Two-thirds of benefits leaders report declining employee performance linked to mental health challenges

Lyra Health today released its 2026 State of Workforce Mental Health Report, “The Workforce Mental Health Paradox,” revealing a growing disconnect in workplace mental health: while more employees have access to care than ever before, many continue to struggle.

The findings highlight a critical reality for employers: expanding access to mental health support is not enough if employees cannot reach the right level of high-quality care when they need it.

More than one-third of employees say they are merely "surviving," and more than one in four report that their mental health has declined over the past year. Workers cite mounting pressures including burnout, financial stress, caregiving responsibilities, job insecurity, and anxiety around artificial intelligence.

The independent studies surveyed 7,500 employees and more than 500 benefits leaders across a range of industries in the United States, United Kingdom, France, Germany, Canada, and Mexico. Most survey participants had access to care through traditional pathways and Employee Assistance Programs.

“The question isn't whether mental health support exists—it's whether people can access it early enough, and whether it actually works," said Alethea Varra, Chief Clinical Officer at Lyra Health. "Employers are seeing that more employees need serious help, and the quality of care matters more than ever."

Thriving Is the Exception, Not the Rule

The sixth annual report paints a picture of a workforce under sustained pressure. Serious mental health needs have steadily climbed since this report began — up 67% in the past year alone.

Today, more than one in three employees report personal or family experience with serious conditions, including severe depression or anxiety, suicidality, eating disorders, and substance use challenges.

Stress has compounded so steadily that resilience itself is eroding, with many employees reaching a crisis point by the time they finally seek help.

• The Resilience Gap: More than one-third of employees describe themselves as merely "surviving," reflecting widespread emotional exhaustion across the workforce.
• The Attention Tax: One in two workers struggle to stay focused or engaged at work as financial stress, caregiving demands, and AI-related uncertainty compete for attention.
• The Business Cost: Mental health challenges are increasingly affecting company performance. Sixty-nine percent of benefits leaders say these challenges significantly reduced employee performance this year, and more than half report an increase in mental health-related leave or disability.

2026 Additional Report Highlights

• Managers Are Struggling: More than half (54%) say the role has negatively impacted their mental health — and nearly half have thought about leaving their jobs. Managers are absorbing their team stress while receiving little support themselves.
• Caregiving Is Straining Workers: Nearly half of working parents supported a child or dependent with mental health needs this year. Among those caregivers, 60% report burnout, and over one-third say their productivity or focus at work declined.
• The Neurodivergence Gap: While 91% of benefits leaders say neurodivergent support is a priority, 54% of employees struggled to access timely neurodivergent-informed care. Nearly half also worry that disclosing a diagnosis could hurt their career.
• AI Is Both Productive — and Stressful: Nearly half of employees say AI makes them more productive, while 44% worry about potential job losses.

“As managers are asked to serve as the first line of support for their teams, our data suggest we’ve left them without the support they need,” said Dr. Joe Grasso, Vice President, Workforce Transformation at Lyra Health. “Organizations are deploying AI, restructuring roles, and resetting performance expectations at breakneck speed–while the managers navigating all of this receive little preparation to help their teams navigate the human impact of that change. We need to equip HR leaders and managers with specialized resources to handle the mental health challenges that come with transformative change.”

A Call for Strategic Evolution

The report underscores the need for employers to rethink how workplace mental health support is designed and delivered.

Lyra Health advocates for a shift toward intentional benefit design that includes:

• Clear pathways for specialty care,
• Neurodiversity-informed providers, and
• Structural support for managers as companies navigate change.

For more insight into today’s workforce mental health challenges and strategies to support employees, download the State of Workforce Mental Health 2026 report here.

About Lyra Health

Lyra Health is the leading provider of workforce mental health benefits, serving more than 20 million people globally in partnership with leading employers and more than 100 million through health plan and partner relationships. Lyra is transforming access to life-changing mental health care through Lyra Empower, the only fully integrated, AI-powered platform combining the highest-quality care and technology solutions for members, providers and HR leaders. Empower works in the background to quickly connect members to the largest global network of evidence-based mental health providers, deliver actionable insights to benefit leaders, and free up providers to focus on client care—driving outstanding positive outcomes that are equitable across diverse racial and ethnic groups. Extensive peer-reviewed research confirms Lyra’s transformative care model helps people recover twice as fast and results in a 26% annual reduction in overall healthcare claims costs. For more information, visit lyrahealth.com.

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