% more likely to be more productive
- 47.2% of participants in 1:1 session report increased productivity
- The combination of digital content and 1:1 sessions shows the strongest effect – productivity increases by 50.3%
How do I calculate ROI?
The general ROI formula
Return on Investment (ROI) is one of the simplest and most effective metrics for evaluating profitability. The basic formula is:
ROI = (profit ÷ investment) x 100
In the context of mental health, however, “profit” consists of cost savings or avoided costs. Every reduced presence, prevented resignation, and avoided productivity loss effectively acts as a financial gain for the company.
In other words, the economic benefit comes not only from increased revenue, but also from costs that are no longer incurred.
The nilo ROI calculator
The nilo business ROI calculator quantifies the financial impact of poor mental health across three key areas:
- Sick days (absenteeism): Employees experiencing mental strain are absent more often and for longer periods. The model uses industry benchmarks for sick days and assumes that around 17% are due to mental health conditions. Each of these days generates direct costs based on the employee’s daily salary.
- Presenteeism: Often even more costly than absenteeism is reduced performance while being present at work. Presenteeism can generate up to twice the cost of absenteeism, as employees are working but not af full capacity.
- Employee turnover: A portion of unplanned departures is linked to mental overload. Replacing an employee costs 1.5 to 2.5 times the annual salary, depending on the role. This includes not only recruiting and onboarding, but also knowledge loss and productivity gaps.
Once the total cost of poor mental health is calculated, it is compared against the investment in nilo.
The formula is: ROI = cost savings generated by nilo ÷ nilo investment
Concrete example: Company with 500 employees
Let’s assume a company has 500 employees with an average annual salary of €55,000.
Starting data
- Employees: 500
- Average salary: €55,000
- Average daily salary: €55,000 ÷ 240 working days
- Sick days: 22 days/year
- Mental health-related sick days: 3.74 days per employee
- Presenteeism days: 7.48 days per employee
- Annual turnover: 7% (35 persons)
- Example nilo package costs: €10 per employee per month
Step 1: Total cost of poor mental health
Sick days
500 employees × 3.74 mental health-related sick days × €229 daily salary ≈ €428,200
Presenteeism
Roughly twice as high ≈ €866,400
Turnover
35 people leaving × 1.5 × €55,000 ≈ €2,887,500
(replacement costs: 1.5 to 2.5 times annual salary)
Total annual cost: approx. ≈ €4,172,000/year
Step 2: nilo investment
€10 × 500 employees × 12 months = €50,000 per year
Step 3: Savings (18 % utilization)
Sick days
90 nilo users × 3.74 × €229 ≈ €77,000
Presenteeism
90 × 7.48 × €229 ≈ €154,200
Turnover
90 × 7 % × 15 % × 1.5 × €55,000 ≈ €78,000
(Assumption: 15% would stay with the company if their mental health were supported, replacement costs: 1.5)
Total ≈ €309,200 per year
Step 4: ROI
€309,200 in savings ÷ €50,000 investment ≈ 9 x ROI
This means: for every euro invested, around €9 flows back through fewer sick days, lower turnover, and higher productivity.
One additional way to look at it makes the scale even clearer: preventing just two to three burnout cases per year is enough to fully pay back the investment.
What should I consider when investing in a mental health benefit?
Not every mental health support offering automatically delivers real impact. What matters is not just whether companies invest – but how. To ensure that a mental health benefit truly drives measurable results, organizations should evaluate a few key criteria.
Criteria for selecting a high-quality mental health benefit
1. Qualified psychological support
The core of any offering is the quality of professional support. The following questions help with evaluation:
- Is there access to qualified psychologists?
- Are sessions long enough to allow for real depth?
- Is the service available in all relevant languages of your team?
2. Low-barrier access
A benefit only works if it’s actually used. Technical barriers or complex onboarding processes significantly reduce adoption.
Key factors include:
- Easy and straightforward access
- Availability on both mobile and desktop
- Fast appointment booking without long waiting times
The easier the access, the more likely employees are to use the support early and preventively. When evaluating providers, it’s worth asking about their average usage rate.
3. Formats for different needs
Different needs require different formats. A modern solution should combine multiple offerings. For example, nilo includes:
- 1:1 sessions
- Group discussions or roundtables
- Meditations and mindfulness exercises
- Self-guided digital programs
- Dedicated support for leaders
4. Prevention
An effective solution doesn’t start only in times of crisis. Preventive modules on topics like stress management, self-esteem, and resilience are essential to address challenges early.
5. Data-driven insights and employee data protection
HR and leadership should receive aggregated, anonymized insights into usage and impact:
- Is there a dashboard with data-driven insights into team mental health?
- Can trends be identified without compromising individual confidentiality?
- Are data privacy and confidentiality guaranteed for all employees?
1. Qualified psychological support
The core of any offering is the quality of professional support. The following questions help with evaluation:
- Is there access to qualified psychologists?
- Are sessions long enough to allow for real depth?
- Is the service available in all relevant languages of your team?
2. Low-barrier access
A benefit only works if it’s actually used. Technical barriers or complex onboarding processes significantly reduce adoption.
Key factors include:
- Easy and straightforward access
- Availability on both mobile and desktop
- Fast appointment booking without long waiting times
The easier the access, the more likely employees are to use the support early and preventively. When evaluating providers, it’s worth asking about their average usage rate.
3. Formats for different needs
Different needs require different formats. A modern solution should combine multiple offerings. For example, nilo includes:
- 1:1 sessions
- Group discussions or roundtables
- Meditations and mindfulness exercises
- Self-guided digital programs
- Dedicated support for leaders
Unterschiedliche Bedürfnisse erfordern unterschiedliche Angebote. Ein modernes Unterstützungsangebot sollte mehrere Formate kombinieren. Bei nilo sind das beispielsweise:
- 1:1-Sitzungen
- Gruppendiskussionen oder Roundtables
- Meditationen und Achtsamkeitsübungen
- Selbstgeführte digitale Programme
- Dedizierte Angebote für Führungskräfte
4. Prevention
An effective solution doesn’t start only in times of crisis. Preventive modules on topics like stress management, self-esteem, and resilience are essential to address challenges early.
5. Data-driven insights and employee data protection
HR and leadership should receive aggregated, anonymized insights into usage and impact:
- Is there a dashboard with data-driven insights into team mental health?
- Can trends be identified without compromising individual confidentiality?
- Are data privacy and confidentiality guaranteed for all employees?
Usage drives impact
Even the best platform is ineffective if it’s not used. Studies and internal data clearly show: the economic impact increases with higher usage rates.
That’s why the rollout of a mental health solution should always be well planned and actively supported. A strong workplace mental health provider should offer the following services:
- Clear communication to the entire team, including through leadership
- Active destigmatization of mental health in the workplace
- Tailored communication solutions when needed
- Regular reminders via company communication and integration into existing HR processes (e.g. onboarding)
Mental health is not a one-off initiative. Rather, it’s part of a sustainable company culture. Only when offerings are visible, accessible, and accepted does the real leverage emerge – reflected in measurable ROI.
How do I measure the success of mental health initiatives within a team?
Mental health in the workplace cannot be captured in a single metric, unlike the usage of a support offering. However, there are measurable indicators that provide insights into levels of strain, effectiveness, and economic impact.
1. Absenteeism
A key indicator is absenteeism, especially the number and duration of health-related sick days. It’s important to look beyond overall figures and consider:
- Trends over multiple quarters
- Patterns within specific teams or departments
- Changes after introducing a mental health support offering
If mental health-related absences decrease or their duration shortens, this is a strong sign of effective relief and support.
2. Turnover and employee retention
Resignations and internal transfers can indicate structural strain. If turnover increases in specific areas, it may signal overload, lack of support, or weak employee retention. It’s also valuable to ask targeted questions about reasons for leaving during exit interviews.
Beyond the number of departures, companies should also consider the cost per replacement. If turnover decreases after introducing targeted measures, this has a direct positive impact on business performance.
3. Engagement and employee satisfaction
Regular pulse survey help identify changes early. Particularly relevant are questions about:
- Perceived workload
- Psychological safety
- Leadership behavior
- Work-life balance
- Overall satisfaction
If these metrics improve over time, it indicates a positive impact, even if hard KPIs like absenteeism take longer to reflect change.
4. Usage of the offering
The usage of mental health support services is a direct indicator of relevance and acceptance. Key metrics include:
- The percentage of employees using psychological support
- Changes in usage rates over time
- Usage across different formats (e.g., 1:1 sessions, digital programs, group sessions)
Increasing or consistently high usage signals trust in the offering. Low usage, on the other hand, may indicate communication or access barriers.
Combining quantitative data with qualitative feedback
Metrics alone don’t tell the full story. Subjective insights, such as user feedback, short survey, or open comments, provide important context on the actual impact.
Only by combining hard HR data, usage rates, and perceived improvements can you arrive at a well-founded evaluation.
Gain insights into your team’s well-being with the nilo HR dashboard
