Introducing flexible working practices or offering employees the opportunity to work from home could go some way towards reducing the billion-pound cost of productivity lost to stress, depression and other mental health problems every year.

That's according to the National Institute for Health and Clinical Excellence (NICE), whose representatives believe small businesses and the wider economy are being damaged by a culture of long hours and "presenteeism", where workers feel obliged to come to the office despite being unproductive on a given day.

Research by the NHS watchdog suggests an organisation with 1,000 employees loses over £800, 000 a year because of mental health issues, while up to £250,000 a year could be saved annually by introducing performance-boosting initiatives like homeworking.

Even small firms would notice the benefits of homeworking, researchers observe, because an estimated one in six people have suffered from mental health problems at some time.

Commenting on NICE's proposals, Dr Richard Preece – a consultant in occupational medicine at Mid Cheshire Hospitals NHS Foundation Trust – said: "All managers know that happy workers are productive workers. The evidence confirms that promoting mental wellbeing is win-win, helping both workers and the bottom line."