How to Support Mental Health in Times of Financial Uncertainty

Mental health is not a personal issue confined to off-the-clock hours; it’s a bottom-line business concern, and employers are feeling the heat. Work-related stress costs U.S. businesses up to $300 billion annually, according to The American Institute of Stress.

As economic uncertainty deepens due to tariffs, inflation, and policy shifts, employers are making difficult budget decisions. Raises are being delayed. Teams are shrinking. Benefits are undergoing review. While these moves may be necessary, they risk worsening the conditions driving employee stress.

Why Cuts to Pay and Staffing Could Backfire

SHRM data shows that employees already identify pay and understaffing as leading sources of workplace stress — and these two areas are often hit first during budget cuts. Today’s financial pressures are pushing organizations to freeze hiring, delay raises, or reduce benefits. But these moves, while fiscally motivated, often backfire. By amplifying the very conditions driving burnout and disengagement, they lead to productivity loss and attrition, eroding any short-term gains.

When Cost-Cutting Undermines ROI 

Financial pressures have long affected employee well-being, but today’s economic climate is making it worse. Only 47% of U.S. workers feel optimistic about the labor market, according to SHRM’s April Current Events Pulse Survey, down from 61% in January 2025. Nearly half of workers (49%) reported that the current state of the economy has negatively impacted their mental health — placing their retention, engagement, and overall performance at risk.

This drop in confidence is paired with a troubling lack of support. While 92% of company leaders believe they offer the financial tools and guidance employees need to reach their life goals, just 52% of employees agree, according to data from financial wellness provider BrightPlan.

That disconnect already costs businesses billions, and the stakes are only getting higher. Even before this recent wave of financial stress and pessimism, employers lost over seven hours of productivity per employee weekly due to money-related stress. That translates to $183 billion in annual losses.

When workers are anxious about their finances and lack the tools to change their situation, performance declines. Without meaningful support, cost-cutting measures like reduced pay or scaled-back benefits can push stress even higher, turning temporary savings into long-term losses.

Strategies for Protecting ROI and Well-Being

Avoiding short-term cuts and investing in financial wellness is a smart first step — it targets the $183 billion in lost productivity linked to employee financial stress. But that’s just one part of the equation. Employers must further address the mental health challenges affecting retention, engagement, and workplace culture.

• Reinforce and Clarify What’s Already Available 
  Most employers offer core mental health resources, but they’re often misunderstood or underused. With benefits communication still falling short, organizations should consider reintroducing existing offerings through email, team meetings, or a centralized hub to eliminate confusion and improve uptake.
• Audit the Culture for Hidden Barriers 
  Policies designed to support mental health on paper mean little if daily practices discourage their use. Ask: Are employees penalized formally or informally for taking time off? Are workloads adjusted after burnout is flagged? When everyday behavior reinforces official policies, employees are more likely to take full advantage of mental health resources such as paid time off.
• Equip Teams with Mental Health Training 
  Recognizing a mental health concern is one thing; knowing how to respond is another, and most employees aren’t equipped to do either. Only 12% of workers say their employer has someone onsite who has received mental health training, according to the American Psychological Association. Expanding mental health training across roles, not just for HR or leadership, can help build a workplace where people feel safe asking for help — and feel supported when they do.
• Close the Gap Between Action and Insight 
  Many employers believe their mental health initiatives make a positive difference, but few measure whether that’s true. Tracking doesn’t need to be complex or expensive. Monitor benefit usage, absenteeism, and employee sentiment, and calculate turnover to build a base line. Use short pulse surveys or informal check-ins to gather additional context.  

Often, small adjustments — such as tweaking benefits timing, delivery formats, or internal messaging — can improve participation and outcomes without adding cost. Building a simple feedback loop allows organizations to learn what’s effective, make changes quickly, and demonstrate impact to leadership, securing investments in future mental health resources.

Mental Health Is a Business Strategy

Employers don’t need to choose between protecting their bottom line and supporting employee well-being; the two are deeply connected, with employers seeing a $4 return for every $1 spent. In times of economic pressure, the most resilient organizations invest in people.

With intentional communication, culture audits, basic training, and ongoing feedback loops, companies can strengthen mental health without increasing spending to preserve performance, engagement, and trust when it matters most.