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The Cost and Removal of Workplace Stress

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Workplace stress is evidenced every day, but few employers truly understand the secondary ramifications that stress can cause in the workplace. Four out of five American workers are thought to be affected by workplace stress, which is costing U.S. businesses about $300 billion each year from stress related: absenteeism, employee turnover, medical, insurance premiums, workers' compensation, lawsuits, and diminished productivity.

Since stress is a subjective experience, it can be difficult to define. Further complicating matters is the difficulty to distinguish where work stress begins and everyday stress ends. However, the European Agency for Safety and Health at Work offers an excellent definition for workplace stress: "people experience stress when they perceive an imbalance between the demands made of them and the resources they have available to cope with those demands."

While a slippery slope to harmful stress, there's a place for "good stress" or "eustress" in the workplace. This type of non-harmful stress can be compared to an athlete preparing for an event; while the preparation might be stressful, it could mean improved performance. A good rule of thumb for distinguishing between the two is that if the stress is chronic in nature, then it's harmful.

Since the start of downsizing and outsourcing trends of the 1990's, which caused a constant fear of unemployment, there is an ever growing awakening by the scientific and business community about the causes of stress and its' physical and mental health effects. These factors are endless: a predominately service-oriented U.S. economy, growth of new operating systems, faster work pace, longer hours, and utilization of contract and temporary workers. Whatever the cause, some research has shown that about 35% of workers experience high levels of on-the-job stress and 13% are always stressed at work.

For an employer, stress has a direct effect on cost. Among that 35% of highly stressed employees above, there was a 50% increase (an extra $600 dollars per worker each year) in health care utilization cost to each employer. If depression is involved, the additional cost is even higher, as these employees use their health care plans about 70% (an extra $950 per employee) more often than average. Combine depression and stress, and the cost is astronomical – an additional $2,000 dollars per worker each year. Regardless of where the stress originates, the above is a tremendous added cost to the employer.

Employers are also starting to connect the dots between stress and productivity in a service-based economy. When stress slows the productivity of someone pushing a button on a conveyor belt, it may lower productivity. Change the stressed employee to a customer service position, and there can be a direct loss of business. Employer realization to all of the above has prompted many to develop programs to slash the long-term cost of stress, boost employee morale, and constructively boost productivity.
The employer essentially has two choices:
1. View and treat reported cases of stress as an employees' problem.
2. Acknowledge the real nature of the problem and take action to do something about it.
An increasing number of employers are opting for the second approach. Some are even actively engaged in reducing workplace stress by changing the key elements of the workplace, a tactic known as "organization of work."

Organization of work is not a one-size-fits-all concept, but it essentially addresses the way jobs are designed and performed, along with any organizational practices that influence the job design. A key element to the success of organization of work will be involving employees in the design, implementation, and evaluation of the program. There should be an open dialogue, without fear of repercussion, for employees to assist in identifying and resolving problems.

An appealing element of addressing workplace stress with organization of work is that it doesn't have to be a massive undertaking. In fact, it is best to build the program one piece at a time. For example, many companies will start off with an employee survey. Keep in mind that the focus should be working conditions and work-related factors that are not based on an individual judgment, but rather an employee consensus. The expertise of a consult might be beneficial if you get stuck during the process.

Sadly, current employees are not the only ones experiencing unprecedented levels of stress. A recent study showed the teenagers and the college-aged are claiming anxiety and mental health issues five times greater than their counterparts did during the Great Depression era. So, employees that are struggling with stressed employees today can possibly look forward to facing the challenge of a whole new batch of stressed employees in the future.


Click here to return to Amity Insurance E-Newsletter October 1, 2010.