Depression rates are climbing, straining workforces. Explore the key drivers, business impact, and how employers can respond with adaptive, preventive strategies.
Depression rates have risen by 60% over the last decade, and organizations can no longer ignore the impact on employees.
Between economic uncertainty, increasing caregiving demands, growing experiences of isolation, and more, today’s workforce faces immense pressure on a daily basis—and their mental health is suffering as a result.
Rather than treating depression as an isolated health condition, strategic-minded leaders use it as a lens through which to analyze their workforce, identifying risk factors that affect productivity, engagement, and well-being.
By understanding depression and its impact on their workforce, leaders can create targeted interventions that strengthen employee well-being and cultivate resilience.
Read on to explore the trends fueling workplace depression, its impact on employee health, and how organizations can respond strategically.
To understand how depression is affecting an organization specifically, leaders must first look at the root causes. Below are several of the top factors impacting employee satisfaction and well-being.
Over the last several years, economic volatility and price hikes have left many people feeling stressed and uncertain about the future. In fact, studies show that people struggling with inflation stress are 2.22x more likely to have symptoms of depression.
Although general inflation appears to be slowing down, Aon’s Global Medical Trend Rates Report shows that medical care costs are expected to rise by 10% in 2025, leaving many employees anxious about affordability.
Caregiving is often time-consuming and expensive, which is why single parents and the sandwich generation (those caring for children and aging relatives simultaneously) often experience elevated financial stress.
These groups generally need additional support and flexibility to maintain their mental health. Unfortunately, though, this support is often lacking. As a result, single parents are 85% more likely to be extremely dissatisfied with their benefits, according to Aon research.
Menopause, a universal yet underacknowledged life stage, can also make work challenging and stressful due to symptoms like poor sleep, hot flashes, and mood fluctuations. Research indicates depression is common during menopause, especially for those dealing with severe symptoms or who have a history of depression.
Gen Z now makes up almost a fifth (18%) of the U.S. workforce, outnumbering Baby Boomers. Research shows this generation struggles more with their mental health than previous generations due to greater news awareness, climate anxiety, social media exposure, financial uncertainty, and increased isolation.
In fact, Gen Z is 66% more likely than other generations to say that their social life impacts their well-being—a fact that highlights how generational differences can affect depression and mental health, including in the workplace.
It may be tempting to view rising depression rates as simply a clinical problem. After all, doing so puts full responsibility on the employee to seek treatment—or at least to keep it from affecting their work.
But this perspective doesn’t take into account the large-scale structural workforce strain. Over one-third of U.S. workers experience symptoms of depression or anxiety on any given day, dealing with symptoms such as:
These symptoms have significant organizational consequences. Employees dealing with depressive symptoms may experience workplace challenges like procrastination, missing deadlines, making more errors than usual, producing lower-quality work, arriving late to work more often, or even attrition.
When left unaddressed, these symptoms affect more than individual performance. On a larger scale, they can lead to increased absenteeism, presenteeism, disengagement, and costly leave.
In fact, studies show depression costs U.S. businesses over $26 billion annually in health care costs alone and $51.5 billion in lost productivity. Even minor symptoms have been shown to reduce how much an employee can get done.
Employers who fail to see depression as a systemic risk will miss early warning signals for retention and productivity. Meanwhile, those who dig into the data and take strategic action will not only improve their employees’ well-being but also drive long-term organizational success.
There’s no quick fix for depression risk in the workplace. While offering a free meditation app or hosting a mental health workshop is a helpful start, single-point solutions and isolated initiatives are insufficient to make a meaningful impact.
Instead, consider the following strategic imperatives to work toward a healthier organizational culture.
Employees’ needs vary widely based on life stage, cultural considerations, co-occurring health conditions, and other factors, which means they need benefits that can meet them where they are.
Unfortunately, most workers don’t have access to flexible, preventive mental health care. According to Aon data, almost three-quarters (72%) want customizable benefits, but only 41% have them. And over half of large employers don’t offer mental health benefits beyond reactive clinical care, according to Mercer research.
Employers who go above and beyond baseline offerings and provide tailored support can prevent expensive mental health crises and meet the diverse needs of their workforce.
Stigma surrounding mental health remains a major obstacle that keeps depressed employees from reaching out for support. In fact, less than half of employees feel comfortable talking about their mental health at work, and a majority aren’t sure how to access their benefits.
Leaders can play a pivotal role in combating this stigma by normalizing mental health conversations at work. And yet, as many as 7 out of 10 managers and senior leaders haven’t received any training in facilitating such discussions.
Consider initiatives that encourage leaders in your organization to share about their own mental health journeys. You can also offer formal training to equip managers to act as a support for their teams, pointing them to available resources.
Employees across life stages and geographic locations often have unique needs or unequal access to care. For example, many lower-income or rural areas struggle with a shortage of mental health care resources and personnel, and employees in regions with economic or political unrest or higher crime may have greater mental health needs.
Preferences, too, vary across generations and geographic locations. According to Modern Health’s global engagement study, employees in Asia, Latin America, and Oceania tend to prefer self-guided digital resources over therapy or coaching, more so than other regions. Similarly, younger generations (18 to 29 years old) are more likely to seek one-on-one care than older generations (58 to 67), likely due to traditional mindsets about mental health.
Traditional EAPs often can’t address these disparities. So consider adopting benefits that offer multiple modalities to accommodate diverse needs and cultural or generational preferences.
With health care costs expected to rise by 10% this year, employers are facing increasing pressure to rein in spending. Consequently, well-being initiatives remain one of the most common cost mitigation strategies, according to Aon research.
These initiatives encourage employees to use preventive care. This, in turn, helps them avoid expensive mental health crises down the road and reduces stress that can exacerbate physical conditions.
As more employees miss work, fall behind on deadlines, or even quit their jobs due to mental health, employers are beginning to realize that depression is not merely an individual health issue. Instead, it’s a strategic workforce signal that can help guide business strategy and decision-making.
Investing in your teams’ mental health today reaps workforce resilience tomorrow. By reframing depression support as a workforce strategy, your company can be better prepared to navigate volatility, retain talent, and build resilient organizations.
Modern Health’s adaptive, holistic health care model offers personalized and equitable care that meets employees where they are. Connect with our team to learn how Modern Health can support you in building a stronger, healthier workforce.
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