Supporting Employee Mental Health During Economic Uncertainty
March 20, 2025
SEB Marketing Team
Unlocking Employee Potential with Government Support
employees are struggling with financial anxiety, fear of job loss, or general economic stress, their wellbeing and productivity inevitably suffer. Business leaders and HR professionals have a responsibility to support their teams through economic challenges. Here’s how you can take meaningful action to help your workforce manage emotions and sustain productivity in uncertain times while maintaining organizational resilience.
Recognize the Warning Signs
A recent data study from the Mental Health Commission of Canada found that 84% of Canadian employees reported increased stress levels during economic downturns, with 61% stating that financial concerns directly impacted their performance at work. It’s important to note that mental health claims now represent the fastest-growing category of disability costs for Canadian employers.
Before solutions can be implemented, leaders need to recognize when employees are struggling. According to the Centre for Addiction and Mental Health (CAMH), economic stress often manifests in the workplace through increased absenteeism, reduced productivity, heightened sensitivity to feedback, withdrawal from team interactions, and increased workplace conflicts.
Having managers trained in mental health first aid can be key to recognizing these important early warning signs as they require proactive intervention. A 2022 study from the Canadian Psychological Association found that organizations with managers trained to recognize mental health warning signs experienced 34% fewer disability claims related to anxiety and depression. Early intervention matters, and it starts with awareness.
Create Psychological Safety
Economic downturns are inevitable, but many employees often hesitate to express concerns with stress and anxiety, for fear of being seen as less capable, or worse, at risk of layoff. Silence exacerbates the struggle and leads to disengagement and burnout.
Organizations that foster an environment where employees feel comfortable discussing challenges without fear of judgment see significant improvements in mental health outcomes, according to research from the Canadian Centre for Occupational Health and Safety. Practical steps to build psychological safety include:
- Transparent communication about company financial status and plans
- Regular one-on-one check-ins focused on wellbeing, not just performance
- Training managers to respond supportively to mental health concerns
- Leadership modelling healthy stress management and work-life boundaries
Enhance Your EAP and Mental Health Benefits
One of the most valuable resources for an employee might be one they don’t even realize they have. Employee Assistance Programs (EAPs) are offered by 84% of Canadian employers but only about 18% of employees actively use these services during economic stress periods. Communication around this option is important.
Other options by forward-thinking organizations include offering direct access to virtual therapy, providing financial counseling services, creating mental health days that don’t count against sick leave, implementing stress management training, and ensuring employees know how to access these benefits. Companies that upgrade these mental health benefits often see a direct correlation to the reduction of stress-related productivity losses.
Train Managers as Mental Health Allies
As stated above, managers are your most important mental health resource. However, this resource cannot be utilized if a manager feels inadequately prepared to support employee mental health during economic difficulty.
Effective manager training should include:
- Recognizing signs of financial stress and anxiety
- Having supportive conversations about mental health
- Making appropriate referrals to company resources
- Creating reasonable accommodations when needed
- Balancing productivity expectations with compassion
Implementing Financial Wellness Initiatives
Economic anxiety is often linked to personal financial struggles as many workers live paycheck to paycheck and are not equipped to handle emergency situations. Financial wellness programs and access to platforms can alleviate this stress by offering workshops on debt management, financial counseling services, flexible pay options, tailored financial literacy resources, and emergency loan programs. Knowing how to better manage your money lowers stress levels, and empowers employees, demonstrating the value of these programs regardless of income level.
Foster Community and Connection
During economic uncertainty, employees may withdraw due to stress or embarrassment about financial struggles. However, social connection is one of the strongest protective factors against anxiety and depression. Building workplace connections can be as simple as creating peer support groups, organizing team activities that don’t require financial contributions, establishing mentorship programs, and facilitating open discussions where employees can share experiences and coping strategies. Research shows that workplaces with structured connection programs see a 34% improvement in employee wellbeing during economic downturns.
Economic uncertainty presents challenges for both employees and organizations. By proactively implementing key mental health strategies and practises including recognizing warning signs, creating psychological safety, enhancing mental health benefits, training managers, supporting financial wellness, and fostering connection you can help your team navigate difficult times while maintaining productivity and engagement. Organizations that prioritize mental health support during challenging economic periods recover faster, retain key talent, and build the resilience necessary for long-term success.