Mental Health at Work: A Strategic Priority for Businesses in India

Workplace dynamics have evolved globally, to which a key part is addressing the mental health of the employees. While the trend is at its initial stage, many companies have taken notes on engaging with the employees on their psychological well-being, a measure that can assist companies with workplace efficiencies and long-term employee retention.

India is home to the largest youth workforce in the world. Latest observations indicate that business entities in the country are engaging in conversations on employee mental health concerns, keeping aside the taboo on the subject.

The rising focus on mental health in India is largely shaped by a new generation of professionals who are prioritizing overall well-being over conventional motivators like compensation. Industry experts emphasize that for a long term impact, organizations in India must adopt a strategic, long-term vision that embeds mental health into the foundational culture of the workplace.

As awareness around mental health continues to grow—particularly within professional settings—discussions around the subject have gained substantial traction. According to a 2022 Deloitte survey, nearly 80 percent of Indian employees reported facing mental health challenges in 2021. Additionally, 47 percent indicated experiencing stress or anxiety in the workplace.

Identifying the common factors behind mental health issues at work

While organizations tend to prioritize the managerial, operational, and technical capabilities of their employees, mental health often remains an overlooked aspect. A combination of factors is contributing to the growing mental health challenges in Indian workplaces:

1. Extended working hours, stringent deadlines, and increasingly blurred lines between professional and personal life are major contributors to chronic stress and burnout. Many employees face difficulties maintaining a healthy balance, which adversely affects their mental well-being.

2. Workplace marked by micromanagement, excessive pressure, and workplace harassment or bullying can have a profound negative impact on employee mental health. These toxic dynamics can damage individual well-being, erode team morale and reduce organizational productivity.

3. Despite the enactment of the Mental Healthcare Act in 2017, widespread societal stigma surrounding mental health continues to hinder open dialogue and support in India. The Indian Classification of Mental Disorders (ICMD) diagnostic guidelines has limited implementation in professional settings, reflecting a broader lack of awareness and institutional support for mental health concerns at workplace.

Organisational impact of neglecting employee mental health

Failing to address mental health concerns in the workplace not only affects individual employees but also pose significant risks to organizational performance and sustainability. The consequences of poor mental health at work include:

• Reduced productivity: Employees experiencing conditions such as stress, anxiety, or depression often struggle to perform optimally. This can lead to diminished focus, lower efficiency, and a decline in innovative thinking.
• Increased absenteeism and presenteeism: Mental health challenges frequently result in higher absenteeism, as employees may take time off to cope. Equally detrimental is presenteeism—when individuals are physically present at work but mentally unwell or disengaged—which silently erodes productivity over time.
• Lower employee retention rate: A workplace that lacks adequate mental health support or fosters a toxic culture may drive high-performing employees to seek opportunities elsewhere. It not only disrupts team dynamics but also increases recruitment and training costs.

Integrating mental health into CSR and business responsibility frameworks

Under the Companies Act, 2013, companies in India are encouraged to incorporate mental health initiatives within their Corporate Social Responsibility (CSR) strategies. This not only supports employee well-being but also enhances stakeholder trust and aligns with evolving expectations in a socially conscious business environment.

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CSR funding can be strategically directed toward mental health awareness through workshops, campaigns, and training programs. These initiatives play a key role in dismantling stigma, fostering open dialogue, and encouraging early intervention. Beyond awareness, companies can invest in professional counselling services, Employee Assistance Programs (EAPs), and digital wellness platforms, creating accessible support systems for employees. CSR can also extend its impact through community-based mental health initiatives by partnering with Non-governmental organization (NGOs), educational institutions, and healthcare providers. Such outreach strengthens community engagement and enhances brand reputation.

In 2018, India’s Union Ministry of Corporate Affairs’ released a comprehensive guideline titled National Voluntary Guidelines on Social, Environmental, and Economic Responsibilities of Business, reinforcing the role of businesses in promoting employee well-being. Within the dossier, under Chapter 2, Principle 3 of the guidelines urges companies to uphold dignity, ensure equality, prevent harassment, and create safe, inclusive workplaces across all employment categories—including contract and home-based workers.

The document suggests maintaining fair recruitment practices, enabling grievance redressal, supporting work-life balance (especially for women), offering skill development opportunities, and ensuring workplaces are physically and mentally supportive. It further notes that the guidelines, along with CSR initiatives, can collectively position mental health as a vital component of responsible and sustainable business conduct.

ALSO READ: Managing CSR Obligations in India: Company Best Practices

Legal framework supporting employee mental health in India

India has made notable progress in recognizing and protecting employee mental health through various legal frameworks and policy measures. These provisions aim to promote mental well-being, uphold employee rights, and require organizations to cultivate safe, inclusive, and harassment-free workplaces. Some of the key legal instruments are outlined below:

Mental Healthcare Act, 2017 (MHCA)

The Mental Healthcare Act, 2017, protects the rights of individuals with mental health conditions and ensures access to appropriate mental healthcare services. Key provisions include:

• Right to mental healthcare: Chapter 6 of the act guarantees affordable, accessible, and quality mental health services for all individuals.
• Confidentiality and privacy: Employers and healthcare providers must safeguard the confidentiality of an employee’s mental health information.
• Non-discrimination: The act prohibits discrimination in employment, education, and healthcare based on mental health conditions.

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013—POSH Act

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The act, introduced in 2013, is specifically designed to prevent and address sexual harassment of women in professional environments. It broadly defines harassment to include verbal, physical, and psychological forms. Under the POSH Act, organizations with 10 or more employees are mandated to establish an Internal Complaints Committee (ICC) to investigate and resolve complaints.

Factories Act, 1948 (with Occupational Health Amendments)

While the Factories Act primarily focuses on physical safety, it also includes provisions that indirectly support mental health. The law mandates employers to maintain safe and healthy workplaces to mitigate both physical and psychological hazards. It also regulates working hours and rest periods to prevent overwork, burnout, and mental fatigue.

Constitutional safeguards

The Constitution of India provides fundamental rights that contribute to mental well-being in the workplace:

Article 21: Guarantees the right to life and personal liberty, which includes access to healthcare and mental well-being.
Article 14: Ensures equality before the law and protection from discrimination, including on mental health grounds.
Article 42: Directs the state to secure just and humane working conditions, supporting both physical and mental wellness.

Global practices in workplace mental health

Several countries have implemented impactful strategies to enhance mental health in the workplace, offering valuable lessons through policy innovation and collaborative efforts. In the United Kingdom, an independent analysis namely Thriving at Work review, published on October 26, 2027, sets six core standards for mental health in organizations in the country, including training managers and promoting open dialogue in organizations.

Australia launched the Mentally Healthy Workplace Alliance and Heads Up campaign in May 2014, equipping employers with tools and training to boost the well-being of employees and improve productivity by reducing absenteeism.

In 2013, Canada introduced the National Standard for Psychological Health and Safety in the Workplace, promoting risk assessments and Mental Health First Aid (MHFA).

European country such as Sweden legally mandates under the Work Environment Act that employers prevent work-related stress and promote work-life balance. The measure introduced in 2020, is a national work environment
strategy for Sweden from 2021 till 2025.

Similarly, Germany mandates psychological risk assessments under the Occupational Safety and Health Act and promotes Employee Assistance Programs (EAPs) and supervisor training. These measures were introduced to reduce workplace stress and improve early intervention.

In 2014, Singapore integrated mental health into its Total Workplace Safety and Health (TWSH) framework, using workshops, counseling, flexible work policies, and EAPs.

Key takeaway

Promoting mental health in the workplace is both a strategic imperative and an ethical responsibility. As awareness increases, the adoption of supportive policies and a culture that prioritizes mental well-being can significantly enhance workplace inclusivity, productivity, and employee satisfaction.

By embedding mental health considerations into organizational frameworks—through legal compliance, proactive awareness, and targeted support—businesses can foster a resilient and engaged workforce, ultimately contributing to sustained success and a positive work environment.

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