SME Mental Health

Mental health enables individuals to function well in life and at work. It is the foundation of wellbeing in both individuals and the community and is vital for success in the workplace.  People with good mental health will perform better at work and have increased capacity to cope with workplace stressors.

The World Health Organisation, 2001

It’s World Mental Health day on October 10th where people across the globe will come together to shed a positive light on Mental health including, education, awareness and advocacy initiatives.  We thought this would be a good opportunity to look into the mental health of Australian SMEs.  This article delves a bit deeper into what causes work place stress and mental health issues for SMEs, the cost of leaving mental health at work untreated, as well as some of the initiatives that are underway to assist.


Is workplace stress affecting your mental health?

Running a small business can be all consuming and stressful but it can be extremely rewarding and fulfilling too, something that sometimes gets lost during times of stress and high pressure.  In our experience, there has been many instances where we have helped a client overcome an area of anxiety (cash flow stress) and turn around their situation by regaining control of a major aspect of their business.  The stabilising effect of a solid cash flow position can really impact all areas of the business – including the stress levels of the business owner.

Stress of course, does sometimes have a place in keeping us at the top of our game, but according to the Black Dog Institute; “prolonged stress can negatively impact physical and mental health.”   And few business owners would be free from stress in the workplace.  Financial and business issues will be concerns, as well as personal risk (often business and personal finances are inextricably tied), as well as having a duty towards their employees.

Employees of small business in turn, may feel the pressure from having more invested in their role, they may feel they are more accountable for the overall success of the business than they would be working for a larger organisation.

No small concern

Small business, those that employ fewer than 19 people, make up 97% of businesses operating in Australia today.  SME’s are also an incredibly diverse sector, working across many different industries and locations.  Traditionally however, there has been little or no support for small business owners and employees despite mental health issues such as stress, anxiety and depression being on the rise.

“A happy workplace is a productive workplace. A mentally healthy business retains staff for longer and everyone knows what the business goals are which helps set realistic timeframes and expectations. When there’s a lack of communication, your business runs into problems”.

Kate Carnell

In 2016-17 $9.1 billion was spent on mental health services (or $375 per person, up from $359 per person in 2012–13).

In addition, an ABS study states that 45% of Australians between the ages of 18-85 will experience a mental health condition in their lifetime.  A sobering thought for many of us.  So, if mental health issues are indeed increasing and potentially becoming a bigger risk factor to small business, what can be done to manage it?

Firstly, let’s define workplace stressors

According to Marc Bryant, Acting Director of Everymind, a not for profit organisation currently working the Federal Government on mental health, financial stressors continue to emerge as a top concern for small business owners.

“It’s things like working in isolation, financial stressors and worrying about the impact of the business on others and letting down people that they’re working with,” he says.

Everymind research shows the top four factors found to be most stressful for business owners as being;

  • Obligation to work when unwell
  • Financial stress
  • Multiple responsibilities
  • Responsibility for employees.

Other factors that contribute to stress include;

  • Working long hours
  • Blurring of boundaries between home and work / poor work life balance
  • Working in isolation
  • Risk of business failure
  • Availability of support

Of those who took part in the Everymind survey, more than 85% said they take their job home and almost 80% said that work associated problems kept them awake at night.  This is sadly something we see time and again working with small businesses, particularly around financial challenges.

Financial stress as well as tax and super obligations form some of the biggest concerns for small business operators.  In many cases this comes down to cash flow, as despite their best intentions, businesses are sometimes unable to meet obligations when they arise.

Why is cash flow such a big deal?

An inquiry by the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell conducted last year, found Australian payment times as some of the ‘worst in the world’ with invoices paid on average 26.4 days late.

The inquiry uncovered a growing trend for large Australian and multinational companies to delay and extend payments from 30 days to 45, 60, 90 or even 120 days.  This can have a detrimental effect on small businesses for whom maintaining healthy cash flow is the key to their survival.  Not to mention the stress and anxiety that ongoing cash flow uncertainty can have on business owners’ mental health.

Long delays in the payment of invoices can mean the business is unable to meet day to day, tax or super obligations, pay their employees on time or take advantage of expansion opportunities to grow their business.

Compounding stressors

In addition to financial stress, other factors like having multiple responsibilities, the obligation to keep working when unwell and responsibility for employees contribute to the stress that small businesses owners feel – often impacting on their own their mental health.

Consider also the lack of support within the sector; feelings of isolation which may be down to geography or businesses size, feeling there is nowhere to turn for advice, shouldering business and family expectations, can see the problems really begin to compound.

What’s the cost?

Left untreated mental ill health can lead to significant costs for small businesses as they have less capacity and resources to absorb costs associated with lower productivity.

In addition, people may feel obliged to work despite health problems in order for the business to survive.  These may include managing multiple responsibilities and expectations such as employees – and also family in many cases.

Research by BeyondBlue estimates that untreated mental health conditions cost Australian workplaces approximately $10.9 billion each year in absenteeism, presenteeism and compensation claims.  This includes $4.7 billion in workers missing days of work, $6.1 billion in unwell workers still attempting to work, and $146 million in compensation claims.  According to the research, untreated depression results in more than six million working days lost across the country each year, while 12 million days are estimated to be lost to reduced productivity among staff.

Despite the size of the small business sector, compared to larger counterparts, few mental health programs have been designed specifically with small business in mind.  Reasons for this are usually that initiatives can be difficult to implement e.g. a lack of formal departments such as HR that may exist in larger organisations, time and logistical constraints, diversity of the sector including industry, location, age of staff and background diversity.

However, despite these challenges there are great deal of other factors that make small business an ideal setting for mental health programs e.g. limited bureaucracy in decision making, fewer employees can mean simpler implementation and the ability to create a more tailored / inclusive program.

What’s being done?

The good news is that we are starting to see significant investment by successive Governments into mental health services.  Last year for the first time the Government announced a $3.6million package specifically targeted at supporting small business owners and employees.

$3.6million package for small business
Last year the Minister for Small and Family Business, Skills and Vocational Education Senator Michaelia Cash announced a $3.6million package for mental health funding for mental health assistance for small business.

The vast majority ($3.1 million) of the funding package will be given to not-for-profit health advocates Everymind to expand their ‘Ahead for Business’ program trail, which launched earlier this year. Everymind has worked with the federal government over the past year to design the program that will give small and family business owners flexible, free and accessible support, helping them conduct screens or mental health checks around common stress sources.

$500,000 will also be spent on a nationwide government campaign to promote small business mental health awareness and a small business mental health roundtable will also be conducted to help develop future policy solutions, particularly for regional and rural business owners.

Productivity Commission
Announced late last year, the Productivity Commission inquiry into mental health is another important step forward.  The inquiry will examine the effect of mental health on people’s ability to participate in and prosper in the community and workplace, and the effects it has more generally on our economy and productivity.  It will focus on mental health as a productivity issue, not just a health issue.

ATO & utilities providers to negotiate terms
The ATO has recently expressed a commitment to addressing the impact that tax and super obligations have on the mental health of small business operators.

The ATO Deputy Commissioner noted that 790,000 payment plans were negotiated with small businesses in the 2017/18 financial year.  Further announcing initiatives to better support small business owners experiencing mental health issues including; training for frontline staff, a range of services to help businesses stay on track and improving the ability for businesses to negotiate, and establish payment plans for tax liabilities.

Other utilities and service providers such as Optus and Energy Australia say they’re also putting mental health front of mind on small business billing and say there is flexibility when small business owners struggle to fulfil commitments.


How to manage stress and anxiety in your workplace

For small business owners, addressing psychological health and safety or employee mental health concerns may seem at first seem time consuming and outside their expertise, but not addressing them could really have a wider impact.

“If you want to help improve the mental wellbeing of your employees, start by acknowledging them for their work. It’s important to also involve employees in the decision-making process and ensure there’s good communication across all levels.
“Small and family enterprises tend to work as very close units, which means there are regular opportunities to notice if someone is acting out of character. Ask them how they’re feeling, listen to them, and if they’re struggling, suggest they seek support or offer to help them arrange to talk to a professional.”

Kate Carnell, Small Business and Family Enterprise Ombudsman

The Black Dog Institute has developed a fantastic Workplace Mental Health Toolkit to help businesses maintain better mental health in the workplace.  Click on the ‘Five ways to wellbeing’ graphic below to read it.

Research has shown that taking care of mental health in small business is of paramount importance.  Small businesses are entrepreneurial by nature, they have to be agile and adaptable in order to succeed.  The need for mindfulness around mental health is very much a current issue for business and the wider community.  Small business has the opportunity to be at the forefront, investing in the mental health of the business to create a healthier, happier, more productive workplace.

If you are suffering from depression, anxiety or suicidal thoughts, or you’re worried about someone else and feel that urgent professional support is needed, contact your local doctor or one of the 24/7 crisis agencies below:

Lifeline: 13 11 14
beyondblue: 1300 22 4636

Business resources: