Mental health and well-being practices, outcomes and productivity: A causal analysis

The 'productivity gap' between the UK and its international competitors has been widely discussed. In 2019 UK productivity was 83 per cent of that in France and the US and 86 per cent that of Germany. In 2020, UK industry productivity growth rates were also negative, potentially exacerbating the pre-pandemic productivity gap. OECD evidence also suggests that mental health in the UK may have been particularly seriously impacted by the pandemic. Between 2019 and 2020 the proportion of people experiencing anxiety rose in a number of countries (Belgium, Czech Republic, Denmark, France and the UK) with the UK registering the highest level of anxiety of any country studied in 2020 - 33 per cent (OECD 2021, Figure 1.20, p. 179). This pattern is likely to have exacerbates the pre-pandemic, productivity costs of poor mental health and well-being in the UK, which were estimated at £42bn - £45bn.

Despite the scale of the impact of poor employee mental health and productivity we know little about the outcomes (causal effects) when employers implement mental health and well-being practices on employees' mental health and well-being and even less about the causal mechanisms through which poor MH&W influences firm-level productivity. The 2020 Australian Productivity Commission report on mental health concluded, for example, that 'there is limited evidence on the effectiveness of these interventions ... there has been difficulty in establishing the effectiveness of different programs and initiatives' (Productivity Commission, 2020, p. 342).

Our ambitious aim here is to address this gap in our understanding and to establish the causal mechanisms through which firms' adoption of mental health and well-being (MH&W) practices can benefit productivity and productivity improvement. Which MH&W practices have the greatest benefit for employee mental health? Which have the greatest benefit for employee well-being? And, how do these effects impact firm-level productivity? Understanding these linkages is critical both during the recovery from Covid-19 and its attendant mental health impacts and in building higher and sustainable productivity in future years.

Our study adopts an inter-disciplinary and mixed-methods approach integrating perspectives from management studies and economics relating to the productivity benefits of the adoption of management practices with insights from work and occupational psychology relating to the well-being benefits of employers' actions. Our methodological approach is longitudinal involving a mix of econometric, statistical and observational research methods. Capitalising on and developing existing data sources we will follow around 1500 firms across the East and West Midlands of England through the lifetime of the grant and examine the activities and well-being of work groups and individuals within these firms. Longitudinal analysis - both qualitative and quantitative - will allow causal relationships to be established, i.e. activities in period 1 leading to outcomes in subsequent periods.

This project will compliment another major project - the Mental Health and Productivity Pilot (MHPP) - to which the Nottingham and Warwick teams are also contributing (https://mhpp.me/) funded by the Midlands Engine. Study findings will contribute to the literatures on management practices, occupational health and firm level productivity improvement. Project outcomes will guide employers in supporting good employee mental health and well-being and so contribute to productivity improvement. Outcomes will also be relevant to support organisations working with businesses to develop healthy workplaces and productivity upgrading and the project is strongly supported by a range of public and private sector organisations (see letters of support).