Absence Matters: Mental Health and Shifting Demographics

Jai Hooker@Work

The Evolution of Mental Health and Shifting Demographics

By Charlie E. Woosley IV, Vice President Analytics, Sedgwick

Mental health issues have long been a driver of short-term disability. As far back as 2013, mental health claims were the fourth leading cause of short-term disability behind pregnancy, musculoskeletal, and fractures/sprains.1 Current trends show mental health overtaking musculoskeletal as the top non-pregnancy diagnostic group, with the gap tightening between number one and number two. As of November 2023, mental health claims accounted for 12.6% of new short-term disability claims compared with 7% in 2013.1  

To fully understand this change, we should step back and understand the larger workforce demographic shift that has occurred during the last 10 years. Baby boomers, born between 1946 and 1964, are retiring. Thousands of baby boomers are reaching retirement age each day, with the youngest turning 60 in 2024 and all reaching 65, the traditional retirement age, by 2030.2 Studies show that baby boomers put the lowest priority on mental health compared with all other generations in the workforce, while millennials, born between 1977 and 1995, put the highest priority on mental health when looking for jobs.3  

In 2013, data1 shows 40.3% of all new mental health claims were reported by millennials. This is higher than baby boomers (22.1%) and generation X (37.4%), despite the fact that millennials were the smallest of those generations in the workforce at the time.4 As of September 2023, there were more than 49 million millennials in the workforce, who accounted for 39.1% of the total labor force. By comparison, 61.6% of all new mental health claims received through November 2023, were for employees who fall into the millennial generation. Baby boomers on the other hand, accounted for 6.6% of new mental health claims in 2023, which falls behind both generation X (21.9%) and generation Z (9.9%). 

The Bureau of Labor Statistics projects4 that by 2029 millennials and generation z will account for nearly 75% of the labor force. Based on the current rates of mental health claims, it is estimated that more than 90% of claims in 2029 and beyond will be filed for employees in these two generations.  

The good news is that these employees are open to talking about mental health and what they expect from their employers. And in order to retain and attract employees, employers must address these needs and provide the level of support that is expected.  

New research5 shows that 48% of millennials and 61% of generation z are willing leave their current job for a company that offers better mental health benefits. The research lists specific benefit options employees want, including classes on mindfulness, employee assistance programs, mental health apps and support groups, mandatory mental health training for managers and individuals, and readily available education resources focused on mental health.6  

 As we look to the future of short-term disability and mental health, there is potential for a substantial impact to the workforce. And listening to employees and designing a comprehensive benefits package that includes an enhanced focus on mental health, employers can create cultures that encourage employees to talk about and seek support for their mental health while continuing to work and support the organization. 

References: 

  1. Sedgwick. Proprietary claims data.  
  2. Investor’s Business Daily. Baby Boomers Are Hitting Peak 65.  What It Means for Retirement Planning. Aug. 10, 2023. Retrieved from https://www.investors.com/etfs-and-funds/retirement/retirement-planning-reckoning-arrives-as-baby-boomer-generation-hits-peak-65/ 
  3. Forbes Advisor. “Workplace Benefit Trends By Generation in 2024,” Belle Wong, JD, November 15, 2023. Retrieved from https://www.forbes.com/advisor/business/workplace-benefit-trends-by-generation/ 
  4. Glassdoor. Glassdoor’s 2024 Workplace Trends. Nov. 15, 2023. Retrieved from https://www.glassdoor.com/research/workplace-trends-2024 
  5. Bureau of Labor Statistics. Career Outlook. Millennials in the labor force, projected 2019-29. Nov. 2020. Retrieved from  https://www.bls.gov/careeroutlook/2020/data-on-display/millennials-in-labor-force.htm 
  6. Society for Human Resource Management. Viewpoint. SHRM Research: Work Is Negatively Impacting Employees’ Mental Health. May 1, 2023. Retrieved from  https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/shrm-research-finds-work-is-negatively-impacting-employee-mental-health.aspx