Proactive mental health strategies help Canadian employers cut costs and keep teams performing strong
Burnout and mental health-related disability claims are quietly driving up costs and eroding productivity in Canadian workplaces, with nearly 39 percent of employees now reporting they feel burnt out—a sharp rise from last year.
“Burnout is not just a personal issue—it’s a workplace issue with a price tag,” said Mary Ann Baynton, director of Collaboration and Strategy, from Canada Life’s Workplace Strategies for Mental Health.
She emphasized that when organizations invest in prevention, they not only protect their people but also safeguard their bottom line.
Canada Life's Cost of Inaction (COI) Report finds that burnout-related productivity losses and salary costs can exceed $3.4 million annually for a company with 500 employees.
By contrast, organizations that prioritize burnout prevention can save approximately $1.7m per year.
Disability claims linked to mental health have steadily increased over the past decade.
In 2024, 27 percent of all short-term disability claims and 37 percent of long-term disability claims were related to mental health—both up significantly from a decade ago.
Mental illness now accounts for roughly 30 percent of disability claims but drives 70 percent of workplace disability costs.
These claims are often more complex and costly to manage, frequently requiring longer recovery periods, specialized treatment, and ongoing care.
The financial impact is compounded by the operational challenges: increased absenteeism, presenteeism, and reduced productivity.
Absenteeism and presenteeism alone cost Canadian employers $645m annually.
Employees struggling with mental health may face difficulties with performance, absenteeism, and accessing support, which can ripple through teams and affect overall workplace morale.
Despite growing awareness, only one in three Canadian employers have a mental health strategy in place—and many do not measure its effectiveness.
Yet, the return on investment is clear.
Businesses with mental health programs experienced a $1.62 return for every $1 spent, rising to $2.18 after three years. Employees who feel supported are three times more likely to stay and recommend their workplace to others.
Stigma and access to care remain significant barriers.
Sixty percent of individuals with mental health conditions avoid accessing support due to fear of being labelled, and the average wait time to see a mental health specialist exceeds 14 weeks. These hurdles can prolong absences and complicate return-to-work efforts.
Effective strategies are available.
Organizations that implement comprehensive mental health initiatives—such as psychological safety training, flexible work arrangements, and robust disability management processes—see reduced absenteeism, lower disability claims, and improved retention.
“This year’s findings underscore the urgent need for Canadian workplaces to move beyond awareness and into action,” said Michael Cooper, vice president, Mental Health Research Canada.
He noted that with nearly 40 percent of employees reporting burnout and over half facing mental health challenges that affect their work, the cost of inaction remains significant.
