Employers that take steps to prevent burnout can save thousands of dollars a year per employee, concludes the Mental Health in the Workplace 2025 report released in October 2025.
Mental Health Research Canada produced the report in partnership with Canada Life’s Workplace Strategies for Mental Health. Pollara conducted the research, surveying more than 5,000 employed Canadians in June 2025.
Unfortunately, the rate of burnout rose to 39 per cent of employees in 2025, up from 35 per cent in 2023. Two in five (40 per cent) have received a diagnosis of a mental-health diagnosis or neurodevelopmental condition in their lifetime. Among those with a diagnosed condition, 35 per cent reported that it occasionally impairs their ability to perform their job, and 12 per cent stated it severely impairs their ability to work.
“We’ve seen mental health costs rise, and it’s been a considerable concern for workplaces in Canada,” says Laura Pratt, National Director, Organizational Health, Workplace Benefits and Retirement, Canada Life. “And we see the downstream impact of mental health issues in our disability management practice.”
The ROI of prevention
Pratt participated in the recent Benefits Alliance Voice podcast, “Uncovering ROI in Mental Health Programs,” sharing data from Canada Life’s 2025 The cost of inaction report to illustrate the growing impact of mental health on benefits claims data. For example, short-term disability claims related to mental health grew from 17 per cent in 2014 to 27 per cent in 2024, and long-term disability claims grew from 29 per cent to 37 per cent. And mental illness accounts for 70 per cent of all workplace disability costs.
The Mental Health report further calculated that burnout costs employers $5,500 to $28,500 per employee per year, depending on the employee’s role (for example, senior executives carry the highest cost of $28,500). For a company with 500 employees, that’s an average of $3.4 million per year in lost productivity and salaries, the report found.
The good news is that organizations that prioritize the prevention of burnout see a significantly lower rate of burnout—30 per cent lower—than those that do not take preventative actions. They achieve $1.7 million a year in savings on average—or $3,400 per employee—and reap the benefits of improved productivity and mental health, as well as better workplace satisfaction overall.
The cost of inaction report notes that every dollar a business spends on mental health programs sees a return of $1.62, rising to $2.18 after three years. “I think everybody intuitively understands the benefits of a mentally healthy workplace,” says Pratt. “Engaged, productive and resilient workers have lower rates of absenteeism, disability claims and higher retention rates.”
A closer look
Just over half (55 per cent) of working Canadians find their workplace stressful. The results increase to 64 per cent among those with a diagnosed mental-health condition and to 80 per cent among those who feel they have a mental-health issue.
Despite employers’ efforts to help plan members with mental-health issues, surveyed employees still feel largely unsupported. Half of respondents (49 per cent) feel their employer promotes work-life balance, but only 20 per cent report this is always true. And just one in three (36 per cent) say their employer offers programs and policies to prevent burnout, with only 13 per cent saying this is always the case.
The organizations with lower rates of burnout were described as psychologically safe by employees. For example, they could speak freely about their mental-health challenges. “In a psychologically safe work environment, employees feel safe to speak up, to take risks, to be authentic, without fear of punishment or ridicule, and it’s really foundational to a healthy and productive workplace,” says Pratt.
Employers who fostered diversity, ensured manageable workloads, treated employees fairly and had supportive managers were also key factors in lower burnout rates. However, among surveyed managers, 33 per cent reported feeling unequipped to support employee mental health.
Among those who reported a positive impact from their company’s wellness program, nearly nine in ten (88 per cent) highlighted benefits that help balance work and personal lives, such as paid time off (vacation and sick days), personal days, and flexible scheduling.
Benefits Alliance thanks Canada Life, a platinum preferred solutions provider, for participating in this article and the Benefits Alliance Voice podcast, “Uncovering ROI in Mental Health Programs.“