Measuring the ROI of your mental health benefits — and when to switch vendors

There's no shortage of stressors impacting today's workforce, yet employee benefits aren't keeping up with an increasingly dire need for support.  

According to Lyra Health's annual workforce mental health survey, 90% of employees experienced a mental health challenge last year, and stress and burnout levels are once again on the rise, after declining year-over-year since 2021. Burnout can lead to higher turnover rates, as well as more expensive health interventions, like disability leave and emergency care.  

Employers should continue to invest in the right mental health benefits, but also address workplace stressors that are tied to burnout, like overwork, lack of recognition and inadequate staffing, says Joe Grasso, Lyra's vice president of workforce transformation. Seventy-three percent of employees told Lyra these issues impact their work performance, a 24% increase from 2023. 

"When we think about burnout as being predictive of all of these costly problems to an employer, it makes us look at what are the most efficient areas for employers to intervene to reduce burnout, and we know it's work life," Grasso says. "Getting the employer on board with the idea that if you solve how excess stress is making work life inefficient, you unlock more efficiency and better employee well-being." 

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Employers may have embraced mental health benefits during the height and aftermath of COVID, but they need to do more to adapt and address the stress associated with the employee experience today, Grasso says. While employers have typically folded their mental health care offerings into an EAP, those programs see a 4% utilization rate on average. 

"It's a blind spot," Grasso says. "Mental health support has traditionally been a check-the-box approach within the EAP, because it's not a huge part of the benefits spend. But if you have a workforce that is struggling with their mental health and not getting effective treatment, you're going to see a drag on productivity and retention that spills over into other healthcare claims costs." 

Employers should take a targeted approach to their mental health strategy: Measure the efficacy of a current mental health benefit offering, and address other workplace-specific issues to prevent burnout from spiraling out of control. 

Measuring mental health ROI

To measure the efficacy of a mental health offering, employers should be working with their vendor to calculate who is using the benefit, and if they're actually getting better, Grasso says. Vendors should be partnering with providers who are utilizing data to measure the outcomes, and adjust or pivot the approach if necessary. 

"You want to have a vendor that is evaluating their providers for use of [evidence-based] treatments that work, and that's measuring all of the outcomes for their clinical care episodes," Grasso says. "Once they've provided assurance of those practices, you need the data that says, this is how many people engaged with care, got that care, improved and recovered. And one step further, this is what that can mean for cost savings in the health plan and for productivity and retention." 

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At Lyra, their care team takes a multi-pronged approach when working with employers to build an effective mental health strategy. Grasso says it's important to acknowledge that offering any sort of benefit is a huge win. The next step is to see how that can be applied to the total workforce population. 

"Everyone in your workforce has mental health, and all of them deserve to be supported. So what does that look like?" Grasso says. "[Provide] organizational programming around how to better manage your stress, improve your sleep, reduce mental health stigma, address issues like burnout, and then deploy products that make it easy for everyone to champion their mental health." 

Changing work itself

Beyond benefits, Grasso says employers need to address core issues with their approach to mental health and wellness in the workplace. Even the best benefits mean nothing if managers aren't setting realistic expectations or lack the skills to lead with empathy. 

"That's working with employers on things like evaluating your workforce for the impact that work has on their mental health, and looking at which groups of employees are being impacted negatively by which factors," Grasso says. "Then it's changing policies, and management and operational processes to reduce some of those unnecessary risks to employee mental health." 

Making sure managers are providing role clarity to their employees, addressing issues of workplace harassment and being active managers throughout the employee life-cycle is not just good for employees, but for a business's bottom line, Grasso says. 

"The most cost-effective way to address burnout is with employers investing in healthy management practices," Grasso says. "There's a toll that's taken when employees are faced with a lot of rapid change or uncertainty, and getting ahead of that with really effective change management helps reduce the excess stress and ensures that employees can be most productive."