The research, funded by the Western Australian government, is one of the most comprehensive research studies into FIFO undertaken in Australia.
More than 3000 FIFO workers and their families participated in the research, which was undertaken in partnership with industry, unions and researchers from Curtin University's Centre of Transformative Work Design.
The report found that 33% of FIFO workers experience high levels of psychological distress, compared to 17% of non-FIFO workers.
Research also found FIFO workers also suffer more incidents of workplace bullying and higher levels of burnout than non-FIFO workers.
Many already use a range of positive strategies to manage their mental health, including maintaining regular communication with family and friends while onsite, and seeking mental health support when needed.
The report contains 18 recommendations, including rosters and shift patterns that provide better rest time, permanent rooms at accommodation sites and building local community connections.
The government is urging the mining and construction industry, unions and individuals to implement the recommendations.
The Department of Mines, Industry Regulation and Safety is also currently drafting a code of practice for mentally healthy workplaces for FIFO workers in the resources and construction sectors in WA, which is expected to reflect the outcomes of the research.
"We hope the industry, unions and FIFO workers themselves will adopt the report recommendations, on site, and at home, to help improve the mental health and wellbeing of all FIFO workers, and their families," WA Mental Health Minister Roger Cook said.
The Chamber of Minerals and Energy of WA welcomed the research.
"Mental health issues exist throughout the entire community. As a major employer in the State, the WA resources sector is committed to ensuring the mental health and wellbeing of its workforce as part of its ongoing commitment to health and safety," CME CEO Paul Everingham said.
"The research sheds further light on the mental health and wellbeing of FIFO workers and CME will work closely with our members to review, consider and respond the recommendations in this report."
Everingham said the industry always had room for improvement.
"This research will greatly assist companies in reviewing existing strategies to ensure they are directed in the most appropriate areas and are achieving meaningful results," he said.
CME has launched a new partnership with Lifeline to work to provide industry specific tools to support the improvement of onsite mental health strategies.
Everingham said CME was in discussions with other mental health organisations to ensure industry had access to appropriate resources in line with the report's recommendations.
"Importantly, the report encourages companies to improve promotion of these already available support options such as employee assistance programs and helplines, as this may increase the incidence of workers seeking help," he said.
Everingham said ongoing research was important, as there were limitations with the benchmark group used to compare FIFO worker results.
"The report makes many assertions based on a comparison with this benchmark group, and CME considers further research is required to examine possible associations between FIFO, other work factors and mental health," he said.
"The findings demonstrate a complex set of work and non-work factors contribute to mental health outcomes and CME supports the need for industry, government and communities to work together with a focus on early intervention and reducing stigma in order to improve mental health outcomes across the Western Australian community."
