Unemployment Due to Mental Health Issues

Published: February 2024

Unemployment has a profound and negative impact on mental health, worsening when an employee is unable to adjust to their surroundings. The global workforce has faced multiple challenges and pressures from an increasingly difficult internal and external environment, many of which have been exacerbated in the wake of high unemployment rates due to the COVID-19 pandemic.

What about the employees who are without work due to long-standing health issues? As multiple research papers and survey results show, these prospective employees are facing continuous challenges in finding the right employment and keeping it. 
Survey results and findings are startling

According to McKinsey’s survey titled ‘American Opportunity Survey’, over 15% of respondents said their main cause of unemployment was mental health issues. More than 5,000 Americans participated in this survey, many of whom were pessimistic about finding the right job soon. A dizzying rise in inflation, currently at a 40-year high has further worsened the situation for average American households, with the spike in prices attributed to supply chain disruptions.

The results in the UK have shown an equally worrying trend. Despite an extension of the Coronavirus Job Retention Scheme, the unemployment rate reached a 7-year high at the end of 2021. The projections by the Office of Budget Responsibility (OBR) indicated that the unemployment rate was around 6.5%, equivalent to around 940,000 people who were recently unemployed.

Moreover, an independent survey by YouGov and designed by the Resolution Foundation discovered that younger adults in the age group of 18-64, especially those belonging to ethnic minorities were the hardest hit due to unemployment, loss of work, or pay cuts.

Perhaps you are not surprised by this data. In which case I ask, why are such disruptions in employment generation becoming increasingly normalised? Previous research on this subject provides us with insight:

According to research published by the OECD, people with mental illnesses are 7 times more likely to be unemployed than those who are healthy. 

People with mental health issues may face stigma and discrimination from employers, co-workers, and society, which can reduce their chances of being hired, receiving support, and staying at work. They may also struggle with the decision of whether to disclose their condition or not, as both could have negative consequences.

The major challenge here is the negative attitude that employers hold over people who are currently facing mental health issues, but also towards those who had issues in the past. The stereotyping of mental illness due to popular culture is not helpful, with patients referred to as unstable, careless, and untrustworthy, which hurts their chances of gainful employment.

Often overlooked and ignored, our mental health and physical wellbeing are closely tied together. For instance, workplace stress, anxiety and general depression can have physical manifestations, contributing to conditions like cardiovascular issues, chronic pain and a weakened immune system. The negative attitudes of fellow employees and employers may have a damaging impact on a person’ self-esteem, leading them towards societal isolation and loss of interest in daily activities.

How to support and bolster employees’ mental health

There are several ways to support employees’ mental health and to make organisations’ work cultures inclusive and more welcoming. The UK government’s initiatives JETS and RESTART are pilots with a focus on reducing short and long-term unemployment respectively. The programmes help applicants to improve their practical skills, such as redesigning CVs, prospective interview techniques, and identifying job opportunities.

Income-related benefits such as Universal Credit would help candidates who are unable to work full-time. The standard allowances under the Universal Credit scheme saw an increase of £20 per week to provide additional support during the pandemic and to families with marginal income safety nets.

Apart from these governmental measures, two areas in which policy change could improve mental health while reducing unemployment are:

1. Improving Job Support

Finding quality work that fits with life needs and responsibilities, such as childcare commitments, could be prioritised over finding any work. To do this, Disability Employment Advisers must be equipped with better training, have manageable caseloads, and access to adequate resources to support claimants experiencing mental health problems.

2. Embedding Mental Health Support:

New employment programmes must be of higher standards taking into account their impact on mental health and wellbeing. Regular and intensive support provides stability for individuals is critical.

Addressing skill gaps for lower-skilled workers will help them find better-quality work. Allowing for a flexible working environment and upskilling employees will promote sustainable inclusive employment.

The responsibility for a society’s mental health issues is not only of the government but also of the organisations in the labour force. A robust working population is one of the strongest assets of a nation’s backbone and growth trajectory.

A little care, kindness and compassion towards employees’ issues will go a long way in improving their wellbeing and fruitful participation in society. Change starts at home, so contract PIES Consultancy today to equip your workplace and staff to best aid employees with mental health challenges and illnesses.

This blog was written by Tapas Perti.

If you're looking to share your personal lived experience with us or  your expertise on mental health, physical health, accessibility, and inclusion, please contact media@ruralmhmatters.co.uk. We'd love to hear from you.


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