Mental health and unemployment

At CareerSupport365, we are passionate about helping to create healthy workplaces in all senses of the phrase. Mental health may have spent many years shrouded in mystery and stigma, but in recent years, it has been brought to the front of the world’s mind and rightly so. This Mental Health Week, we’re taking a look at how our mental health can be impacted by unemployment.

It’s no secret that the jobs we have, play a huge part in our overall wellbeing – after all, the average full-time worker in Australia works 40.6 hours per week (that’s just under a quarter of our week) and the work we do directly impacts every level of Maslow’s Hierarchy of Needs. Considering it can have such a profound impact on our lives, it’s no surprise to learn that the mental health effects of unemployment can be extremely troubling. Unfortunately, job loss is one of those life events that many of us are bound to experience – despite its frequency, the emotional impacts are significant and many experts have noted that the impact of job loss can be similar to that of bereavement.

After leaving a job, the most obvious loss is that of an income. In the case of redundancy there is often a pay out of some kind but even that can be short-lived and meagre in comparison to a full income. According to the Australian Psychological Society’s 2015 Stress and Wellbeing Report the number one cause of stress amongst Australians was personal finances – a stress that is only exacerbated when a source of income is taken away.

No income = short-term perspectives

No one wants to be without a steady income but it is an unfortunate reality that it will happen to many people over the span of their lives – perhaps several times. A study based on research by Princeton University took a look at the decision making of those who were considered to be in poverty – a group of 464 sugarcane farmers in India. The farmers relied on the harvest for 60% of their income and the study tested their IQ both before the harvest and after it, finding that their IQ was 13 points lower before the harvest, the equivalent of losing a full night’s sleep.

It wasn’t that the farmers were actually less intelligent, their priorities were simply different and it caused them to make poor decisions – a fact that can bleed out into an individual’s entire life. A lack of income drives many people into survival mode, simply considering what it will take to survive until tomorrow, rather than making decisions that will benefit for years to come. This survival instinct can be seen in a study by De Witte, Hooge and Vanbelle in 2010 where they found that “The long-term unemployed score significantly lower for employment commitment, and especially job-seeking behaviour compared to the short-term unemployed.”

Money matters but it’s not all about finances

Everyone dreams of winning the lottery and becoming rich overnight, but taking a close look at winners of British Football Pools, found that plenty of them fulfilled ‘the dream’ of many and quit their jobs to enjoy their winnings but they then came up against lost relationships and decreased  feelings of accomplishment.

Losing a job is not just about losing money – it’s losing routine, colleagues, chances to exercise skills and achieve something. De Witte, et. al found that those who were unemployed for the short-term had a psychological wellbeing that was problematically low and, while it was considered to be possible to adapt to being unemployed, as mentioned earlier, motivation levels of getting back into employment dropped to worrying lows.

No matter whether individuals left a job of their own accord or were made redundant, short-term or long-term, they report around 30% more negative emotional experiences in their day-to-day lives compared to those who are employed.

Unemployment, before it’s time to retire, is not a desirable position to be in. Being in a steady job, with a steady income and all the benefits to wellbeing a job brings is important for every individual. Of course, almost everyone will experience either redundancy or voluntary unemployment at least once in their lives, for varied lengths so it’s important that organisations are considering how they can help their leaving employees in their career transition.

This Mental Health Week, take some time to consider how your offboarding program assists your exiting employees in their career transition and take any action you can to ensure that you can lesson the emotional blows of losing a job. Any positive change is a step forward in helping improve the mental health of both employees and the workplaces they leave behind.


Greg Weiss is Australia’s Leading Career Coach. He is the author of “So You Got The Job! WTF Is Next?”. The book prescribes a proven, practical 7-step framework for new employees so they succeed, rather than fail their probation periods and beyond. Find out more about the book at

He is the Founder and Director of Onboff an online training and coaching platform that helps HR specialists, coaches and recruiters to deliver exceptional onboarding and offboarding experiences for employees.

He also hosts The Keep: The Employee Experience podcast and runs CareerSupport365.

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