Mental Health Challenges Affecting Employee Performance
Over the past years, recognizing that mental health is a major issue among employees has given rise to companies implementing programs to address this issue.
"The question is no longer whether mental health support exists, but whether it intervenes early enough and effectively enough to meaningfully improve lives,” says Jennifer Schulz, CEO of Lyra Health, in a statement in its new report, 2026 State of Workforce Mental Health, released on March 17.
The report, based on surveys of more than 500 benefits leaders and 7,500 employees across six countries, found that employees are experiencing gaps in the current mental health systems at their workplaces.
Key highlights of the survey are as follows:
- 1 in 3 employees say they’re merely surviving
- 1 in 4 say their mental health declined in the past year
- 7 in 10 benefits leaders say employee mental health challenges had a significant impact on employee performance over the last year
- 68% say mental health benefit use is increasing and demand is growing overall
- 65% report more mental health-related leave or disability
Mental Health Care Needs More Complex
The report found that 10% of employees now report having complex conditions, a 67% increase year-over-year.
More than one-third of employees report personal or family experience with serious conditions, including severe depression or anxiety, suicidality, eating disorders, and substance use challenges.
As complex conditions often require specialized care, many employees struggle to find the right path or disengage from care altogether.
More than half report difficulty finding specialty providers, appropriate inpatient or outpatient programs, or timely access to care—challenges that have increased sharply year over year.
How benefits break down for complex, speciality needs
- 56% struggle to find the right level of care
- 54% faced long waitlists
- 54% couldn’t find a specialist or specialty program
- 48% struggled to access care through their health plan
- 40% struggle to access care through their EAP.
The report notes that the gap between need and support widens, recovery becomes harder and organizational costs grow through lost productivity, leaves, and turnover.
Managers Struggling with Mental Health
Compared to last year, fewer managers say they have the autonomy, resources, or training to support employee mental health, according to the study. The managers said that they are expected to respond to mental health crises without adequate preparation.
The managers are feeling the strain, with 54% say that being a manager has negatively affected their mental health. And 48% have considered leaving their role due to mental health pressure.
“Managers have become the shock absorbers of organizational strain," said Joe Grasso, PhD, VP of Workforce Transformation at Lyra Health, in the report. "They’re expected to deliver results, support mental health, and absorb change, often without the authority to fix the conditions creating the pressure. That model isn’t sustainable.”