By Adam Brimelow
BBC News, Health Correspondent
Mental health problems cost British businesses an average of £1,000 a year for every employee, researchers say.
Many employees struggle with depression
The Sainsbury Centre for Mental Health said the overall annual cost to employers, including time off work and lost productivity, is nearly £26bn.
It says most firms vastly underestimate the problem, but they could make big savings with a few simple steps.
The Federation of Small Businesses said it was harder for firms with fewer resources to put policies in place.
The report makes a business case for companies to help staff with mental health problems.
It says few firms appreciate that one in six staff is affected at any given time.
The cost is enormous, the report says, with 70m working days a year written off because of sickness.
The Sainsbury Centre estimates that the cost of lost productivity from employees who turn up, but cannot perform well is more than £15bn a year alone.
Angela Greatley, the Sainsbury Centre's chief executive, said it was important to encourage open discussion of problems such as depression, stress and anxiety.
She said: "People in the workplace holding down a job possibly don't want to come and say: 'I think my mental health problem is impacting on the way that I can do my work'.
"They fear that the employer might well pick on them. They are probably worried about what their work colleagues might say."
The report outlines simple steps which it says can yield huge savings for businesses, large or small.
These include recognising the problem early, encouraging managers to be supportive and flexible, and ensuring regular contact with staff who have to take time off.
The researchers said BT had successfully adopted these principles.
A few years ago it had 500 staff off each day with mental health problems. Now that is down to 300.
Dr Paul Litchfield, BT's chief medical officer, said the line manager had a crucial role.
He said: "It may be something as simple as the guy who's sat in a corner in a big office looking miserable, or perhaps crying.
"The normal human reaction of saying to that person 'Hey, what's going on, is there anything I can do to help?' is quite oddly something that we often don't do very well.
"So it is encouraging our people to take that human approach, giving them some additional tools and information to help them feel confident about approaching people in that way."
Martha Wiseman, a BT business consultant, has had two-and-a-half years off work in the last four years because of depression.
She is full of praise for the way her line manager kept in touch when she was at her lowest ebb.
She said: "I think when you're very unwell and isolated, you begin to fear the worst, and you have a catastrophic view of what's going to happen to you.
"Knowing that you have a job to come back to means you have something positive to aim for, something to gear your recovery towards."
She said it had also paid off for the company:
"I'm positive, creative and productive, and they've got my skills back.
"And I feel a great sense of loyalty to the company because they have shown some really good practice, and it's affected me personally, it's made a huge difference to my life."
The Federation of Small Businesses said it was important that employers did address mental health issues, but warned it was harder for firms with fewer resources to put these policies in place.
A spokesman said: "It behoves government and employers to get together to encourage best practice, and pass it down through the supply chain."