SMEs and the mental health challenge

Blog posts

17 May 2023

Sally WilsonSally Wilson, Principal Research Fellow

Not a healthy state of affairs

We have seen a lot of headlines lately about ailing small businesses, but recent news stories signal that their staff are ailing too. According to HR News concerns about staff mental health are ‘keeping UK SMEs up at night’ with one in seven SMEs identifying the mental health of their workforce as one of their top three threats.

There are signs however that this topic is on the government’s radar. It’s unusual for workplace wellbeing to feature in budget announcements, but in March commitment was made to a range of measures concerning employee health, including an occupational health (OH) subsidy for SMEs.

The Chancellor said the government would bring forward two new consultations on improving the availability and take-up of OH services and double the funding for the small business subsidy pilot which was announced in 2021. This is consistent with plans in the ‘Health is Everybody’s Business’ report which focussed on improving worker access to specialist occupational health support.

A step forward

This announcement has been welcomed by the OH profession as a step in the right direction but it’s unlikely small business owners greeted this with a sigh of relief. They won’t be getting anything for free and a subsidy for services they aren’t currently using is arguably not a saving. Amid rising energy bills as well as supply chain and distribution issues, the cost of doing business has increased and the most immediate priority for many businesses is cost-cutting.

Experts would argue that an OH subsidy could cut the costs of ill health at work; there is a strong business case for keeping employees well. But engaging small businesses with occupational health and wellbeing interventions can be challenging. There is confusion among employers about what OH actually is, compounded by the wide array of ‘wellbeing’ or ‘wellness’ products and services on the market. Business owners could be forgiven for not knowing where to turn and wholly relying on their own internal HR processes (as well as over-burdened GPs) to manage employees with health issues.

Bringing SMES on board with workplace health

It is certainly not the case that smaller employers don’t care about their staff – our research on managing workers affected by cancer in SMEs, evaluation of the Workplace Health Connect Pilot and evaluation of the Fit for Work service has shown that they do. But know-how, time, and motivation can be a challenge and small businesses are notoriously hard to reach when rolling out campaigns and initiatives. Also, when times are tough, persuasive, meaningful messaging that resonates with their concerns is needed.

The recruitment crisis in some sectors arguably provides a means of nudging businesses to pay attention to ‘pull factors’ that could attract job applicants, such as showing concern for staff wellbeing. A recent report from the Federation of Small Businesses ‘Scaling Up Skills’ found that among small businesses that have tried to recruit in the past 12 months, 78 per cent have experienced difficulties in recruiting staff. A commentator in People Management has suggested that “for SMEs …small investments in key areas, like mental health support, could be the key to recovering and thriving in the post-Covid economy”. Academics agree that “sustainable mental health and wellbeing is crucial for achieving sustainable development, notably for sustainable SMEs growth. The message is simple: workers are attracted to businesses that help keep them in good health and this, in turn, benefits job retention and productivity.

Where to start

Taking action on employee health need not be expensive, at IES we have evaluated several approaches to keeping staff well that are low-cost or free. A key consideration is quality, i.e. support should originate from an authoritative, expert source. Workplace initiatives from Mind meet this definition, such as their Blue Light Programme which provides mental health support to the emergency services, and their mental health awareness training package for managers.

Last year IES and Gapsquare evaluated an initiative that provided free Mind resources to small businesses in the West of England. Part of this work comprised a case study approach which allowed researchers to explore the benefits to small businesses in depth. The Thrive at Work West of England initiative arose from a collaboration between employers and partners to provide SMEs with tools and training resources for the management of mental health and wellbeing at work. The aim of Thrive at Work (which continues to run) is to embed good mental health practice in businesses and increase support for employees. Our findings showed a very high degree of satisfaction with the training among users, managers felt that it had equipped them to communicate about mental health more openly and improved their confidence to offer support to staff.

Moving forward while the wheels of government turn

The results suggest that a relatively small investment of manager time in training can have significant effects. Case study participants felt that ‘Thrive’ had made their company a better place to work and it is worth considering potential wider repercussions which we were not able to explore fully. For example, when recruiting, assurance that line managers have attended mental health training could reassure younger job candidates who worry about raising this topic at work. Also, offering a culture that is generally supportive and open is a positive step towards meeting the needs of other groups dealing with life issues, such as staff affected adversely by the menopause or experiencing bereavement and loss.

Progress towards affordable, specialist OH services for all SMEs will be slow. But instead of waiting for government initiatives to reach them, business owners would be advised to consider low-cost, high-quality options that improve the management and prevention of health issues at work. The UK’s mental health charities are a force for good in this area, especially when they work in partnership with government and employer bodies. The main challenge for all of them is to reach small businesses and demonstrate the benefits that they can offer to their staff that don’t break the bank.

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.