
Companies are facing an overwhelming trend of employees struggling with mental health challenges in the workplace, which ultimately impacts both the quality and efficiency of deliverables. By 2040, the U.S. will spend an estimated $252.3 billion due to productivity loss caused by mental health inequities. While the conversation around workplace mental health has evolved significantly, many companies continue to underinvest in supporting their employees, leading to substantial operational and financial risks organizations can no longer ignore.
Assessing the Financial and Operational Impact
Healthcare costs for employees facing mental health challenges are often several times higher than those of the general workforce, and research consistently shows that untreated mental health issues are directly linked to declines in productivity, attendance, and retention.
Employee turnover related to unaddressed mental health concerns creates a cascade of significant costs. These include direct expenses for recruitment and training, productivity losses during transition periods, and long-term impacts on team morale and organizational knowledge retention.
Moreover, many organizations overlook the hidden costs of presenteeism—where employees are physically present but unable to perform at full capacity due to mental health struggles. According to Harvard Business Review, the cost of employees working while struggling with mental health challenges can reach up to $150 billion annually.
When organizations delay investing in comprehensive mental health support, they face escalating financial, operational, and cultural challenges. As untreated conditions worsen, both the severity of the issues and the cost of treatment rise, leading to a cycle of higher healthcare expenses and longer absenteeism. Not to mention the short and long-term disability costs incurred by the employer for a large portion of this employee population.
The consequences of inadequate mental health support ripple throughout the organization. As employees take on extra workloads to cover for struggling colleagues, they too become stressed and overwhelmed, perpetuating a cycle of mental health challenges. Over time, this pattern damages workplace culture, undermines collaboration, and weakens the organization’s resilience.
Traditional Workplace Mental Health Support
Many organizations continue to rely on outdated mental health care that falls short of addressing the complex and evolving needs of today’s workforce. Traditional approaches, such as basic health insurance plans and Employee Assistance Programs (EAPs), offer a foundational level of support but often fail to meet the increasing demands for comprehensive mental health care. These programs typically provide only limited access to counseling or short-term therapy sessions, which are insufficient for employees facing moderate to severe or treatment-resistant mental health conditions.
Employees dealing with treatment-resistant conditions, like depression or PTSD, require more than the basic services provided by EAPs. These conditions often require specialized, continuous care that can be difficult to navigate within traditional frameworks. Without proper support, these conditions tend to escalate over time, resulting in a cycle of deteriorating employee well-being and rising healthcare costs for employers.
A Path Forward
Organizations must re-evaluate their mental health support models to ensure they meet their employees' diverse and complex needs. Offering expanded, specialized, and cost-effective care solutions is essential for promoting individual well-being and organizational success.
Emerging treatments, like IV ketamine, Spravato, and transcranial magnetic stimulation, have gained attention as an effective solution for treatment-resistant mental health conditions that reduce overall healthcare costs. By integrating these treatments into employee wellness programs, companies can help their employees effectively manage and overcome mental health challenges, which can otherwise hinder performance, productivity, and job satisfaction.
This proactive approach to mental health not only boosts the individual employee's quality of life but also translates into measurable financial benefits for the company. The average cost of employer-sponsored health plans will increase by more than 9% in 2025 according to Aon. Offering solutions for high-risk, high-cost employees like those struggling with TRD can play a vital role in reversing this financial burden.
Considerations for HR Leaders
The implications of inaction on employee mental health extend far beyond immediate financial costs. Organizations that neglect comprehensive mental health support risk eroding their competitive advantage through decreased productivity, higher turnover, and diminished brand value. By recognizing mental health support as a strategic imperative rather than an optional benefit, organizations can better position themselves for sustained success.
Addressing workplace mental health challenges requires a shift from reactive to proactive approaches, supported by sustained investment in comprehensive care solutions—and HR leaders are uniquely positioned to drive this transformation. By championing comprehensive mental health initiatives and demonstrating their strategic value, HR professionals can help their organizations build more resilient, productive, and sustainable workplaces.

Marcus Capone is the Co-Founder and CEO of TARA Mind, whose mission is to expand safe and equitable access to psychedelic-assisted therapy for anyone struggling with a mental health condition. Marcus is also the Chairman and Co-Founder of VETS: Veterans Exploring Treatment Solutions, a pioneering 501(c)(3) organization that provides resources, research, and advocacy for U.S. Special Operations veterans seeking alternative mental health treatments.