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Workplace Stress Strains Organizations’ Bottom Lines

Jacquelyn Ferguson, M.S.

A road sign saying "Next Exit Frustration" with an arrow pointing to a business woman covered in Post-It notes .

Stress is the plague of our nonstop, hyper, 21st Century lifestyle. Ignore the negative consequences at your own peril.

The American Institute of Stress (AIS) definitively reports job-related pressure is the top source of stress for Americans, skyrocketing in recent decades.

Organizations’ bottom lines are eaten away by escalating health insurance and worker compensation costs for many conditions that could be prevented by reducing stress. For example, it’s estimated that:

  • Occupational pressures are responsible for 30% of workers’ back pain
  • 80% of workers feel stress on the job
  • Nearly half say they need help learning how to manage it
  • 42% say their coworkers need such help

The Great Recession

Whether organizations supply any, part or all employee health care coverage, they must understand employees feel stretched too thin from the effects of the Great Recession. More than ever, workplaces need to be made less stressful and more appealing to retain valued workers – especially as jobs open up elsewhere.

Rewards of Addressing Worker Well-being

Robert Levering’s book, “The 100 Best Companies to Work for in America” found companies that enhance worker well-being have more than twice the earnings per share and more than twice the rate of stock appreciation compared to the average Standard & Poor’s 500 company.

Work Stress is Expensive

AIS Statistics

Workplace stress in America is estimated at over $300 billion annually due to:

  • Job turnover – 40% is due to stress
  • Accidents
  • Absenteeism
  • Employee turnover
  • Diminished productivity
  • Direct medical, legal, and insurance costs
  • Workers’ compensation awards
  • The 2000 Integra Survey of employees found:
    • 60.2% routinely have work-related neck pain
    • 44% strained eyes
    • 38% hand pain
    • 34% difficulty sleeping

Customer Service Suffers

Well-treated customers result in a 5% reduction in customer defection translating into a 30% to 85% increase in corporate profitability. Source: Harvard Business Review study by Reichheld & Sasser.

But strained employees don’t treat your customers well enough and cause problems like:

  • Loss of intellectual capital: Stressed-out employees don’t focus on quality and improvement.
  • “Organization’s ability to make process improvements nearly always stops due to resistance. With overwhelming workloads … and going so fast, (employees) don’t have time to make the process better. It creates a terrible cycle of trying to work harder … because the volume you have to put out is increasing, but you aren’t doing anything to make the process more effective and efficient,” says Jack Quirk of Blue Cross/Blue Shield.
  • High-stress jobs with low control cause employees’ thought processes to become more rigid, simplistic and superficial; not conducive to innovation.
  • The more helpless a person feels, the less likely he is to come up with effective coping responses. Source: Dr. Martin Seligman’s research on “learned helplessness.”

Workplace Accidents

When over-stressed, your distraction increases and attention narrows, leading to more accidents and injuries:

  • High stress workers are 30% more likely to have accidents than those with low stress; 60% to 80% of on-the-job accidents are attributed to stress. Source: Jonathan Torres, M.D., of Workmed Occupational Health Services, ME;
  • On average, stress-related accident claims are two times more costly than nonstressed related ones. Source: Harvard Business Review;
  • A study of 3,020 aircraft employees found those who “hardly ever” enjoy their jobs were 2½ times more likely to report back injury.

Can you hear your bottom line chipping away?

Factors Causing Employee Stress

Working Longer and Harder

Until around 1995, Japan had the record of most hours worked compared to the labor force of any other industrial nation. Now America holds this stressful record. According to a 2000 International Labor Organization study, Americans put in the equivalent of an extra 40-hour work week compared to 1990 and work almost a month more than the Japanese and three months more than Germans!

Absenteeism

From 1996 to 2000 the number of employees calling in sick due to stress tripled according to a survey of 800,000 workers in over 300 companies with an estimated one million workers absent daily. It’s estimated to cost American companies $602.00 per worker a year. The price tag for large employers could approach $3.5 million annually.

Job Insecurity

A 1999 government study found more jobs had been lost in the previous year than any other year in the last half century, and the number of workers fearful of losing their jobs had more than doubled over the past decade. And this was before the dot.com collapse of 2000 – 2001 and the Great Recession!  How safe do you think your employees feel today?

Job Demands Versus Control

The amount of job stress depends on the extent of the demands and the worker’s sense of control or decision-making freedom she has in dealing with them. Multiple scientific studies confirm workers who feel the stress of high demands with little control are at increased risk for cardiovascular disease.

“Tunnel Vision”

Stress creates “tunnel vision,” which causes judgment errors decreasing creativity and the ability to cope with change. When stressed, humans revert to familiar behaviors, making it harder to adapt to never-ending organizational changes.

Workplace violence

Work shouldn’t be a scary place, but it is for many:

  • On average 20 workers are murdered each week in the U. S. making homicide the second highest cause of workplace deaths and the leading cause for women.
  • The Bureau of Labor Statistics reports that over two million Americans are affected by workplace violence annually making “desk rage,” “phone rage,” and “going postal” part of our lexicon.
  • A 2000 Gallup Poll found:
    • 14% of respondents had felt like striking a coworker in the past year, but didn’t
    • 25% have felt like screaming or shouting because of job stress
    • 10% feared a coworker could become violent
    • 9% knew of an assault or violent act in their workplace
    • 18% experienced a threat or verbal intimidation in the past year

Interpersonal Conflict

The St. Paul Insurance report found the main causes of burnout were interpersonal demands from working with teams and supervisors.

Phew! That’s a lot of stress.

But what constitutes too much stress?

Not all stress is bad. So how can a manager tell when their employees have too much?

An optimal stress level is the amount that makes you feel motivated to tackle the day’s challenges. When you notice employees losing enthusiasm, stress may be the culprit.

Too much stress causes everything from physical illness and increased health care costs to resistance to change and high turnover, negatively affecting your bottom line.

Too little stress can be just as damaging.

Everybody has it, not just the weakest. According to 2006 surveys from ComPsyche and the Anxiety Disorder Association of America (ADAA), employees cite their top work stressors:

  • Deadlines, 55%;
  • Management, 50%;
  • Workload, 46%;
  • People issues, 28%;
  • Juggling work and personal lives, 20%;
  • Lack of job security, 6%;

The ADAA’s 2006 Stress and Anxiety Disorders Survey found the most common ways employees react to stress:

  • Caffeine, 31%;
  • Exercise, 25%;
  • OTC medications, 23%;
  • Alcohol, 20%;
  • Smoking, 27%;
  • Eat (46% of women, 27% of men);
  • Talk to family or friends (44%, 21%);
  • Sex (19% for men, 10% for women);
  • Illegal drugs (12% for men, 2% for women);

Fewer than 40% of employees whose stress interferes with their work have spoken to their employers about it mainly because they fear it would be:

  • Perceived as lack of interest or unwillingness to do something
  • Labeled “weak”
  • Detrimental to promotion opportunities
  • They’d not be taken seriously

Strive For a Healthier Workforce

When employees grumble about workplace stress around the water fountain, what do they say? Not knowing can cost you dearly.

With an improving economy, retaining employees is increasingly important. How many of your employees will jump ship to get away from their stress? Which ones can you afford to lose? How much does it cost?

To understand how much stress costs you, management can begin by answering these questions:

  • How can you help identify and relieve employees’ main stressors?
  • How can you give them more control over their day-to-day activities?
  • How can you help them enjoy their jobs more?

Your answers, and more importantly your actions, to reduce their stress will gradually improve your bottom line.

Reduce Turnover Costs

Since an estimated 40% of turnover is due to stress, it’s imperative to determine employees’ perceptions of their main stressors before creating a plan. Use employee surveys, exit interviews and their statements about what bothers them the most at work. Usually it’s about situations over which they have little control.

Once identified, put the requisite amount of energy into preventing and decreasing their stress. Options range from stress reduction classes tilted heavily toward those with “how to” skills, to individualized wellness coaching for those in need.

Also, find out what your competitors are doing to help their employees. Some provide concierge services while others pay for on-site yoga classes.

A vital step for all employees – over-stressed or not – is to give them increased control over their biggest frustrations. For example, an employee who’s distracted by a coworker talking to himself requested and received the right to work in a different part of the building when necessary.

Happy Workers are More Productive and More Likely to Stay

Experiment with ideas to reduce employee stress and increase their satisfaction.

  • Train all to do their jobs more efficiently and safely.
  • Stop supervisory personnel from driving away your staff by providing them with management training.
  • Facilitate work and life balance by having teams manage many job functions vs. an individual. If an employee has her child’s soccer game to attend, for example, other team members could cover for her; a wonderful motivator.
  • Encourage employees to take weekends off and vacations. Price Waterhouse Coopers employees receive a pop-up reminder when sending an e-mail on a weekend: “…it’s important to disconnect and allow others to do the same. Please send your e-mail at the beginning of the workweek.”
  • Flextime and creative scheduling help employees balance their work and home responsibilities.
  • Give more personal time. HomeBanc Mortgage Corporation in Atlanta gives employees 24 “being there” hours for times they need a couple hours to take care of personal responsibilities without using vacation time.
  • Offer regular stress reduction training to all.
  • Offer individual stress coaching as needed.
  • Concierge services pamper employees and decrease their errand-running stress. Employees pay for the services, such as dry-cleaning, but not for the concierge service itself.
  • On-site childcare addresses many parents’ biggest stressor. Offer it year-round, during the summer when school’s out or before and after school hours.
  • Serenity rooms offer a few minutes of solitude, particularly helpful for those who work in cubicles where there’s no privacy.
  • Encourage employees to take twenty minutes of work time to meditate daily and watch their errors decrease, energy and wellbeing skyrocket.
  • HomeBanc sends massage therapists to each office monthly for free neck and shoulder massages. ARUP Laboratories subsidizes on-site massage where employees pay $5 for a 15-minute massage.
  • Provide healthy snacks or meals during particularly stressful times of the year, like during tax season for accounting firms.
  • Traditional wellness initiatives like subsidized health club membership, nutrition advice, health screenings for cholesterol and blood pressure, financial incentives for quitting smoking, and work time to exercise AND a variety of stress reduction classes such as prioritizing, assertiveness training, etc.
  • Give everyone, yes everyone, their birthdays off!

A cost and benefit analysis can tell you if ideas that seem appropriate for your workers could actually save you money when compared to the high cost of turnover and increased insurance rates.

So what are you waiting for? With stress mounting in our frenzied workplace costing you every step of the way, how can you reduce stress in your organization?

About the Author

Jaquelyn Ferguson is the founder of InterAction Associates, her speaking and coaching firm.  For over 25 years Jackie has designed and presented keynotes and workshops on stress management, diversity, workplace harassment, motivation, and communication skills. 

Jackie is also a Stress & Wellness Coach helping people achieve more success with less stress.  Jackie is the author of “Let Your Body Win:  Stress Management Plain & Simple” and a weekly column “Stress for Success” in Gannett Newspaper, at www.letyourbodywin.com.  

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