Employee Mental Health in Workplace: Still Declining in 2025

1 Why Even Data-Rich Companies Cannot Reverse the Slide

Mental health and work has been a topic for years. You’ve seen the dashboards. The pulse surveys, the mental health solutions, promising resilience, calm, and “thriving employees.” Yet, beneath the surface of all this real-time insight, one thing isn’t improving: employee mental health in the workplace.

Despite unprecedented access to biometric feedback, engagement analytics, and AI-enhanced HR solutions, mental health-related productivity losses are still rising. According to the World Health Organization, anxiety and depression cost the global economy over $1 trillion each year in lost productivity, with 12 billion workdays vanishing annually¹. Meanwhile, Gallup’s 2025 report shows global employee engagement has dipped again to 21%, its second decline in the past decade². Only one in three workers describe themselves as “thriving.”

For all the talk about optimization, personalization, and data-driven wellbeing, the most important metric is moving in the wrong direction: how people actually feel at work. Many already use AI therapist tools, but AI wellness hasn’t yet reached mainstream.

This article explores the reasons behind the apparent paradox: Why is workforce mental health still in decline even as companies measure more than ever? What mental health challenges in the workplace are going unaddressed? Why should mental health be a priority? And most critically, what measures can organizations take to improve employee mental health in a meaningful, sustainable way?

Let’s examine where the disconnect begins.

2 The Mental Health Mirage in the Modern Workplace

The phrase employee mental health in the workplace has become a strategic talking point, featured in boardroom slides, HR campaigns, and LinkedIn updates. Companies invest in dashboards, surveys, and AI tools to project a people-first culture.

But the results la, and the reality is more complex.

As of 2025, mental health metrics are trending downward across industries. Burnout is no longer a crisis; it is becoming a baseline. A recent analysis by the CDC’s NIOSH division found that job-related stress is now the most frequently reported workplace hazard, and mental health concerns rank among the top reasons employees miss work³. Nearly 1 in 4 employees have considered quitting over mental health struggles, and 7 percent already have⁴.

Even in companies with robust analytics, mental health solutions, and EAPs in place, the experience on the ground remains fragmented. As Johns Hopkins University notes, workplace culture is often at odds with the mental health initiatives it claims to support⁵. People are encouraged to speak up but fear judgment. Managers are tasked with supporting others, yet often receive no support themselves.

As a result, mental health at work statistics show a credibility gap between corporate messaging and lived experience

3 How Does Mental Health Affect Work Performance

Poor mental health directly impacts an employee’s ability to concentrate, solve problems, communicate, and perform consistently. Depression alone reduces cognitive performance by 35 percent, and employees with severe depressive symptoms miss an average of 27 workdays per year due to illness and absenteeism⁶.

But the greater loss happens when employees show up while unwell. Presenteeism—being physically present but mentally depleted—accounts for over 80 percent of the productivity loss tied to mental health⁷. Anxiety, stress, and burnout impair executive functioning, delay decision-making, and increase error rates across all roles, from customer service to leadership.

It’s not just an individual cost. Businesses with high levels of untreated workplace stress experience higher turnover, lower engagement, and weaker team cohesion.

These mental health and productivity losses ripple across KPIs: turnover, error rates, customer satisfaction, and ultimately profit.

4 Mental Health Challenges in the Workplace

The most common mental health challenges in the workplace include chronic stress, anxiety, depression, and burnout. These issues often stem from workload pressure, lack of autonomy, toxic management, and blurred work-life boundaries. In many cases, even when resources exist, employees hesitate to use them for fear of negative career consequences.

Frontline workers and middle managers are particularly vulnerable. They face high expectations without adequate support, leading to emotional exhaustion and disengagement. This undermines both employee wellbeing and organizational stability.

5 Mental Health in Business

Mental health in business refers to how psychological wellbeing influences the performance, culture, and resilience of an organization. It’s no longer viewed as a personal issue but as a strategic factor that affects everything from productivity and retention to innovation and risk management.

When corporate mental health is poor, businesses suffer hidden costs: absenteeism, presenteeism, turnover, and reduced team cohesion. As highlighted by Berkeley Executive Education, leaders often underestimate how deeply culture and emotional wellbeing shape business outcomes¹¹.

Yet, instead of treating mental health as a foundational element of business design, many companies still see it as a benefits add-on.

Improving Mental Health in Business with AI and Culture Shift

Improving mental health in business goes far beyond slogans. It starts with systems. This includes redesigning workloads, training managers, and creating a culture where asking for help doesn’t feel like a risk.

AI solutions then help translate policy into daily practice.

• Real-time support: Earkick’s conversational AI offers anonymous check-ins, trend visualisation, and just-in-time nudges, giving employees help exactly when they need it.
• Early gains: A cross-sectional survey of nearly 40,000 Earkick users showed a 32% reduction in self-reported anxiety and a 34% rise in mood within the first six months of regular use¹¹.
• Long-term impact: A longitudinal analysis of 421 consecutive check-in days found mood scores increasing 25.7% and anxiety scores dropping 56.5% among persistent users; the first 90 days already delivered a 12.3% mood lift and a 28.5% anxiety decline¹².
• Actionable insight: Because the AI measures emotion, behaviour, and context in real time, it flags risk sooner than quarterly surveys and prompts micro-interventions that compound over time.

Taken together, these data illustrate how AI can bridge the gap between insight and action, provided leadership tackles structural stressors in parallel. When technology, culture, and job design align, positive mental health at work becomes sustainable rather than aspirational.

What measures can organizations take to improve employee mental health?

6 How to Improve Mental Health in the Workplace

Supporting mental health in the workplace means organizations must go beyond offering benefits. They need to start redesigning how work is experienced.

The CDC’s NIOSH model outlines a hierarchy of controls for workplace mental health that begins with systemic change. This includes reducing excessive workload, clarifying roles, and ensuring psychological safety. These adjustments have a far greater impact than one-off wellness campaigns³.

Training managers is another key step. According to Axxel HR, when managers are equipped to recognize signs of distress and respond with empathy, employees are more likely to seek help and stay engaged⁹.

Access also matters. Spring Health and Forrester found that 36% of employees cannot easily use the mental health benefits available to them, often due to complex systems or stigma¹⁰. Companies must streamline access and communicate clearly that support is safe and encouraged.

AI-based tools like Earkick play a growing role in bridging the gap between insight and action. By providing always-available support, real-time mood tracking, and proactive nudges, they help normalize daily mental health check-ins. This is especially effective for employees who avoid traditional resources due to fear or time constraints.

In short, supporting employees with mental health problems requires structural support, cultural permission, and easy access to timely help.

7 Turning Insight into Action

Data without action is inertia. To make employee mental wellbeing a competitive advantage, organizations must shift from metrics to meaningful change—redesigning work, upskilling leaders, and leveraging AI for continuous, stigma-free support. Only then will positive mental health at work become a lived reality rather than a dashboard metric.