7.0 The Link Between Mental Health and Work Engagement

-

 


The world of banking is fast-paced and offers long hours of work with high pressure and competitive targets. However, banking employee engagement is becoming a strategic priority and a growing challenge. The conventional organizational structure unfortunately excludes mental health, which is now becoming a major contributor to motivation, productivity, and engagement. According to research, a mentally healthy employee is much more likely to be engaged, creative, and committed to their work, which many HR leaders have already realized.

The Influence of Mental Health on Employee Drive, Efficiency, and Involvement

Work engagement is when a worker shows a positive state of mind related to work that is fulfilling in nature and not negative (Schaufeli et al., 2002). Further, it is characterized by a worker’s vigor, dedication, and absorption. Poor mental health disrupts all three

Motivation

Conditions like depression or anxiety can lessen one’s intrinsic motivation and cause withdrawal behaviors. When employees burn out, they may no longer feel connected to goals or driven to do anything beyond the minimum.

Productivity

When an employee is mentally unwell, they experience mental exhaustion, concentration problems, and poor problem-solving ability. According to WHO (2024), depression and anxiety disorders cost around more than $1 trillion a year in lost productivity globally. 

Engagement

Emotional exhaustion, a key factor of burnout, has an adverse relationship with engagement. In high-pressure environments like banking, presenteeism, being present yet disengaged, can occur, which is more costly than absenteeism in the long run (Krekel, Ward, & De Neve, 2019).

Banks deal with millions of dollars daily, and a small error can lead to massive damage. Further, employees working under stressful and mentally fatiguing conditions increase the scope of human errors. It directly affects customer service, compliance, and brand reputation.

Notable Research Insights

Many studies say that mental health and engagement influence each other.

  • According to a Deloitte UK (2022) report, employees with good mental health were twice as likely to be highly engaged compared to employees undergoing mental distress. Also, every £1 spent on mental health initiatives returned between £2 and £5 in reduced absenteeism and improved productivity.
  • According to a Gallup investigation, employees with bad well-being have a 64% higher chance of being disengaged from their jobs (Harter, 2024). In industries such as financial services, disconnect is often linked to low client satisfaction and high turnover rates.
  • Research by the London School of Economics (Krekel et al., 2019) has shown that workplace well-being is a strong predictor of employee performance—a stronger predictor than pay or benefits! An increase in productivity of 12 % was detected for those with high well-being in knowledge sectors like banking.
  • As stated by the American Psychological Association (APA, 2023), 59% of workers said the mental health support offered by their employer significantly influenced their decision to stay with their job.

If banks overlook mental health issues, they risk jeopardizing performance, retention of staff, and ultimately, bank profitability. Conversely, the prioritization of mental wellness by banks creates a dedicated, engaged, motivated, and loyal workforce. In today’s competitive financial markets, investing in mental health is no longer just ethical; it’s strategic.


References List

·       Schaufeli, W.B., Salanova, M., González-romá, V., and Bakker, A.B. (2002). The measurement of engagement and burnout: A two-sample confirmatory factor analytic approach.  Journal of Happiness Studies, [online] 3(1), pp. 71–92. doi:https://doi.org/10.1023/a:1015630930326.

·  World Health Organization (2024).  Mental health at work. [online] World Health Organization. Available at: https://www.who.int/news-room/fact-sheets/detail/mental-health-at-work.

·  Krekel, C., Ward, G., and De Neve, J.-E. (2019). Employee Wellbeing, Productivity, and Firm Performance.  SSRN Electronic Journal, [online] 4. doi:https://doi.org/10.2139/ssrn.3356581.

·  Deloitte (2022).  Mental health and employers - the case for investment | Deloitte UK. [online] www.deloitte.com. Available at: https://www.deloitte.com/uk/en/services/consulting/analysis/mental-health-and-employers-the-case-for-investment.html.

·   Harter, J. (2024).  3 Key Insights Into the Global Workplace. [online] Gallup.com. Available at: https://www.gallup.com/workplace/645416/key-insights-global-workplace.aspx.

·   Apa.org. (2025). Available at: https://www.apa.org/pubs/reports/work-in-america/2023-workplace-health-well https://www.apa.org/pubs/reports/work-in-america/2023-workplace-health-well-being-being [Accessed 9 Apr. 2025].

Comments

  1. Madhavi JayasingheApril 14, 2025 at 11:03 AM

    This highlights a critical issue within the banking sector, the impact of mental health on employee engagement, productivity, and overall organizational performance. The research you’ve cited underscores the importance of addressing mental well-being, not just as a supportive measure, but as a strategic investment. When employees are mentally healthy, they are more motivated, engaged, and productive, leading to better performance and lower turnover rates.

    ReplyDelete
    Replies
    1. sadaniwijewickrameApril 14, 2025 at 11:59 PM

      Thank you very much for your sensitive and smart feedback! 💬 You have beautifully conveyed the heart of what I wanted to say: mental well-being is more than just being helpful, it is a strategic imperative for any firm seeking long-term success. I am delighted the findings resonated with you, and I was unable to disagree more: when employees are psychologically well, everything improves, including engagement and retention. Your reflections contribute so much to the conversation; thank you for taking the time to share them.

      Delete
  2. Kasuni SamaranayakeApril 14, 2025 at 10:08 PM

    You’ve captured the essence of why mental health is becoming a cornerstone of employee engagement in banking. In a high-stakes, high-stress industry, overlooking mental well-being can have ripple effects on everything from accuracy to customer satisfaction. The evidence is compelling—engaged minds perform better, stay longer, and contribute more. It’s refreshing to see research-backed arguments pushing mental health from a peripheral concern to a strategic priority.








    ReplyDelete
    Replies
    1. sadaniwijewickrameApril 15, 2025 at 12:05 AM

      Thank you very much for your nice and intelligent reply! I am delighted the message was apparent. Mental health is rapidly becoming the foundation of long-term participation in the financial sector. It is really true what you have written; ignoring well-being has a knock-on impact, especially in an arena where accuracy and customer engagement are so vital. Absolutely! It is encouraging to see that mental health is being recognized as a strategic priority. Thank you for sharing your opinions; they definitely add a lot to the conversation.

      Delete
  3. The Importance of Effective Employee Evaluation Process For BPOApril 15, 2025 at 7:22 AM

    Great insights on the link between mental health and work engagement in the banking sector! The research highlights a critical issue—mental health truly is the foundation of productivity, motivation, and engagement. The high-pressure nature of the industry often makes it difficult for employees to maintain a healthy mental state, and this can directly affect performance and overall business outcomes. It’s reassuring to see that organizations are beginning to recognize the importance of mental wellness programs, and the financial return on these investments makes a compelling case. Prioritizing mental health is not just the right thing to do; it’s a strategic move for banks to stay competitive and retain talent. Thanks for raising awareness about this crucial topic! (commented by Anuradha Gunasekara)

    ReplyDelete
    Replies
    1. sadaniwijewickrameApril 16, 2025 at 3:52 AM

      Thank you so much for your thoughtful feedback! You are correct; mental health is equally as important as any other issue in the banking sector. Great insight. When employees suffer from mental health issues, it not only impacts their own efficiency and productivity but also hinders their performance to qualify for promotions and other better opportunities.

      I'm happy to see that banks are investing in structured mental wellness Employee Assistance Programs (EAPs), stress management training, and flexible working more often (Barclays, 2022; HSBC, 2021). Just like any other investment, corporate sector programs for mental health and well-being also have returns. Deloitte (2020) found that the average return on investment was £5 for every £1 spent. When banks integrate mental well-being into leadership behavior and the overall practices of the organization, it not only protects the employee but also enhances engagement for the long term.

      Delete
  4. Nuwan Asanka 2020April 15, 2025 at 11:26 AM

    This article provides a comprehensive and thoughtful examination of the mental health challenges faced by employees in the banking sector. The connection between organizational stress and its impact on both personal well-being and company productivity is powerful. It’s clear that investing in mental health resources and promoting a healthy work-life balance is not just the right thing to do, but also a strategic move for long-term business success. A great reminder of how crucial it is to prioritize employee well-being for a sustainable future.

    ReplyDelete
    Replies
    1. sadaniwijewickrameApril 16, 2025 at 3:56 AM

      Thank you so much for your encouraging words! I'm really glad the article connected with you. I totally agree with you Stress in the banking organizations can cause disturbances in an individual's life and causes everything to be dysfunctional Following CIPD (2023), organizations that actively support mental health improve employee engagement and retention. Have flexible hours and check-ins to enhance work-life balance. When organizations do this, they see greater job satisfaction and lower burnout (Gallup, 2023; Roche, Haar, & Luthans, 2014). It’s not just about being kind; it’s also about establishing sustainable performance by being more caring.

      Delete
  5. Pawan AmayuruApril 16, 2025 at 4:57 AM

    This is a powerful and well-researched take on the link between mental health and employee engagement in banking. It clearly shows how mental well-being influences not just individual performance but also organizational success. In such a high-stakes industry, ignoring mental health can lead to costly errors, disengagement, and declining productivity. Banks must move beyond traditional structures and actively support employee wellness not just as a benefit, but as a core strategy for long-term stability and growth.

    ReplyDelete
    Replies
    1. sadaniwijewickrameApril 16, 2025 at 6:08 AM

      Thank you so much for your kind, flattering, and thoughtful reflection. You’ve really nailed the post. Mental well-being is not only a personal issue, it is actually a strategic lever for organizational success. You are absolutely right. The stakes in banking are indeed very high, and mental fatigue can very well impact decision-making, compliance, and trust. Studies have shown that improving performance focuses on well-being. For instance, a report by the Chartered Institute of Personnel and Development (CIPD, 2023) has noted that organizations dedicated to mental health have improved engagement and retention rates. It is obvious that helping the employee in wellness should be part of the core business strategy and not an add-on. Thank you again for your valuable input.

      Delete
  6. Lakshan AbeysekaraApril 17, 2025 at 10:48 PM

    It is now imperative for the banking industry to prioritize mental health in order to increase employee engagement, productivity, and retention. According to research, workers who are in good mental health are more driven, devoted, and concentrated, which eventually improves output and lowers turnover. Banks can develop a more committed and productive staff that benefits the company and its employees by making investments in mental wellbeing.

    ReplyDelete

Post a Comment

Popular posts from this blog

01. Introduction

-
Image
  The banking sector is a major component of the global economy, facilitating financial transactions, investments, and economic stability. Nonetheless, the organized structure and customer-service-oriented behavior of the banking sector do not fail to mention that its professionals have to work under pressure, and it impacts them adversely, affecting their mental health and well-being overall. Stress and tiredness as a result of extended working hours , regulatory limitations, and customer expectations affect work engagement and productivity (Deloitte, 2021). "Licensed Commercial Banks (LCBs) and Licensed Specialized Banks (LSBs) make up the banking industry in Sri Lanka, which controls the financial system and holds the largest portion of its total assets" (CBSL, 2020). The Central Bank of Sri Lanka (CBSL) has authorized a total of six licensed specialized banks and twenty-four licensed commercial banks in the country. Banks play a major role in the financial system in Sri L...
Read more

6.0 Employee Well-Being Initiatives in Banks

-
Image
As mental health and well-being become critical to workforce sustainability, the banking industry is realizing the importance of employee well-being. Many banks have taken the systematic measures to improve the emotional, physical, and psychological well-being of employees, as a healthy mind gives an engaged worker who performs better if we talk about banks performance. Examining Current Well-Being Programs and Policies in the Banking Sector Banks are taking a broad approach to well-being, focusing on mental health, alternate work arrangements, financial well-being, and well-being initiatives, among others. Two of the remarkable trends are that the discussion surrounding mental health is normalized and mental health support services are part of employee benefits packages. For example, numerous banks have begun providing EAPs, which offer counseling services that are confidential, mental health assessments, and crisis intervention. Deloitte’s Mental Health and Employers report (2022) sa...
Read more

8.0 Role of Leadership and Management

-
Image
  Leadership and management play a significant role in shaping employees' well-being and mental health, a fact that is especially true in the banking industry. Today’s financial landscape works a lot faster than it did a few years ago. The effect of leadership can have significant results on employee engagement. Consequently, everything is dependent on workplace culture, support, and wellness interventions in today’s world. Leaders and managers can create an environment conducive to the mental health of employees. They play an important role in maintaining the balance between the organizational needs and individual needs. The Role of Managers in Fostering a Supportive Work Environment Banking sector managers play an important part in experiencing employees on a daily basis. A good work environment is where there are open conversations, psychological safety, respect, and recognition. Managers are the first contact for most employees if they are stressed or burnt out, so their awaren...
Read more