Recently mental health has come into the spotlight, with rates of anxiety, depression and substance abuse disorder spiking during COVID-19 lockdowns.

It's no secret that employee mental health can take a toll on a business. However, a new report out of McKinsey said that digital tools could be one way to help support employee mental health and wellbeing.

"A mental-health condition manifests itself in workplace absenteeism, presenteeism, and loss of productivity," the authors of the report wrote. "The World Health Organization estimates that depression, anxiety disorders, and other conditions cost the global economy $1 trillion per year in lost productivity."

Roughly 24 in 100 employees require mental-wellness supports, such as counseling and psychotherapy, according to the report, and one in 100 will require acute care for mental health needs. The other 75 employees do require supports that foster mental wellness.

"A meta-analysis shows that for every dollar companies spent on wellness programs, their healthcare costs fell by approximately $3.27 and their absenteeism costs by about $2.73. With the ubiquity of personal digital devices – smartphones, fitness trackers, tablets, and so on – many wellness programs have moved to digital or virtual formats, which now account for the majority of employer-sponsored health offerings," authors of the report wrote.

The new report broke down three main groups of employee-wellness digital tools: wearables and digital biomarker apps, prevention and treatment products, and analytics tools.

According to the authors, wearables and digital biomarker apps allow employees to collect data about their condition in real time. These tools have secondary purposes regarding prevention, treatment and analytics.

Prevention and treatment tools are primarily focused on helping employees maintain wellbeing via a number of different avenues, such as chatbots or teletherapy. The tools are also used to help get employees the help they need at the right time.

Meanwhile, analytics tools can be used to help inform employees about their condition and about potential ways to mitigate stress. They can also be used to tell supervisors that their team is reporting stress. These could also help the leadership make decisions about employee wellbeing.

WHY IT MATTERS

Mental health is becoming a central focus in healthcare. In fact, more than 40% of U.S. adults reported symptoms of anxiety or depressive disorder during the COVID-19 pandemic, compared with just 11% in the months prior to the outbreak, according to a Kaiser Family Foundation survey.

However, there is a shortage of mental health practitioners in the U.S. Increasingly, innovators are pushing to use digital to help tackle this gap and get folks the care they need.

"Digital solutions can offer therapeutic approaches or support positive behavioral change on a large scale," the authors of the report wrote. "They are accessible at any time and from anywhere, providing help on-demand without the long waits often needed for in-person therapy. They are also convenient, easy to use, and anonymous."

THE LARGER TREND

Today there are several companies working on mental health tools specifically for the employer space. In February Modern Health scored $74 million, bringing its total raised to more than $170 million for its mental health tool, which works with employer-customers to provide an app-based package of mental health benefits.

Lyra also created a behavioral health benefits platform for employers. In June, the company announced a $200 million raise, which raised its valuation to $4.2 billion.

Ginger is another big company in the space. Earlier this year, the company landed $100 million in Series E funding for its mental health tool. However, Ginger works with insurance companies and providers as well.

Across the pond, London-based Unmind raked in $10 million in Series A funding for its product that focuses on mental health in the workplace.