Diversity & Inclusion

Why Investors Should Look to Companies with Strong Mental Health and DEI Initiatives

By Sara Rahmani, VP of People Experience & DEI at Chronus

More and more companies today recognize diversity, equity and inclusion (DEI) as a key organizational value and practice. However, few organizations include mental health and wellbeing under the DEI umbrella, leaving issues like burnout and disengagement to go unaddressed.

How mental health affects the workforce

Mental health issues have a very real impact on the ability of employees to function both at work and in their personal lives. After the past few years, employee mental health has steeply declined. According to a report by Lyra Health, the vast majority of employees surveyed (84%) reported experiencing at least one mental health challenge during 2021, including stress, anxiety, burnout, depression. Of those surveyed, 54% said mental health problems affect them at work. 

A 2021 study from the American Psychological Association showed the specific effects that workers experience due to work-related stress are:

  • Lack of interest, motivation or energy (26%)
  • Difficulty focusing (21%)
  • Lack of effort at work (19%)

Within the realm of mental wellbeing, the American Psychiatric Association finds racial, ethnic, gender, and sexual minorities often suffer from “poor mental health outcomes due to multiple factors including inaccessibility of high quality mental health care services, cultural stigma surrounding mental health care, discrimination, and overall lack of awareness about mental health.” 

And still organizations often fail to connect DEI efforts with those aimed at supporting employee health and wellness, according to a recent Harvard Business Review article by Chris Michalak and Marlette Jackson. Companies who recognize and serve the intersectionality of these two issues will be better suited for financial success, innovative growth and decreased attrition.

In order to meet employee demands for greater care for DEI and mental wellbeing, companies need to create connections and opportunities for employees to connect across demographics and populations. These connections whether for growth, learning or empathetic interaction build greater resilience and engagement amongst employees, with each other and the organization as a whole. 

Why does mental wellbeing and DEI this matter to investors?

Poor mental health impacts job performance, engagement with one’s work, and communication with coworkers, according to the CDC. These are all critical elements in a healthy high-functioning workforce. Addressing mental health and wellbeing issues can positively impact all of these factors — and, ultimately, the company’s performance.

In addition, research has shown time and time again that greater diversity within organizations can lead to better financial performance, creativity, collective intelligence and more. In addition, employees are 2.4x more likely to say they’re proud to work for a company that fosters an inclusive culture. There’s proof and recognition that DEI is not a nice to have, but a need to have. 

Support for inclusion and good mental health also contributes to retention, as employees are more likely to feel committed and loyal when they know their company cares about their wellbeing. Openly supporting employee mental health and wellbeing is also a powerful way to appeal to potential new hires. According to APA’s 2022 Work and wellbeing Survey, 81% of respondents said that mental health support will be an important factor when searching for work in the future.

How mentoring can enable strong mental health and inclusion in the workplace

Implementing a formal mentoring program as part of your DEI initiatives is an effective way to support your employees’ mental health — and to show you care about your people. 

Building relationships

Many of the benefits of mentoring stem from the fact that these programs build trusting relationships between mentors and mentees. These kinds of empathetic relationships are key to mental wellbeing, both personally and professionally. While remote work has many advantages, it can make it harder for employees to meaningfully interact with their coworkers, leaving many feeling lonely and disconnected. A virtual mentoring program empowers workers to carve time out of their day to connect with each other, providing an alternative to the informal interactions they’d typically have in an office setting.

Mentoring also positively impacts employee engagement, which is critical for business performance and retention. A coaching culture in which employees can seek guidance when they have challenges—a key part of mentoring—correlates with employee engagement, according to a report by Deloitte.

Creating awareness and action on mental health issues

Mentoring also allows for frank conversations about mental health in the workplace within an atmosphere of trust, making the topic less taboo. Employees within a supportive mentoring environment can feel more comfortable self-reporting disabilities and naming needs for accommodation, allowing them to get the support they need to manage their wellbeing.

Relationships between mentors and mentees can also create a safe space for sharing about sensitive topics related to DEI, such as race, gender, microaggressions or even episodes of bias in the workplace. These candid conversations can strongly contribute to a greater sense of belonging at work. 

Mentoring programs like reverse mentoring can also help employees to feel more comfortable interacting with senior leaders who make decisions, emboldening them to offer honest feedback that can contribute to better policies that can improve DEI and employee mental health. Companies that track the impact of mentoring on their employees can see the influence on mental wellbeing over time, building an accountability of the organization to the workers. 

Time to act

Strong mental health and DEI in the workplace is an urgent issue that has flown under the radar for many enterprises. However, it’s clear that these initiatives have a huge effect on company wellbeing, and employers that continue to overlook this key aspect of organizational health could find themselves falling further and further behind. Therefore, investors who put their belief and economic investment behind companies with solid mental health and DEI strategies will not only be making a smart move but paving the way for more profitable companies and a more innovative economy in the future.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.