Cost of workplace mental health injuries up 80% in last three years¹

Allianz workers' compensation claims costs relating to mental health² – or primary psychological workers' compensation claims (refers to injuries caused by mental health complications of a work environment) – have increased by 80 per cent, rising an average of 22 per cent year-on-year, since 2017³. The findings are part of the new Allianz Future Thriving Workplaces (PDF, 2.3MB) report, which has also revealed an overwhelming 80 per cent of the Australian employees surveyed are now calling on their employers to take action to address mental health in the workplace.

The Allianz Future Thriving Workplaces findings illustrate the long-term impact mental health conditions can have on individuals’ holistic wellbeing. The report has found benefits paid to primary psychological injury claims are on average, up to four times higher per annum than for claims relating to physical injuries, and on average take far longer to recover from than physical injuries, with nearly 75 per cent of primary psychological claims experiencing time off work, compared to only 50 per cent of physical injuries⁴. SafeWork Australia data shows $543 million was paid in workers' compensation for work-related mental health conditions⁵, highlighting the scale of the issue and reinforcing the importance of employers proactively addressing employees’ mental health.

Expedited by COVID-19, one in two managers surveyed say they now feel an increased responsibility for their employees’ mental health at work, and almost one half of them (47%) think there is a stronger need for mental health initiatives in their industry. The Allianz Future Thriving Workplaces report also revealed some employers have already taken action by starting to implement programs during the COVID-19 pandemic, as six in ten Australian workers surveyed say their employers had already introduced mental health initiatives, and 55 per cent of managers state they or their organisation plans to implement mental health initiatives within the next 12 months.

Commenting on the findings, Julie Mitchell, Chief General Manager of Workers' Compensation at Allianz Australia says, “As employers, we’re unequivocally concerned about our employees’ wellbeing. We know that improved mental health in employees across all industries greatly benefits employers and their businesses. It positively impacts individuals’ productivity, talent retention and ultimately, business performance. Yet, the challenge now is to bridge the gap between awareness of mental ill-health in the workplace, and taking action. We can’t take a scatter-gun approach. The priority is addressing each individual’s wellbeing – as thriving employees will lead to positive team and business outcomes. Our actions need to be meaningful to employees, and embedded throughout all organisations.”

“Allianz is committed to empowering employers with the right knowledge, resources and initiatives to better support employees facing mental health issues. Especially as we sadly anticipate seeing a rise in workers' compensation psychological claims as a result of the COVID-19 pandemic, highlighting it’s even more important for Australian workplaces to implement the required changes to tackle these challenges now, and work to prevent them in the future. We believe that prioritising the wellbeing of employees, particularly the rising number of Australians experiencing mental health conditions, is key to building future, thriving workplaces,” she concluded.

The report has identified the leading pain-points employers need to tackle to drive positive change, as three quarters of Australian employees (76%) note there are factors preventing mental health initiatives from being implemented at their workplace. Stigma appears to be a key hurdle to overcome in addressing mental ill-health in the workplace, with four in ten surveyed employees (38%) feeling that mental health issues will not be taken as seriously as physical illnesses. However, a positive shift is underway – as this is a significant improvement from last year’s Allianz Awareness into Action report which found eight in ten (85%) believed that managers are more likely to think an employee’s need for time off is genuine if they say they are suffering from a cold or flu rather than stress or anxiety.

Allianz workers' compensation data has also revealed that work-related harassment and work pressure are the most prevalent causes of primary psychological claims⁶. According to the Allianz research, the most commonly reported workplace behaviours that employees claim to have negatively influenced their mental health are as follows:

• Ineffective or unfair management (39% of employees impacted)
• Workplace culture (33% of employees impacted)
• Bullying and harassment (24% of employees impacted)
  
• Organisational structure (24% of employees impacted)

To tackle stigma and negative behaviours, Australian employees feel the first step to mentally healthy workplaces is starting with conversation around mental health. Three in four Australian employees surveyed (75%) agree there must be more dialogue and discussion around mental health and wellbeing at work. Awareness days – such as Mental Health Awareness Month in October – can be a means of encouraging conversations and garnering advocacy to destigmatise mental ill-health – a key factor in implementing effective mental health programs for employees.

Matthew Johnstone, mental health expert and collaborator on the Allianz Future Thriving Workplaces report, says employers can work collaboratively with their employees to develop the right attitudes, resources and initiatives to best respond to their needs. “Employers don’t need to see mental health strategies as being difficult, box-ticking or costly to implement. Leaders can simply start with empathy, conversation, a good ear and a plan to properly address the emotional needs of their people. Once they have that mindset; job design, employee-employer relationships, work-life balance and collaborative workspaces, are key elements that businesses can improve on to help build a mentally healthy workplace. A company, after all, is only as good as the people who work for it. Invest in them and they will deliver returns far greater than just profit,” he said.

The Allianz Future Thriving Workplaces report explores the top causes of mental ill-health in the workplace, the top barriers employers and employees are facing, and what future mental health strategies may look like. Alongside the report, Allianz has released a range of resources to help employers – across all industries – to foster mentally, healthy workplaces – whether that be in-person or virtually. With the new ways of working in mind, the report has identified the five key areas employees would like to see improvement in:

• Built-in flex: 41 per cent would like flexible work options
• Extra time off: 38 per cent want additional paid leave, including mental health leave
• Proactive check-ins: 34 per cent would like more open conversation and employee check-ins
• Wellbeing programs: 33 per cent would like employers to introduce workplace wellbeing programs
• Awareness & Prevention training: 32 per cent are keen to see the introduction of mental health awareness training

1. Quantitative online survey (“Allianz research”): Allianz commissioned YouGov, a global public opinion and data company, to conduct an online survey of Australian workers and managers aged 18 years and over on their attitudes and responses to mental health in Australian workplaces in July 2020. A total of 1,005 workers and 501 managers completed the survey spanning various industries including both white and blue collar. The research investigated attitudes towards the causes of and methods of detecting mental health issues in the workplace, barriers to implementing mental health initiatives and whether the COVID-19 pandemic has impacted how organisations approach identifying and managing mental health in the workplace amongst both workers and managers/business owners.
2. Allianz Workers' Compensation data: Allianz Australia’s own data on incidence and cost of mental health in the workplace, relating to workers' compensation. The data has been taken from two separate data sets; Allianz Underwritten Data (UW) which covers workers' compensation claims across the privately underwritten states of Australia, and Insurance for NSW (IFN) data which primarily focuses on workers' compensation data from a subset of large Government departments in NSW.
   
3. SafeWork Australia: SafeWork Australia drives national policy development on WHS and workers’ compensation matters. They regularly collect, analyse and report on workers' compensation data and this is made publicly available on their website. The data they have provided on mental health claims have been referenced in the report.
   

• The large majority (80%) of Australian workers would like their employers to introduce resources or initiatives in the future to properly address mental health in the workplace. YouGov Future Thriving Workplaces Worker Research, Question 8 
• The most reported behaviours that workers claim have negatively influenced their mental health are ineffective or unfair management (39%), workplace culture (33%), bullying and harassment (24%), and organisational structure (24%). YouGov Future Thriving Workplaces Worker Research, Question 1 
• 50% of managers say that as a result of the COVID-19 crisis they now feel they have more responsibility for their employees’ mental health at work. YouGov Future Thriving Workplaces Manager Research, Question 5 
• 55% of managers say their organisation now plans to implement mental health initiatives within the next 12 months. YouGov Future Thriving Workplaces Manager Research, Question 6 
• 47% of managers think there is a stronger need for mental health initiatives in their industry. YouGov Future Thriving Workplaces Manager Research, Question 10 
• 38% of workers believe that mental health issues will not be taken as seriously as physical illnesses. YouGov Future Thriving Workplaces Worker Research, Question 10

• Of the reported workers' compensation claims in the past 4 years, Primary psychological claims account for 17% of all IFN claims and 5% of all UW claims respectively – Allianz Workers' Compensation Claims Data (2020) – Underwritten (UW) and Insurance for NSW (IFN) Business Units. 
• Primary psychological workers' compensation claims costs are accumulated faster and reach higher totals each year – Allianz Workers' Compensation Claims Data (2020) – Underwritten (UW) & Insurance for NSW (IFN) Business Units, combined 
• Allianz’s Insurance for NSW primary psychological claims are more likely to result in time off work (74 per cent versus 48 per cent in NSW) – Allianz Workers' Compensation Claims Data (2020) – Insurance for NSW (IFN) Business Unit
• Work related harassment and work pressure are the leading contributors to work related depression and anxiety, with these injury mechanism and nature combinations amounting to 6.56% of all IFN claims and 2.05% of all UW claims – Allianz Workers' Compensation Claims Data (2020) – Underwritten (UW) & Insurance for NSW (IFN) Business Units, combined 
• In terms of frequency as claims number per $10 million wages, employees in service industries such as the Retail sector are over twice as likely (0.098%) to claim for Work Related Harassment when compared to White Collar (0.044%) and Blue Collar, Medium Wage (0.04%) workers – Allianz Workers' Compensation Claims Data (2020) – Underwritten (UW) Business Unit

1. According to Allianz Workers' Compensation data, the total cost of active primary psychological claims across its Insurance for NSW (IFN) and Privately Underwritten (UW) portfolios increased, on average, by 80 per cent since 2017, on average 22 per cent per year
2. According to Allianz Workers' Compensation, workers' compensation psychological injury claims refers to injuries caused by mental health complications of a work environment
3. According to Allianz Workers' Compensation data, the total cost of active primary psychological claims across its Insurance for NSW (IFN) and Privately Underwritten (UW) portfolios increased, on average, by 80 per cent since 2017, on average 22 per cent per year
4. According to Allianz Workers' Compensation, across both of Allianz's Privately Underwritten (UW) and Allianz's Insurance for NSW (IFN) portfolios, primary and secondary psychological claims, on average, receive benefits for a longer duration relative to physical injuries primary psychological claims result in more time off work and take significantly longer to return to work than physical injuries, with roughly 75-80 per cent of primary psychological claims experiencing time off work, compared to only 50 per cent of physical injuries
5. www.safeworkaustralia.gov.au. (n.d.). Mental health | Safe Work Australia. [online] Available at: https://www.safeworkaustralia.gov.au/topic/mental-health#:~:text=7%2C200%20Australians%20are%20compensated%20for [Accessed Sep. 2020].
6. According to Allianz Workers' Compensation claims data covering Allianz's Privately Underwritten (UW) portfolio and Allianz's Insurance for NSW (IFN) portfolios. Further, service industries such as the retail sector in the UW portfolio claim twice as frequently as the result of work-related harassment compared to White and Blue Collar industry workforce.
7. YouGov Future Thriving Workplaces Worker Research, Question 8