Why Mental Health and Well-Being Should Be Your Top Recruitment and Retention Priority Today's employees are seeking understanding, support and flexibility within their roles — and they will leave employers who don't give it to them. Here's what business owners and entrepreneurs need to know.

Employers across the nation are struggling to attract and retain top talent, and it seems no business is immune. Recruiting and retention have always been challenging in competitive labor markets, but the Covid-19 pandemic added even more barriers for employers to overcome. It can be disheartening, especially for those who were already struggling to find quality candidates. But it doesn't have to be.

When a business is struggling to attract or retain talent, it's because they're not meeting the expectations of today's workforce — and that's something that can be fixed. Rather than feeling lost or giving up hope, businesses can accept the challenge for what it is: an opportunity to reconsider their talent management strategies to better align with candidates' values, needs and priorities in the wake of considerable and collective trauma.

One-way employers can show their commitment to supporting employees through difficult times is by offering robust mental health and well-being benefits to everyone.

Related: How to Attract and Retain Top Talent

Focus on employee mental health and well-being

Saying that the Covid-19 pandemic has been hard on people isn't groundbreaking. Isolating from others, carrying fear about the well-being of loved ones and adjusting to a new way of viewing the world and our place in it were all stressful — and that list only scrapes the surface of what we all endured over the past few years.

According to the Paychex 2021 State of Mental Health in the Workplace Report, 43% of employees said their mental health was worse in 2021 than it was before Covid-19. The survey found that 20% of workers surveyed reported increased depression while 31% said their anxiety had increased. Furthermore, between 20% and 24% reported decreased enthusiasm, focus and motivation.

In the same report, respondents cited the numerous stressors they've encountered throughout the past year. These included health concerns (like exhaustion), financial stressors (like reduced salaries and looming medical bills) and emotional strain related to isolation from loved ones. Those added pressures have, understandably, spilled over into the workplace.

According to the 2022 Paychex Pulse of HR Survey, businesses are noticing the effects of Covid-19 on their workforces. A total of 60% of HR leaders said they're concerned about employee burnout — a significant increase (18%) from pre-Covid numbers. These respondents also noted how competitive hiring environments compound that stresses on employees. In the survey, one-third of respondents said compensating for staff shortages plays a role in employees' additional stress.

The State of Mental Health survey supports the correlation between personal stress and business performance. When asked about the perceived impacts of mental health challenges key metrics, respondents noted declines or anticipated declines in:

• Revenue (40%)
• Profitability (39%)
• Morale (30%)
• Output (26%)
• Competitiveness (20%)

Furthermore, 30% noted a perception that mental health challenges can lead to losing customers.

Related: 5 Simple Ways to Do More for Your Employees' Mental Health This Week

The benefits that benefit everyone

1. Health and well-being

The best approach to meeting the needs of the modern workforce is one that takes into consideration the physical, mental, social and financial well-being of employees. Respondents in the State of Mental Health Survey had an interest in a wide range of benefits that support mental and physical health and well-being. The top benefits cited included employee-specific professional development plans, flexible scheduling options, employee progress and goal-tracking solutions, health maintenance programs and programs that offer referrals for behavioral health or substance use disorders.

The 2022 Paychex Pulse of HR Survey found that organizations have increased their benefits by an average of 22% compared to before the Covid-19 pandemic. The number of employers offering health insurance has increased from 61% before the pandemic to 72% today. When considering benefits that offer workers more flexibility, the increase is even more significant. Today, 61% of employers offer remote or hybrid work options compared to just 27% in 2019, and 56% offer flexible schedules today compared to 37% in 2019.

The changes help, too. According to a 2021 Paychex and Future Workplace survey, 62% of workers strongly agree or agree that employee well-being support and benefits are a top priority when applying for or considering their next job. It seems like they mean it, too. The Paychex 2021 State of Mental Health in the Workplace Report found that 66% of respondents reported feeling better about their employer after using a benefit, and the same report found that companies offering mental health benefits were five times more likely to have improved retention since the Covid-19 pandemic began than those who do not.

Related: 4 Critical Areas That Add Up to Employee Well-being

2. Workplace flexibility

What was first introduced as a necessity is now a top benefit that is drawing candidates into new roles or encouraging them to stay in current ones. In a recent joint survey with Future Workplace, Paychex found that more than one-third (35%) of all respondents ranked flexibility in work hours and schedule as the No. 1 reason they'd be more likely to stay at their organization long-term, while 70% ranked it among their top three.

The Paychex 2021 State of Mental Health in the Workplace Report found the two most-implemented new benefits in response to business challenges posed by the Covid-19 pandemic were the options to work remotely and have a flexible schedule. This is especially true for younger workers. A Paychex and Future Workplace survey found that 43% of millennials and 44% of Gen Z-ers said flexibility in work hours was a reason to stay loyal to their employer.

3. Employee experience

While recruiting new talent is important, businesses also need to look at their current employee pool and elevate the employee experience to retain their current workforce and create a strong network of loyal employees through training and development, upskilling and awareness of generational changes and preferences. In the 2022 Pulse of HR survey, employers hoping to improve employee experiences said they're focusing on:

• Emphasizing work-life balance as a part of their company culture (31%)
• Encouraging managers to be clear in their expectations (29%)
• Creating confidential channels through which employees can communicate questions or concerns (26%)

Comprehensive and thoughtful diversity, equity and inclusion (DEI) initiatives can also improve employee experiences while supporting mental health in the workplace. When employees of all backgrounds feel accepted, supported, heard and welcome, it fosters more positive work environments — and that leads to improved operations. A Paychex DEI research report found that younger employees place a larger emphasis on working at a company with a diverse workforce. A total of 57% of Gen Z-ers and millennials say it is extremely or very important for them to work at a company with a diverse workforce, compared to 52% of Gen X-ers and just 27% of baby boomers.

Related: A Work-Life Balance Will Help You Keep Employees

Looking ahead

Today's workforce has been molded by the shared experiences of the past two years. Employers must take the opportunity to reshape the way business is done and evaluating your mental health and wellness benefits is no exception. Employees are looking to be treated as whole people, not just workers. They are seeking understanding, support and flexibility within their roles — and the trends say they will be able to find it. It's up to each employer to make sure their employees have access to the support they need to perform at their best.