June 15th 2021

The impact of the COVID-19 pandemic on employees' mental health

Study of the psychological impact on workers and how managers can respond.

The COVID-19 pandemic has upended working life for millions and it is difficult to say how long the impacts of this crisis will be felt. Amidst the widespread change and unprecedented uncertainty, Dr. Andrea Derler (Senior Lecturer Learning Solutions, MCI) led a team of researchers and scientists at the NeuroLeadership Institute to conduct a survey among 688 participants (U.S. working professionals).

The goal of the study which was conducted between April and May 2020 was to learn how working professionals experienced the effects of the pandemic, what psychological needs were most pronounced at that time, an what leaders should do to cater to employees’ needs in order to maintain optimism and confidence in their organizations during these difficult times.

The data suggests that the migration to working remotely, followed by companies’ loss of revenue and profits, and the transition to virtual learning had the biggest impact on employees (see figure).

15 Impact

Source: Industry Research, NeuroLeadership Institute, 2020

Even though remote work had been steadily growing over the past decade[1], working from home became a new reality for many employees - with significant consequences on employees’ mental state: 50% of survey respondents reported increased anxiety levels from one week to the next.

However, rising anxiety levels were not felt equally. For example, childcare management issues, COVID-19 infections or a workforce reduction in organizations led to significantly higher anxiety levels than things like managing increased healthy and safety issues, lower revenue and profits, or decreased business travels. Team cohesion, on the other hand, worked as an anxiety reducer in the virtual world: employees who were impacted by the change to remote work the most, but felt that they were part of a team, experienced significantly lower anxiety levels (see graphic).

15 Anxiety Differences

Source: Industry Research, NeuroLeadership Institute, 2020

A silver lining: what employees need in times of crisis

The data also suggested that certain components in employees’ work culture that helped them remain confident and optimistic: Having clear rules and order at work (Certainty), being part of a team (Relatedness, and receiving sufficient explanations regarding decisions being made (Fairness) predicted the degree of confidence in their organizations’ ability to survive the impact of the pandemic (see Figure 4).[2]


 Source: Industry Research, NeuroLeadership Institute, 2020

From a psychological perspective, this makes sense: especially in the early stages of this crisis, employees:

  • Craved more information about the crisis itself and their organization’s plan for action (Certainty)
  • Worried about the strength of their social ties in a virtual world (Relatedness), and
  • Wanted reassurance that any course of action would be communicated fairly across the organization (Fairness)

What leaders should do in times of crisis?

Even though many organizations reacted swiftly as the crisis unfolded, for example by offering pandemic leaves, childcare subsidies, as well as wellbeing initiatives, the data suggested that there is more than can be done by leaders to maintain confidence and optimism in employees.

Further analyses also showed that there are specific practices that are highly correlated with employee confidence (see table):

15 Graphik Org Practices

Source: Industry Research, NeuroLeadership Institute, 2020


All of us were affected by the impact of the pandemic – in various ways – and the psychological needs of employees for Certainty, Relatedness, and Fairness were more pronounced than ever. The big takeaway for organizational leaders from this study is that knowing the changing needs of their workforce, and actively working on creating a sense of confidence and optimism are key responsibilities of leaders in times of crisis.

As the COVID-19 pandemic slowly subsides around the globe, the risk to go ‘back to normal’ is high. This research highlights the importance for leaders to understand, and react to people’s psychological needs and act with increased transparency, positive role modeling and setting clear objectives when things get tough – now and in the crises to come.



[1] Global Workforce Analytics, 2020; Latest Work-at-Home/Telecommuting/Mobile Work/Remote Work Statistics - Global Workplace Analytics

[2] These three cultural components are based on NeuroLeadership Institute’s SCARF ™ model, Source: Rock, D. & Cox, C. (2012). SCARF in 2012. Updating the social neuroscience of collaborating with others. NeuroLeadership Journal, 4 (4), 1-16

Share article