Special Report

Employee Stress- How much is it really costing you?

By Kathryn Watson

Chances are if your organization is like most it probably doesn’t have a clue what employee stress is doing to its bottom line. According to Foster Higgins and Company, a Princeton, NJ company corporate health benefits cost the average company an amount equal to 45 % of it’s after tax profits.

The relationship between stress and health care costs has received and continues to receive considerable attention however the true price tag goes farther than the health care issue alone. Stress adds to the cost of doing business in a number of ways to include:

Accidents

Employees suffering the negative effects of stress experience a narrowing of attention, fatigue and lack of focus- a sure fire recipe for workplace injuries. In today’s world of “do more with less” employees often take shortcuts which lead to accidents. Workers who report high stress are 30 percent more likely to have accidents than those with low stress.

The Harvard Business Review reports that stress related claims averaged twice the cost of  non-stress related claims. The connection between stress, employee satisfaction, and the filing of claims cannot be ignored. A study of 3020 aircraft employees showed that employees who “hardly ever” enjoyed their job were two and a half times more likely to report a back injury than those who reported “almost always” enjoying their job.

The National Institute for Occupational Safety and Health defines job stress as "the harmful physical and emotional responses that occur when the requirements of the job do not match the capabilities, resources or needs of the worker. Job stress can lead to poor health and even injury."

Errors in Judgment and Action

 When an employee is under stress whether it be work related or arising as a result of personal issues their attention begins to narrow as they become absorbed and preoccupied with the problem creating the stress. The result is “tunnel vision” which make the stressed out employee more susceptible to missing important clues and information required to make both effective and safe decisions.

Under stressful conditions the human body naturally releases endorphins, nature’s painkillers. Besides killing pain these natural chemicals dull our ability to think and feel. Under extreme or chronic stress employees can become intellectually, emotionally and interpersonally dull. This can result in costly- and sometimes life-threatening mistakes.

Absenteeism

A recent survey of 800,000 workers in more than 300 companies found that the number of workers calling in sick because of stress has tripled in the last three years. An estimated one million workers are absent every day due to stress. - Workers who report that they are stressed incur health care costs that are 46 percent higher, or an average of $600 more per person, than other employees (Steven L. Sauter, chief of the Organizational Science and Human Factors Branch of the National Institute for Occupational Safety and Health)

In addition, workers who must take time off work because of stress, anxiety or a related disorder will be off the job for about 20 days, according to data from the Bureau of Labor Statistics.

Another study in the American Journal of Health Promotion finds that workers experiencing high stress were two times more likely to be absent more than five times per year. Lost productivity and replacement costs make absenteeism a costly consequence. American businesses lose an estimated $200-$300 billion dollars per year to stress related productivity loss and other cost. To put this in perspective, this amount is higher than the total cost related to all strikes and the net profit from all Fortune 500 companies! Can your company sustain that?

Litigation

Litigation is becoming a more common occurrence- not just in workers compensation claims, but also in employer-employee relations. When an employee perceives little or no control or power over their situation that employee is more likely to resort to extreme measures.

Many organizations are reluctant to identify and address worker stress, fearing that admitting workers are stressed will provide “ammunition” for employee lawsuits. Unfortunately this approach creates the opposite effect. St. Paul Fire and Marine Insurance Company produced a landmark report addressing this very issue. Stacy Morgan PH.D., co-author stated the following “discovering specific stressors and dealing with them is by far the best course of action for organizations. There is a better likelihood of litigation if a company ignores stress- related problems than if it addresses them up front.”

Resistance to Change

Many dollars are lost each year on traditional change management approaches because of the employees’ resistance to change.  This is because human beings are “hardwired’ to automatically revert back to familiar routines and behaviors when stressed. In a primitive survival context this makes perfect sense.

For instance, if you were being chased by a saber toothed tiger, it wouldn’t make sense to spend time thinking and deciding on all of the possible escape routes. You would just go on auto pilot and follow the route that enabled you to survive in the past.  This survival mechanism wreaks havoc in today’s climate of rapid organizational change.

As an employees stress level increases that person is more likely to revert to this primitive response- clinging to the old ways, even if they are no longer effective. Millions of dollars may be wasted or change management efforts that end up being sabotaged by this innate resistance to change triggered by stress.

According to NIOSH (National Institute for Occupational Safety and Health) even the most conscientious efforts to improve working conditions are unlikely to eliminate stress completely for all workers. For this reason, a combination of organizational change and stress management is often the most useful approach for preventing stress at work."

What is the solution?

We will always have stress. The solution is not to try and eliminate stress but rather to become “Stress Hardy”. Stress Hardy is when you are aware of negative stress and when you are aware of the feedback you are receiving from body and mind and you are responding accordingly.

As such a stress hardy person learns how to back off before the stress begins to undermine productivity and creativity. A stress hardy person is a valuable employee/family member because he/she manages his/her responsibilities effectively, without allowing stress to reduce productivity and cloud his/her vision of reality.

By recognizing the cost of employee stress, risk managers can help their organizations dramatically reduce their operating costs, while at the same time cultivating a productive, happy and healthy and stress hardy team.

For more information:

Kathryn Watson

Relax for Success

12337 Jones Road Suite 404

Houston, Texas 77377

http://www.relaxforsuccess.com

Tel: 281-827-7090

E-mail: kwatson@relaxforsuccess.com