Why poor sleep is the top mental health challenge for employees

Why poor sleep is the top mental health challenge for employees

The top mental health challenge your employees are experiencing today might come as a surprise to you. Spring Health surveyed over 500 HR professionals and more than 1,500 full-time employees for its 2026 Workplace Mental Health Annual Report, and a massive misalignment emerged.

More than one-third (36%) of employees cited sleep issues related to mental health as a top challenge in the past year. In fact, sleep challenges tied to mental health were the #1 answer to the question about mental health challenges experienced in the past year, ahead of chronic stress, anxiety, and burnout.

However, HR professionals ranked sleep as only the fifth-most-prevalent challenge within their own workforces, with only 21% believing it to be a top concern for their workforce. This perception gap means that many organizations are unaware of the earliest signal of a well-being crisis.

The hidden cost: Sleep’s impact on businesses

Ignoring sleep health can affect both employee well-being and workplace performance and safety. Insufficient sleep costs U.S. businesses an estimated $136 billion in lost productivity every year.

The impact on daily operations is staggering, as shown by data from the National Sleep Foundation:

• Productivity drain: 60% of Americans report a negative impact on their productivity due to poor sleep.
• Error rates: About 60% of employees say poor sleep leads to problems managing workloads and avoiding mistakes.
• Workplace safety: Sleep disruption is a leading indicator of reduced recovery capacity. Sleepy employees are 70% more likely to be involved in a workplace accident than those with enough sleep.

The nonobvious mental health signal

Sleep is often the first thing people disregard when they are under stress. And the relationship between sleep and mental health is bidirectional: Mental health impacts your ability to sleep, and your sleep quality impacts your mental health.

If an employee is struggling with depression, they may sleep too much. If they are under chronic stress, they may sleep too little. Sleep procrastination, also called “bedtime procrastination,” is where employees avoid going to bed as a psychological way to delay the arrival of the next workday. When the workday feels unsustainable, the only way to "reclaim" time is to sacrifice rest.

The correlation between sleep issues related to mental health and other mental health challenges showed up in Spring Health’s research. When compared with those who didn’t say they had experienced sleep issues, those who experienced sleep-related mental health challenges in the past year were:

• Twice as likely to have also experienced trauma/PTSD.
• Twice as likely to have also experienced anxiety or panic symptoms.
• 1.9 times more likely to have also experienced depression or mood-related concerns.

In fact, for every other mental health challenge that employees could identify in the question that they were asked about sleep issues, the rates for other mental health challenges were higher among employees who had identified that sleep-related mental health concerns were a top challenge. That included incidents of isolation/disconnection at work, grief, financial stress, and many more.

Who is at the highest risk for sleep issues related to mental health?

Spring Health’s research shows that sleep issues are even more prevalent in specific, high-impact segments of your workforce:

• Managers: 4 in 10 managers report sleep issues, making them nearly 1.5 times more likely to experience this than individual contributors.
• High earners: Sleep issues increased to 42% among U.S. employees with a household income of at least $100,000.
• Younger generations: 40% of employees under the age of 55 cite sleep as a top challenge, making them nearly twice as likely to experience sleep issues as those 55 years of age and older (21%).
• Global populations: In India, more than half (53%) of employees cited sleep as a top mental health challenge.

What organizations should do next

1. Support the supporters

Since managers are the most vulnerable segment and your first line of defense against team burnout, they need targeted help. Ensure they have access to manager-specific mental health training so they can identify sleep-related performance issues early and direct employees to appropriate resources without trying to diagnose or treat them themselves.

2. Encourage healthy rest habits

Organizations should explicitly normalize sleep hygiene as part of their culture. Here are a few basics to encourage:

• Stay off digital screens one hour before bed.
• Avoid work two hours before bed.
• Avoid eating three hours before bed.
• Avoid caffeine 10 hours before bed.

3. Provide specialized clinical pathways

General talk therapy is not always the answer for chronic sleep issues. Organizations should provide access to specialized tools and therapists trained in cognitive behavioral therapy for insomnia (CBT-I). High-performing programs use care navigation to route employees to the right level of support before a lack of rest turns into a leave of absence.

4. Audit your workload norms

"Better habits" cannot fix an unsustainable workload. If your employees are reporting high rates of sleep issues, it is a signal to diagnose systemic drivers of distress. Use pulse surveys to map the employee journey and determine if your culture is the cause of the sleep issues.

This story was produced by Spring Health and reviewed and distributed by Stacker.