Employee Mental Health Rises to the Top of the Workforce Agenda
Venture capitalists have found a new favorite HR tech category: mental health. Startup companies like Ginger and Mindstrong have secured huge funding deals in recent months from venture firms who see this as the next big trend in workforce technology.
And with May 2021 being declared National Mental Health Awareness Month, the spotlight is shining even more brightly on the topic. In the workplace, rising rates of anxiety and stress caused by COVID-19 are pushing employers to pay more attention to the mental health of their employees and its impact on the business.
“The wellness craze isn’t new but the pandemic gave it new relevance,” said Holger Mueller, vice president and principal analyst for Constellation Research. “People need help and employers want to be sure they are staying well while working at home.”
Let’s Talk About Anxiety
The growing concerns about mental health coupled with the emergence of tech companies offering digital access to mental health solutions has turbocharged an ongoing shift in corporate culture. Companies are actively seeking mental health and wellness options to add to their employee benefits.
It’s a big change from even ten years ago when employees had few avenues to get mental health care through the workplace. While their benefits might have included some counseling or therapy sessions, appointments were hard to come by and employees were wary of asking for help. COVID-19 made the issue mainstream.
“The pandemic forced so many organizations to come to terms with the radical humanity of their employees,” said Lindsay Lagreid, senior advisor for Limeade, an employee experience software company.
Employers are also recognizing that the mental health of their employees is correlated to measurable business results, such as productivity and reduced absenteeism. “COVID raised awareness about a problem we’ve been talking about for a long time,” Lagreid said. “You have to support the whole person if you want them to be productive.”
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Mental Health Tech Boom Not Just About Remote Work
The demand for mental health solutions during COVID and beyond has triggered significant growth in the mental health tech landscape. So far in 2021, three mental health tech companies received more than $100 million in venture funding deals — Lyra Health secured $187 million; and Ginger and Mindstrong each raised $100 million.
Modern Health, a mental health benefits company, also raised $74 million on the heels of $51 million last October. Employee coaching and mental health app BetterUp made a big splash when it hired Prince Harry, the Duke of Sussex and an outspoken advocate for mental health, as its chief impact officer.
“We are seeing a massive acceleration in demand for technology-enabled access to mental healthcare,” said Russ Glass, CEO of Ginger, a mental health tech start-up that offers digital access to behavioral coaches and therapists.
Glass noted that the technology aspect of these companies isn't just to serve the needs of newly remote workers. The technology is intended to address an ongoing crisis of supply and demand in mental health. One 2018 study found 38% of people have to wait longer than a week to get access to mental health treatments, and nearly half report having to drive more than an hour roundtrip to get access to care.
“It’s not a problem that can be solved by adding more providers to your network, because there aren’t enough of them,” he said.
Ginger tackles this problem by using certified behavioral coaches to provide preventive care to patients seeking supporting for lesser mental health issues, while therapists support those with bigger needs. The platform also uses natural language processing and artificial intelligence to automatically summarize notes, and send updates and alerts to users. “It handles the busy work, so coaches and therapists can treat more patients,” Glass said.
The model appears to be working. Ginger experienced a 300 percent growth in 2020, and Glass expects to see similar rates of growth in 2021. Other mental health tech companies are seeing similar increases as companies weave these offerings into their benefits packages.
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Stop the Stigma
This trend is not likely to end with the pandemic. The demand for mental health may have been triggered by COVID-19, but the real change is in how employers are talking about mental health.
High rates of stress in the workforce, and the resulting impact on productivity is causing employers to be more open about the benefits of providing proactive mental health care. “The stigma still exists but it is decreasing,” Glass said.
Company leaders are also realizing that if employees get help for minor issues, like trouble sleeping or anxiety about a presentation, those problems are much cheaper and easier to solve than waiting for someone to spiral into a mental health crisis. “Treating an employee going through clinical depression or a serious mental illness has much higher medical costs,” Glass said. It can also lead to higher rates of sick leave, lost productivity and turnover.
However, employees won’t proactively seek mental health care if it’s not normalized by managers and peers. If the corporate culture minimizes mental health issues or judges people for getting mental healthcare, it doesn’t matter if the company offers it as a benefit, people won’t seek them out, Glass said.
“Leaders need to talk about what’s available and share their own stories of getting help if they want employees to use those resources,” he said. Employers struggling with how to have these conversations should look to their youngest employees for guidance on how to talk about mental health and destigmatize its use.
“Gen Z has a gritty emotional vocabulary when discussing mental health and they are changing the conversation,” Lagreid said. She noted that this generation has no trouble talking about their mental health needs and the services they’ve received, and she believes they will demand employers make it a normal part of the benefits offering.
“Employers who don’t invest in employee experience and mental health won’t be able to handle the cost of turnover and lack of engagement,” she said. “And it will happen sooner than you think.”
Before choosing any mental health or wellness platform, Mueller suggested talking to employees about what exactly they want, what’s missing from the current offering, and whether digital mental health and wellness tools would add value.
“We are facing a lot of disruption in the workplace,” he said. “So it’s a good time to rethink what benefits will meet your workforce’s needs in the future.”