How Business Decisions Affect Employee Mental Health

How Business Decisions Affect Employee Mental Health
Your employees will always be one of the most important resources your organization has. Without their skills, knowledge, and hard work, your business would undoubtedly collapse. This isn’t just from the perspective of day-to-day running, either. Empowering employees to make decisions that use their talents and perspectives that drive the positive trajectory of your company. But, have you ever thought about how business decisions affect employee mental health?

Business Decisions that Affect Employee Mental Healthmental health challenge

Aside from the clear ethical duties, this is one of the key reasons you must treat employee wellbeing as a priority. It may be the case you are confident you’re making efforts in this regard. But it can be easy to inadvertently overlook how some of your business decisions can wind up having a negative effect on employee mental health.

Let’s go through some of the health and safety elements you should be vigilant about in this regard. What types of mental knock-on effects can come from what you would consider to be purely commercial choices? How can you mitigate the potential harm to your workers?

Scheduling and Workload

As a business leader, you are naturally likely to have ambitions for your company. There is nothing wrong with this, and when opportunities come along to create growth, you grab them. However, the decisions you make to increase your company’s productivity can directly impact your workers’ ongoing mental wellness.

A poorly-planned response to new business often translates to increased workloads for workers. Companies have been known to adopt toxic “crunch” schedules to address this, rather than invest in additional workers. There is also a tendency for leaders to pass the pressure to perform and meet goals onto their workers.

This can understandably become overwhelming for employees. There often isn’t space in this type of workplace for employees to address and maintain their mental wellness. The outcome of this relentless pressure is a negative psychological impact on workers. It also reduces reduced productivity for businesses. There is also the danger of increased stress influencing poor sleep and exacerbating conditions like depression and chronic pain workers already live with. This in turn can develop into a damaging cycle that can be difficult to break without support.    

As such, it is vital you perform an honest assessment of your company’s ability to handle additional workloads. Don’t just consider the potential profits. Look at the value of investing in more workers rather than placing increased pressure on existing workers. It’s also important to get insights from your employees on what elements help to reduce stress and improve productivity during high-pressure periods. 

Compensation Provision

Payroll Policies

Having a proper compensation and benefits system is the foundation for incentivizing employee to achieve the company’s goals.

The compensation you provide workers is likely most often treated from a strategic business perspective. The primary considerations here often revolve around how salaries impact company finances. You might also look at whether they are comparable to those paid by competitors. However, when making decisions here you also need to look at what aspects impact your workers’ mental wellbeing. 

At the most basic level, paying your employees fairly helps them to maintain a good standard of living. When businesses choose to pay as low as they can get away with or fail to provide regular raises, this lifestyle is directly affected. Struggling to make ends meet or not being able to put money away for savings and vacations places strain on workers.

This can become a daily source of stress, which has a cumulative impact on workers’ mental health. From a business perspective, this is problematic too, with one report finding financial stress lowers employees’ performance. This poor mental health can lead to increased absenteeism and create an added turnover. 

But it’s important to remember it isn’t just your rate of wages that has an impact. Even if you can’t reach the higher levels of pay, your choice of benefits can have a positive effect on workers’ wellbeing. Paid time off gives your workers vital opportunities to recharge without having to decide between getting paid and getting rest. Retirement plan contributions reduce the burden and pressure related to ensuring their long-term financial stability. 

Offering comprehensive health insurance can also give employees great tools and help improve employee relations. When people have access to in-person or online therapy there are opportunities to better manage their mental health and mitigate associated physical health problems. This includes reduction of fatigue experienced during depression spells and a long-term boost to their immune system.   

Company CultureWorkplace Stress

Your business is likely to be the space in which your workers spend the majority of their waking hours in the workplace. As such, the cultural aspects of your company can have a direct contribution to the richness of a significant portion of their lives. The decisions you make in respect of this culture can therefore affect their mental wellbeing. 

This begins with your commitment to equality and diversity in your organization. It is not enough to have a passive approach to cultivating inclusion in your company. When employees from traditionally marginalized groups see there isn’t a good effort to attract and retain greater representation, this sends a message the company doesn’t value contributions from people like them. In turn, this can detrimentally inform your workers’ mental and emotional wellbeing. It can also create feelings of isolation and reinforce their experiences of cultural biases. It’s vital you act to combat this.  

This should extend to providing sponsorship and support for education for workers that may not otherwise have had access to it. Helping workers pursue degree programs geared toward business leadership skills can empower them to continue a positive career trajectory. It also has the added benefits of growing their professional network and providing new perspectives. Alongside the boost to their self-esteem, it can benefit your business by improving retention and expertise, which in turn can influence innovation.

Business Decisions Affect Employee Mental Health

The decisions you make on behalf of your business influence your employee’s activities and also their mental wellness. A rise in workloads can increase pressure and stress, while insufficient compensation can create tension in their daily lives. The culture of your company is also vital in making workers feel included and supported, reduce employee stress, and boost productivity. As a leader, you need to keep the impact on your employees’ mental health in mind when making key choices. Not only is this an ethical duty, it can also have positive commercial outcomes for your company.


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