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Workplace Stress: Expensive Stuff

Armen Hareyan's picture

Workplace stress can cut productivity and cost your company thousands of dollars annually.

Harvard Business Review writer A. Perkins, advises that 60-90 percent of medical problems are associated with stress. Princeton, NJ insurance company Foster Higgins Co., reports that 45 percent of corporate after tax profits are spent on health benefits.

CEOs and stockholders across America would be excited by a jump of 45 percent in annual earnings. But this calculation only reveals costs associated with health care costs.

To get a true analysis of the cost of stress in your company, you need to include the expenses associated with absenteeism and temporary replacement employees or the over-staffing that fills in for absent workers. You also have to calculate the cost of on-the-job accidents and workplace injury deaths (3.7 per 100,000 workers according to the National Safety Council.

Forty-six percent of workers report that their job is very stressful, according to Northwestern Life Insurance Company. And a 20-year study from the University of London reveals that unmanaged reactions to stress are more dangerous risk factors for cancer and heart disease than either cigarette smoking or high cholesterol foods.

Forty percent of job turnover is related to stress (Bureau of National Affairs), When you add in the stress related costs associated with quality control, customer service, sales, and administration, you'll find that stress is taking a healthy bite out of your bottom line.

Bill Wilkerson, CEO of Global Business and Economic Roundtable on Addiction and Mental Health, conducted a survey to find the top ten workplace stressors. In a report to the Industrial Accident Prevention Association, Wilkerson listed the following:

"The treadmill syndrome" - employees have too much or too little to do. Some have too many responsibilities and work around the clock - even when away from the workplace. Others fill their days with unproductive busy-work, feeling the stress of knowing they could be more productive.

"Random interruptions" - telephones, walk-in visits, demands from supervisors. Goal setting and time management strategies can increase productivity and alleviate the stressfulness of incomplete projects.

"Pervasive uncertainty" - market conditions, company problems, unsatisfactorily explained and announced change. Economic fluctuations, off-shore job displacement, terrorist attacks, and market conditions all affect stress levels and productivity.

"Mistrust, unfairness, and vicious officen politics" - keeps everyone on edge and uncertain about the future. Poor morale and esprit de corps increase stress levels and consume energy that could otherwise be directed at job related activities.

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"Unclear policies and no sense of direction in the company" - undermines confidence in management. Development of sound policies is the first step. Management must then
keep these policies updated and follow through to insure compliance throughout the ranks. Employees are easily stressed when it appears that management is out of touch.

"Career and job ambiguity" - a feeling of helplessness and lack of control. "How can I
succeed if I don't know what's expected of me or if my job here is uncertain?" Stress levels are affected by far reaching market conditions, challenges by competitors, life-cycle of products, and societal influences as well as vagueness within management.

"No feedback - good or bad" - prevents people from knowing how they are doing and whether they are meeting expectations. Stress related to this issue is typically one of management misperception as to the amount, importance, and effectiveness of feedback to employees. Whatever the cause, employees are easily stressed by lack of communication in this area.

"No appreciation" - lack of recognition generates stress that endangers future efforts. Human nature requires that we demonstrate appreciation for jobs well done. Inadequate demonstration of appreciation results in lowered productivity.

"Lack of communications" - up and down the chain of command leads to decreased performance and increased stress. As with feedback, leaders sometimes misunderstand the adequacy and effectiveness of their communications. There are dozens of ways to improve communications, and employees will usually tell you of shortcomings - if they are asked.

"Lack of control" - the greatest stressor in the workplace because employees feel that they have no control over their participation or the outcome of their work. Employees recognize their lack of control when they are held responsible without authority. Stress levels are reduced when employees are involved in setting the course of the organization, developing policies and strategies, and creating workplace expectations.

Leaders who recognize the high cost of workplace stress can tackle each of these problems. Good stress control gives employees a more pleasant and healthier place to work and puts money on the bottom line.

An informal, conversational survey of your own employees can help you identify the major stressors in your organization. Professional assistance is available to target all of these issues and develop a strategy to overcome the top ten workplace stressors.

Start with the information you can gather on your own, and work your way forward. Employees will appreciate your efforts and stockholders will thank you with increased investments.


Dale Collie speaker, author, coach, and former US Army Ranger, CEO, teacher at West Point. Selected by "Fast Company" as one of America's Fast 50 innovative leaders. Author of "Frontline Leadership: From War Room to Boardroom," and "Winning Under Fire: Turn Stress into Success the US Army Way" (McGraw-Hill) at Courage Builders.

This page is updated on May 12, 2013.