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Australia has a mental health crisis. The Productivity Commission has found mental health issues cost Australia up to A$200 billion to $220 billion per year – one tenth of annual economic output.

Job stress is a major contributing factor to that crisis, affecting both physical and mental health.

Using data from 2007 to 2021, an Australian study found employees who suffered moderate or high psychological distress took more sick leave, were less productive at work and were more likely to be underemployed.

This is backed up by data from Safe Work Australia. In 2022–23, work–related mental–health problems kept employees off work five times longer (or about 35 weeks) than average serious claims. Women are more affected than men.

Working from home, or even hybrid work, does not seem to be a simple solution either. Recent Australian research conducted post-pandemic found employees experienced more negative emotions, loneliness, depression and anxiety if they were working from home or had a hybrid working arrangement.

The key factors behind workplace depression

Our recent research, based on UK data, matches workers and employers to show how managers can potentially affect the work–related depression of their employees – for better and for worse.

We found work–related depression is widespread; about 49% of the 20,000 employees surveyed said their job made them feel depressed at least some of the time in the past few weeks.

Job demands, such as work pressure and not having enough time to do the tasks required, are associated with more work–related depression. By loading up workers and putting them under excessive pressure to finish their work, managers can increase work–related depression, the research found.

Australian research shows additional job demands also include bureaucratic hassles, emotionally taxing work, and workplace conflict. This means mental health is a management issue, especially as many employees now face faster–paced work and more multitasking.

Fortunately, managers can also make things better. One way is for employees to have greater autonomy at work. More autonomy – in terms of being able to determine how to do the work, start/finish times, the tasks performed, the pace of work and the order in which tasks are done – is linked with less work–related depression.

Having autonomy allows an employee to structure their work day in such a way as to minimise negative impacts. Paradoxically, this runs counter to the push for higher–level management to have more control, and the growing use of software that allows for remote monitoring of employees.

Similarly, if an employee feels supported by their manager (and their coworkers) , they have better work–related mental health outcomes. We also found that employees with greater job security had less work–related depression.

Pick your employer wisely

Our findings have implications for workers, managers and policymakers.

For workers, choose your employer wisely as it can impact your health as well as your income! Easier said than done, of course. Some information about employers is available on crowdsourced sites such as Glassdoor, but managerial practices are hard to observe from outside and are subject to change.

So there is a case for the mandatory reporting by firms of “psychosocial hazards”, which are aspects of a workplace or its culture that can cause psychological or physical harm. This reporting would be similar to current reporting on gender pay gaps.

This is a logical next step. Safe Work Australia already requires businesses to monitor and consult on psychosocial hazards.

Public reporting would create an incentive for companies to do better and allow for better choices by potential employees. The spotlight of mandatory reporting of the gender pay gap has helped to improve this gap in recent years.

Work conditions matter

Managers need to recognise that costly mental health problems are partially driven by their choices of management practices and work conditions. Ultimately, poor mental health outcomes at work hurt the bottom line.

First, Australian businesses with employees who have better mental health are more productive.

Second, the cost of workers’ compensation is levied on business, making them less competitive. Over the ten years to 2023–24, serious mental–health compensation claims went up by 161% in Australia, the largest increase of any workplace injury.

Work pressure accounted for about 25% of serious mental stress claims, with harassment/bullying (33%) and exposure to violence and harassment (16%) the other top causes, Safe Work Australia found.

Management can potentially reduce all three.

The costs are shared by society

Finally, the costs of serious workplace mental–health issues are borne by the community, through lower productivity, and also create a burden on the public–health system.

The costs can be long–lived; research suggest burnout affects not only the individual involved, but also reduces spousal income and the education levels attained by their children.

This suggests it’s in the national interest to improve management skills. Good management boosts profit, but it also reduces the costs to the public–health system.

If this article has raised issues for you, or if you’re concerned about someone you know, call Lifeline on 13 11 14.

Workplace Trauma, Abuse, or Bullying: Call 1800 RESPECT at 1800 737 732 or text 0458 737 732 to access 24/7 specialised counselling.

13YARN is a free and confidential 24/7 national crisis support line for Aboriginal and Torres Strait Islander people who are having difficulty coping. Call 13 92 76.

The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.