Insights

Cost of Mental Ill-Health – The Real Numbers

Mental ill-health is the biggest cause of sick leave in Sweden today — and the most expensive. But most companies vastly underestimate what it actually costs them. Here we break down the real numbers and show why prevention is the best investment an employer can make.

The hidden cost — bigger than you think

When we talk about the costs of mental ill-health, most people think of sick leave. But sick leave is just the tip of the iceberg. Below the surface lies a range of costs that rarely appear in the budget but affect the entire business.

Direct costs

Sick pay

The employer pays sick pay for days 2–14. For longer cases, the Social Insurance Agency takes over, but the employer still bears the production loss.

Temporary replacement

Someone has to do the work. Either you hire a substitute or redistribute — which itself increases stress risk.

Rehabilitation

The employer is responsible for rehabilitation plans and any adjustments upon return.

Indirect costs (often the largest)

Presenteeism

Employees are present but not performing fully. Costs 2–3 times more than absenteeism.

OECD, 2021

Production loss

A stressed employee can perform 30–40% below capacity for months.

Staff turnover

Replacing an employee costs 50–200% of annual salary.

SHRM

Contagion effect

Stress spreads. One struggling employee affects colleagues' motivation and health.

What do the numbers say?

Sick leave

Psychiatric diagnoses accounted for ~40% of all ongoing sick cases in 2023
Burnout syndrome is the most common single diagnosis for long-term sick leave
Average sick leave duration: 6–12 months vs ~4 weeks for physical injury
Women are sick-listed nearly twice as often as men

Societal cost

Mental ill-health costs Swedish society ~200 billion SEK/year

The EU Commission estimates the cost at 4% of GDP on average

Cost per case for the employer

Sick pay (day 2–14)

SEK 15,000–25,000

Production loss (6 months)

SEK 200,000–350,000

Temporary/recruitment

SEK 50,000–150,000

Rehabilitation & adaptation

SEK 20,000–50,000

Training & return

SEK 30,000–60,000

Total per long-term sick leave

SEK 300,000–600,000

Figures vary by industry, role, and salary. For qualified professionals, costs can be significantly higher.

Presenteeism — the elephant in the room

Most HR departments measure absenteeism. Almost none measure presenteeism — despite it costing more.

When an employee is physically present but cannot perform at their normal level due to ill-health.

Presenteeism accounts for an estimated 60–70% of the total cost of workplace ill-health
An employee with untreated stress can have 20–40% reduced productivity for months
In a company with 100 employees, presenteeism can equal millions in lost production annually

The real cost of mental ill-health is often 3–5 times higher than sick leave statistics show.

Example: a company with 200 employees

• 200 employees, average monthly salary SEK 40,000

• 5% affected by stress-related sick leave/year (10 people)

• 15% have noticeably reduced productivity due to ill-health

CalculationCost/year

Long-term sick leave

10 × SEK 400,000

SEK 4,000,000

Presenteeism

30 × 20% × SEK 480,000

SEK 2,880,000

Staff turnover

5 × SEK 300,000

SEK 1,500,000

Total estimated annual cost

~SEK 8.4 million

Mental ill-health isn't a "soft" issue — it's one of the biggest cost drivers in modern organizations.

ROI on preventive measures

Here's the good news.

4:1WHO: every krona spent on treating mental ill-health returns 4 SEK

5:1Deloitte (2022): average ROI on workplace mental health investments

25–30%EU-OSHA: reduction in sick leave with systematic work environment management

20–25%Gallup: lower staff turnover with evidence-based wellbeing programs

What does this mean in practice?

If the 200-employee company invests SEK 500,000/year in prevention:

Savings on sick leaveSEK 1,000,000

Savings on presenteeismSEK 700,000

Savings on turnoverSEK 375,000

Total savings: ~SEK 2,000,000on an investment of SEK 500,000

4:1 ROI

Why traditional solutions aren't enough

Many companies already have some form of support. The problem:

Traditional

Why it fails

Occupational health via contract

Long wait, used only when it's already too late

Wellness benefit

Good for physical health, rarely catches mental ill-health

EAP program

Low utilization (3–5%), high threshold to call

Annual employee survey

Snapshot, not real-time — results come too late

The common problem: the threshold is too high and support comes too late.

How to build a business case

Map your current costs

Pull data from your HR system: sick leave, turnover, employee surveys.

Estimate presenteeism

Even a conservative estimate (10% of employees at 20% reduced productivity) often produces an eye-opening number.

Compare with investment

Set the cost of a preventive solution against potential savings. With 4:1 ROI, the business case rarely needs to be more complex.

Show risk reduction

Reduced legal risk (AFS 2015:4), stronger employer brand, better recruitment capability.

Calculate your cost

Use our evidence-based calculator to estimate what mental ill-health costs your specific organization — in 60 seconds.

Open the calculator

Want to see what mental ill-health actually costs your organization?

Lägereld helps companies move from reactive to proactive — with a platform combining AI coaching, real-time insights, and access to licensed psychologists.

Built on years of clinical experience. Used by companies like ICA, Fjällräven, and Carlsberg.

Book a free demo (30 min)

Sources and further reading

Försäkringskassan – Sick leave in psychiatric diagnoses
OECD (2021) – Fitter Minds, Fitter Jobs
Deloitte (2022) – Mental Health and Employers: The Case for Investment
WHO – Mental health in the workplace
EU-OSHA – Calculating the costs of work-related stress
Arbetsmiljöverket – AFS 2015:4
Gallup – State of the Global Workplace Report