Dealing with mental health at work could save the economy billions.

New research from the University of South Australia has quantified the link between the psychological health of workers and productivity at work.

The experts measured the ‘psychosocial safety climate’, which refers to a workplace’s shared perception that senior management is protecting employee psychological health, and prioritising it over immediate productivity outcomes.

Both poor psychosocial safety climate and depression each affect approximately one-in-three workers every year, with disengagement from work affecting nearly half of all workers.

These contribute to a marked increase in sickness absence and reduced performance at work. Workers in psychologically unhealthy workplaces produce approximately $2000 less output each than their counterparts in psychologically healthy workplaces.

Expanded across Australia’s workforce, that would mean over $12 billion of lost productivity each year.

According to researcher Harry Becher, this is the first study of its kind to calculate the national cost to employers due to lost psychosocial safety climate.

“These results highlight the economic argument for employers to take action on employee psychological health” Mr Becher says.

The study - “Psychosocial Safety Climate and Better Productivity in Australian Workplaces” - was based on the Australian Workplace Barometer project, which aims to provide science driven evidence of Australian work conditions and their relationships to workplace health and productivity.