A Business Leader’s Guide to Mental Health in the Workplace

Quick look: Mental health impacts millions of individuals each year, highlighting the importance of building supportive, stigma-free workplaces. Recognized annually in May, Mental Health Month serves as an important opportunity for employers to strengthen their commitment to employee mental well-being. Discover the origins of Mental Health Month and how thoughtful benefits, inclusive workplace practices, and a partnership with a professional employer organization (PEO) can contribute to a healthier, more engaged workforce.

Roughly one in four U.S. adults experiences a mental health condition, making it essential for organizations to evaluate how they support their teams. From enhancing benefits to creating an open, understanding environment, employers can make a true impact on employee well-being.

Keep reading to learn about the history of Mental Health Month, tips to support mental wellness in your organization, and how a PEO can deliver cost-effective, comprehensive mental health resources for your workforce.

About Mental Health Month

Mental Health Month was established in 1949 by Mental Health America (MHA), the nation’s leading community-based nonprofit dedicated to addressing the needs of those living with a mental condition. In the wake of the Great Depression and two world wars, people began to focus on what was once called “mental hygiene,” and legislation and healthcare facilities began to advocate for mental wellness.

In 2025, the Mental Health Month theme is “Turn Awareness Into Action.” In recent years, many have developed a greater understanding of the importance of mental health. This year’s theme aims to build on that recognition and inspire people to take meaningful, long-lasting action, like practicing self-care, seeking therapy, sharing resources, and more.

During Mental Health Month, MHA also encourages people to wear green, the official color of mental health awareness. Green symbolizes renewal, hope, and vitality, and wearing it demonstrates one’s commitment to mental wellness. Additionally, MHA invites buildings and structures across the country to illuminate green to spread awareness.

Employers interested in participating in Mental Health Month can click here to access various MHA resources, from email templates to event-planning tips.

Mental health’s effect on the workplace

Employees’ mental well-being can significantly impact an organization’s overall health, especially considering Gallup found that 50% of U.S. workers said they experienced a lot of stress the day before.

Mental health challenges can affect work performance in numerous ways:

• Decreases employee engagement
• Increases absenteeism and presenteeism (reporting to work despite being unwell)
• Reduces physical and daily functioning capabilities

Additionally, mental wellness struggles may impact your business’s bottom line. Consider these statistics:

• Each year, 12 billion working days, worth $1 trillion, are lost worldwide due to anxiety and depression.
• Adults with private insurance who are treated for anxiety or depression spend almost twice as much on annual out-of-pocket costs compared to those not treated for a mental health diagnosis, which can raise healthcare costs.
• One in four workers has considered leaving their jobs due to mental health concerns, leaving employers with the expensive task of replacing them.

Conversely, prioritizing mental health initiatives in the workplace can elevate it. Per the National Alliance on Mental Illness (NAMI), over 80% of workers believe mental health benefits, employee assistance programs (EAPs), flexible work arrangements, and sick days for mental health contribute to a positive company culture.

What actions can employers take?

In addition to honoring Mental Health Month, business leaders can prioritize their staff’s mental wellness throughout the year by offering comprehensive employee benefits and nurturing a culture that emphasizes work-life balance and breaks down stigmas.

According to the Society for Human Resource Management (SHRM), 90% of employers offer mental health coverage, up from 85% in 2021. This trend is likely to continue, and many small- and medium-sized businesses (SMBs) leverage PEOs for improved access to care.

Working with a PEO opens the door to cost-effective benefits packages that attract candidates and keep current employees satisfied. In fact, 92% of workers believe mental healthcare coverage is a key part of a positive workplace culture.

With that in mind, here are several ways small businesses can support their workforce’s mental well-being and which mental health benefits today’s employees value most.

An employee assistance program (EAP)

An employee assistance program, or EAP, is “a work-based intervention program designed to assist employees in resolving personal problems that may be adversely affecting the employee’s performance.”

Through an EAP, workers can confidentially discuss and address mental health challenges like depression, grief, loss, family, marital, and other relationship issues, or stress and anxiety. An EAP also offers a variety of other services, including addressing financial and legal concerns, identity theft and fraud resolution, and caregiving resources.

Telehealth

Telehealth usage has remained consistent since its upsurge during the COVID-19 pandemic, and many providers have expanded their ability to provide non-emergency care to patients at home. A recent study reported that 76% of consumers have used virtual healthcare at least once, and 83% of them have used the service within the last year.

Business leaders can consider adding telehealth services to their benefit offerings to give workers quick, convenient access to mental health providers. And since many standard health plans now include telehealth services, the convenience of virtual care usually comes at minimal or no extra cost for employers.

In-office wellness spaces

Whether workplace stress or other factors are involved, employees’ personal needs can’t always wait until the end of the workday.

A corporate wellness space, a specialized room for mindfulness, meditation, and other spiritual exercises, gives staff a private area to refresh, recharge, and return to their work with their best foot forward.

Adding a dedicated wellness room to your office demonstrates that employees have a reserved space to address their needs, even during a challenging day. Consider adding a comfortable couch or chairs and gentle lighting with dimmer switches (migraines and light sensitivity-causing headaches are a common reason people use wellness rooms).

A healthy work-life balance

One of job seekers’ most sought-after perks is a flexible work schedule. For many, hybrid working is here to stay and positively affects their holistic well-being. Creating a work environment that encourages people to set reasonable work hours, prioritizes mental and physical health, and gives employees options over where and how they work helps boost workplace morale and can be a valuable recruiting tool.

Leadership involvement and empathy

Leaders play a vital role in shaping a supportive workplace culture. By acknowledging workplace stressors, demonstrating empathy, and reinforcing that seeking support is a sign of strength, not weakness, they help normalize conversations around mental health. When appropriate and comfortable, leaders may also choose to share their own experiences.

Special events

In addition to including mental health coverage and programs in their benefits packages, employers may also consider initiatives like stress awareness days, free mental health screenings, fitness challenges, and educational lunch and learns. These activities can go a long way toward strengthening company culture and growing mental health awareness in the workplace.

Required mental health offerings

It’s important to note that some benefits and accommodations are legally mandated. These requirements include:

• The Mental Health Parity and Addiction Equity Act (MHPAEA): Requires employers with 50 or more employees to provide coverage for mental health, behavioral health, and substance-use disorders equal to physical care coverage.
• Adhering to the Americans with Disabilities Act: Limits an employer’s ability to ask workers questions about disabilities, including mental health conditions.
• Complying with the Family and Medical Leave Act (FMLA): Mandates that employers provide 12 weeks of job-protected leave to eligible employees, including in mental health-related instances. (Please be aware that various states and local jurisdictions have their own rules concerning paid and unpaid family leave, as well as paid and unpaid sick and safe leave. Please refer to the specific laws relevant to your location to ensure you have the correct information.)
• Providing reasonable accommodation and discrimination protections to staff with mental health conditions: Employees with mental health conditions may be protected against discrimination and harassment and have the right to workplace confidentiality and reasonable accommodations that enable them to execute and keep their jobs.

PEOs: A team of helping hands during your business’s mental wellness journey

Supporting employee mental health is essential, and PEOs are equipped to provide the resources, benefits, and expertise SMBs need to succeed.

For instance, ExtensisHR, a nationally recognized PEO, helps small businesses:

• Offer healthcare plans that include mental wellness benefits under a group umbrella, making support accessible to all employees
• Proactively address mental health with resources, education, and events
• Maintain compliance with applicable mental health and workplace laws
• Create a culture of transparency where employees can openly discuss their well-being

Investing in your people is investing in your business, too. A robust mental health offering enhances recruiting and retention, productivity, and morale, ultimately boosting your bottom line and building a more resilient organization.

It’s never too late to create a forum for discussion and proactively transform your workplace wellness programs. Contact us today and learn how ExtensisHR can help enhance your company’s mental health efforts.

The content of this article and other material contained on the ExtensisHR website are for informational purposes only and are not intended to be a substitute for medical or professional advice. If you, or someone you know, is in crisis, dial 988 to speak with a skilled, trained 988 Lifeline counselor at any time.