Breaking point: 2025 research again confirms the critical role of mental wellbeing in business performance

Keywords: mentalhealth, youngworkers, leadership, strategicinterventions, sustainablesuccess

Date: 24 March 2025, WorkLife Digital

PwC’s latest research: Turning the Tide on Economic Inactivity*, reveals continued trends in the UK workforce, highlighting mental health challenges as a significant driver of economic inactivity. Business leaders must act decisively to address these issues, particularly as poor mental health disproportionately impacts younger workers and threatens productivity, financial performance, and talent retention. Encouragingly, many interventions require strategic adjustments rather than significant financial investment.

Key findings from the research

1. Economic and business impacts

• Nearly two-thirds (63%) of businesses report an increase in employees leaving the workforce over the past two years.

• 83% of businesses say this issue is affecting financial performance due to costs associated with staff departures and recruitment.

• Poor mental health and low self-esteem are barriers for 66% of individuals not currently in work, hindering their return.
  
  

2. Mental health challenges among young workers

• One in four young workers (aged 16-24) are considering leaving work due to worsening mental health.

• Employees aged 18-24 are 40% more likely to cite mental health concerns compared to older colleagues.

• Unfulfilling work is also a major contributor to workforce exits, cited by over a third of respondents.
  
  

3. Employer readiness and challenges

• While 83% of employers offer health and wellbeing support (e.g., helplines and counselling), uptake remains low due to stigma and embarrassment.

• SMEs struggle more than larger firms to provide tailored mental health support due to resource constraints.

Actions that don’t require significant investment

The research emphasises that many solutions to address workforce mental health challenges can be implemented without huge financial outlay but require cultural shifts and strategic focus.

1. Build awareness and normalise conversations

Why it matters: Many employees feel stigmatised or embarrassed about seeking help for mental health issues. Nearly half of those who spoke with their employer before leaving reported receiving no support.

What businesses can do:

• Train managers to identify signs of distress and initiate supportive conversations.

• Conduct awareness campaigns to destigmatise mental health discussions.

• Promote peer-to-peer programs like “mental health champions” who can act as trusted points of contact.
  
  

2. Prevention-first workplace design

Why it matters: Reactive approaches often come too late. Prevention-first strategies integrate mental health into workplace culture, addressing stressors before they escalate.

What businesses can do:

• Conduct regular stress and mental health audits to identify workplace dynamics contributing to anxiety or burnout.

• Foster social connections through team-building initiatives or peer networks.

• Offer flexible working arrangements to reduce stress and improve work-life balance.
  
  

3. Focus on skill development

Why it matters: Confidence at work plays a crucial role in job satisfaction and resilience. Skills development can empower employees, boosting confidence and engagement.

What businesses can do:

• Encourage mentorship opportunities where experienced employees guide newer ones.

• Offer workshops on resilience-building, stress management, and effective communication.

• Provide access to professional development programs tailored to individual needs.
  
  

4. Enhance communication channels

Why it matters: Open communication is essential for identifying at-risk employees early, yet many workers do not feel comfortable sharing concerns with managers.

What businesses can do:

• Develop Wellbeing Action Plans that identify individual triggers and protective factors.

• Implement anonymous feedback tools to understand employee needs without fear of judgment.

• Schedule regular check-ins between managers and employees focused on wellbeing rather than performance alone.
  
  

5. Leverage existing resources more effectively

Why it matters: Many businesses already offer Employee Assistance Programs (EAPs) or counselling services, but usage remains low due to lack of awareness or perceived barriers.

What businesses can do:

• Increase visibility of existing resources through internal campaigns.

• Simplify access processes for support programs.

• Partner with third-party providers for confidential services tailored to diverse employee needs.

Strategic benefits for business leaders

Taking proactive steps not only supports employees but also strengthens business outcomes: 

Improved retention: By addressing root causes like unfulfilling work or mental health challenges, businesses can stem the flow of talent exiting the workforce.

Enhanced productivity: Employees who feel supported are more engaged and resilient, reducing absenteeism and presenteeism.

Cost savings: Preventing departures reduces recruitment expenses while fostering loyalty among existing staff.

The role of leadership

Business leaders must champion these efforts by fostering a culture where wellbeing is prioritised across all levels of the organisation. This includes modelling openness about mental health challenges, investing time in understanding employee needs, and ensuring that interventions align with the realities faced by different demographics.

The latest research underscores the urgency for businesses to address workforce mental health challenges strategically. While resource constraints remain a concern for many employers, particularly SMEs, there are impactful measures that do not demand significant investment but require thoughtful implementation. By embracing tailored prevention-first approaches, enhancing communication, and normalising discussions around wellbeing, business leaders can create healthier workplaces that retain talent, drive engagement, and boost overall performance.

WorkLife Digital is a global mental-wellbeing consultancy driven by the mission to improve the sustainability of businesses. Our psychological wellbeing tool, Worklife Quotient (WL-Q), is modelled on cutting-edge scientific research and provides organisation-wide measurement and intelligence on the mental wellbeing levels and psychological resilience of staff. WL-Q also assesses the impact of organisational practices (i.e. people and culture, leadership styles, organisational purpose and values, social impact) that have a direct influence on staff wellbeing and provides strategic recommendations on addressing risks and promoting strengths.

For more information, get in touch at lisa@worklife.digital

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REFERENCES

PwC Turning the tide on economic inactivity: Retaining talent and skills in the workforce. March 2025
Based on a survey amongst 4,404 workers aged 18-64 in the UK, January 2025

Mental Health UK The Burnout Report January 2025
Based on a survey amongst 4,418 UK adults, of which 2,436 were workers, November 2024