Coping with the Pandemic’s Hidden Iceberg

Employers must prepare to face the long-lasting human impacts of COVID-19
Mathieu Laberge and Mario Iacobacci

The COVID-19 virus took the world by surprise. Its rapid spread was shocking. First came the public health crisis, then the economic fallout from measures to contain transmission. Now, a second wave is unfolding. But what could prove even more difficult to deal with than the virus itself is the pandemic’s long-term impact on mental health. That is likely to affect many millions more globally than the number of people infected by the virus. Governments and businesses must now prepare to face the pandemic's far-reaching, long-lasting repercussions.

To understand what the potential impacts of COVID-19 are on mental health, Deloitte Canada released a report, “Uncovering the hidden iceberg­: Why the human impact of COVID-19 could be a third crisis”, earlier this year. In this article, we’ll summarize key findings from that report, and we’ll offer thoughts on how employers can respond.

The human and social impact of natural disasters and the associated economic hardship may cause an increased incidence of mental illness, poorer educational outcomes, an increase in substance abuse and crime, and the weakening of the community fabric. Deloitte has developed a framework to assess the human impact of pandemics and natural disasters. It encompasses financial, economic and social impacts. Financial impacts are further broken down between insurable and out-of-pocket impacts. Economic and social impacts include a wide array of areas under health and well-being, education, jobs and productivity, and community. Deloitte’s Human Impact of Disasters is summarized in the figure below.

Deloitte’s human-impact assessment framework

How do we categorize public safety events’ human impacts

Financial impactsEconomic and social impacts
Insured Insurable Health and well-being Education
  • Property (home, auto, etc.)
  • Short term disability
  • Long term disability
  • Permanent mutilation
  • Loss of members
  • Life
  • Loss of income
  • Other insured losses
  • Interest rate cost from emergency credit
  • Uninsured losses of income (employment, small business, etc.)
  • Deductibles
  • Residual claims vs payments
  • Additional health caseloads and other health outcomes
  • Mental health outcomes
  • Family break-up, violence
  • Completion & enrollment
  • Academic outcomes
  • Loss of long term income
Jobs and productivity Community
  • Job losses—temporary, permanent
  • Lower productivity in employment
  • Direct (less time spent working)
  • Indirect (from other impacts, e.g., stress)
  • Crime
  • Substance abuse
  • Social/community networks
  • Environmental damage
  • Opportunity/productivity impacts on third parties (e.g., hosts)
  • Other spillover impacts
© 2020 Deloitte LLP affiliated entities.
Uncovering the hidden iceberg
Why the human impact of COVID-19 could be a third crisis

Learnings from the past

One of the truly rare features of the current pandemic is the overlaying of multiple sources of stress: seeing our daily routines disrupted by the lockdowns; stress as we face an uncertain future; and financial stress arising from the economic crisis that the pandemic triggered. These stressors compounded to a level rarely seen in recent history.

To ensure our analysis was as representative and relevant as possible to this year’s events, we first looked at how mental health issues unfolded following the 2016 Fort McMurray wildfires in Alberta. Then we looked at long-term unemployment during and after the 1990s and 2008-09 recessions. This allowed us to assess the enduring financial stress of recessionary periods. There is a significant body of literature that documents the impact of prolonged unemployment periods on mental health and labour-market participation. Finally, we assessed which population segments were most at risk through the pandemic and during the recovery. The findings from this three-pronged approach to assessing the human impacts of COVID-19 are striking. They can be summarized as follows:

  • Mental health and human impacts of COVID-19 will be significant. In our worst-case scenario, it is possible that visits to a mental health practitioner will be close to triple what they were pre-pandemic— up to 10.7 million visits annually in Canada. Prescriptions of antidepressants may reach 500,000, an increase of 20 per cent.

  • Mental health and human impacts of COVID-19 will be with us for a long time. Long-term unemployment lasts for close to a decade following the end of a deep recession—impeding job prospects for a significant part of the population. Close to three years after the Fort McMurray wildfires devastated that town, the mental health indicators reviewed had not started to revert to pre-disaster levels.

  • Women are at the epicentre of the COVID-19 human crisis. Women, especially single moms, entered the pandemic as a relatively vulnerable group due to their high incidence of low incomes (second only to seniors across the country). Women were also proportionately more likely to lose their jobs during the lockdowns, and, on average, they recovered jobs slower than men. That’s because women hold more jobs in the service industry. Finally, women show a higher incidence of mental health needs and are more likely than men to declare that their mental health needs are only partially met or totally unmet, according to Statistics Canada surveys before and during the pandemic.

No reason to stay idle

Beyond the numbers, each affected individual lives through personal trauma. For our society, the sheer magnitude of the possible wave of mental health needs is overwhelming. If the public health crisis of COVID-19 took us by surprise, and the economic crisis disrupted us, let’s make sure we are prepared to face the impending mental health crisis. 

For employers, this means considering how to provide additional flexibility and support to their employees. A start may be to acknowledge that not all employees are navigating through the pandemic the same way. Some may not feel comfortable to show up at the office after the economy reopens. Others can have circumstances that make having a desk available at the office desirable. As such, employers might consider hybrid labour-participation models, where some employees keep working from home and others make it to the office more regularly. 

In the short term, it may require planning for and investing in digital tools, both hardware and software. Over time, this could become a more common business model that provides opportunities to optimize the real-estate footprint of some organizations. For some employers, it may be an occasion to review the mix of employee benefits and see how to better accommodate employees in this stressful period. This could include introducing flexible benefit options that respond to different needs of employees at different stages in life. It may also be a chance to expand the breadth of mindfulness programs offered to employees in their benefits package (even those delivered digitally). 

Other opportunities for flexible support options may also arise. Providing low- to no-cost academic tutors, online structured recreative or relaxation sessions and other services to employees’ children—above and beyond coverage for mental health professional services—may prove useful in removing part of the stress faced by parents balancing work and family obligations.

The pandemic might even be an opportunity to show positive leadership and engage in a fruitful discussion with employees on the future of work, work-life balance and the extent and nature of support for employees and their families within the organization. Given the unprecedented nature of this pandemic for those in the labour market, there is no proven recipe or cookie-cutter approach to deal with its lasting effects in the workplace. However, organizations that engage in a positive and transparent discussion with their employees may benefit in the short and long term.

Mathieu Laberge is senior manager, economics & policy advisory practice, at Deloitte Canada. He is a graduate of the Executive MBA Americas program at Smith School of Business. Mario Iacobacci is partner, economics & policy advisory practice, at Deloitte Canada.

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