How stress is costing your company millions

  • Business
  • Friday, 09 Oct 2009

USUALLY, when organisations run stress management programmes, they see it as a “service” to help their staff safeguard their personal wellbeing. This may explain why many organisations take only a passing interest in stress management programmes. It’s not seen as an issue that directly affects the bottom line.

After all, to quote a managing director of a local small or medium-sized enterprise I met recently, “staff’s stress is their own business. If they cannot handle the pressure, then they should just learn to deal with it or get out.”

On one hand, I can certainly understand and empathise with this MD; organisations just cannot (and should not) coddle their staff or deal with all of their staff’s personal issues and frailties. Organisations expect their staff members to already possess a certain level of emotional resilience and personal mastery to begin with.

On the other hand, business people, being the pragmatist we are, will act if it has a direct impact on our profits, and an overwhelming amount of research from around the world indicates clearly that high stress levels translate into losses.

Consider the following:

According to the American Institute of Stress, job stress costs the US industry over US$300bil annually as a result of:



·Employee turnover;

·Diminished productivity;

·Direct medical, legal, and insurance costs; and

·Workers’ compensation awards.

Research by Perkins (1994) cited in the Harvard Business Review showed that 60% to 90% of doctor visits were stress-related.

Northwest National Life reported in 1993 that one million absences each day in the workplace were stress-related.

According to the US Bureau of National Affairs, 40% of job turnover is due to stress.

The figures speak for themselves. When organisational stress is unmanaged, there is a cost to pay, if not in the short term, then certainly in the long term. For this reason alone, more organisations need to pay more serious attention to the issue of work-related stress.

What can be done to effectively manage stress?

The key to effective stress management is to intervene at the organisational level rather than just the individual level. While sending staff members to some stress management workshops may shape up to be a convenient and relatively cheap solution, it takes more than that to address stress at the macro level.

·Conduct a diagnostic study: It’s unwise to take action without understanding the problem. Intervention needs to be based on facts.

“Is stress really a problem in this organisation? Who exactly is stressed? Why are they stressed?”

Chances are that there are specific departments in your organisation, or specific job roles, that experience higher stress levels than the rest. That helps isolate the problem, and may save you from having to train every single staff in the organisation.

It is also important to identify the root causes of stress, especially if they are systemic within the organisation. A diagnostic survey will allow you to identify macro trends.

For example, our psychology team recently conducted a study for a multinational company and discovered that its main cause of stress was faulty communication processes.

In another government-linked company we worked with, we isolated the stress problem to two departments, and this was due to the heads of department’s management style.

It is encouraging that in the last two years, more organisations are approaching research units and academic units, like our own psychology department, to run diagnostic research in their organisations.

·Eliminate unnecessary stress: Let’s get one thing straight – all work will contain some element of stress. It is impossible to completely eliminate work stress and this is not desirable because a certain level of stress is necessary to create motivation and impetus. There are certain work pressures that are simply unavoidable.

A CEO will always be stressed about meeting the expectations of their board, and a salesperson will always be stressed about their sales targets. Nothing wrong with this, as long as the stress levels don’t reach a stage where it affects their health and their work.

Having said that, there are elements of work stress that are unnecessary, and where possible we should seek to eliminate these “additional” stressors.

Prevention is better than cure. Having identified the systemic root causes of stress within the organisation, the next step is to address these causes directly. This will involve organisational change; whether it be changing systems, or procedures, or management culture.

For example, if the communication system is the problem, then direct resources to improve communication quality so that staff are clear about their goals, roles, scopes of responsibility and expectations. If lack of supporting infrastructure is the problem, then explore affordable options to address this issue.

In my observation, almost every problem has available solutions that are cost-effective and viable.

·Build resilience among staff: This is where stress management training fits in. We have to understand that the purpose of a stress management workshop/seminar is not to lower stress levels temporarily. It is not to help workers feel better at “now”. It is not to offer short-term relief.

The purpose of stress management workshops is to equip staff with the skill sets necessary to manage stress themselves. It is about building personal resilience so that come what may in the future, they are ready to deal with it.

The logic here is very simple. We cannot change the fact that work will involve challenges, pressures and “stressful situations”, but we can strengthen our staff to be able to deal with these situations.

Some say that “resilience cannot be trained, some people are just born strong”. While research indicates that a genetic predispositions may in part determine our susceptibility to stress, training and acquisition of skills and experiences can significantly improve a person’s ability to handle stress and pressure.

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