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The Cost Of Stress - The Need To Monitor And Manage The Risks!

Quick Summary

Not only are there a lot of potential risks arising from the spread of stress within an organisation, it costs a great deal of money!
Personal Development
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10 min
1900 Words
4.04 K
You probably have some degree of interest in working with organisations with a view to helping them reduce or prevent risk. Between you, you pay attention to financial risk, product or process failure, safety issues, hazards, information risk, corporate governance etc. etc.

All very necessary concerns for organisations, people and economies, local and beyond. Yet, how much attention is paid to one of the biggest underlying risk factors within an organisation - the effects of stress.



Let us start with looking at some hard-nosed numbers.

* The CBI estimate that there is a cost of GBP 4bn per annum to industry as a direct result of stress related absence.

* This figure can rise to over GBP 7bn when you consider the loss of productivity!

* A recent survey by the HSE indicated over 550,000 cases of absence as a result of stress, depression and anxiety.

* A further 66,000 were absent with heart problems as a result of stress.

* There was a loss of nearly 13m working days in total.

* The average absence was 28.5 days for stress-related issues.

* 1 in 5 believe that their job is extremely or very stressful - that is 5 million people!

* Up to 40% of absence is related to stress.

* When stressed, performance can be reduced by up to 70%

* The CIPD estimate that stress costs industry GBP 522 per employee.

Had enough of this? Moving on to think about the risk of unmanaged stress to organisations we can start by looking at the "knock-on" risks.

Where an organisation is suffering from stress problems there will be a number of probable consequences, all with ensuing costs to the business. Also, what other risks might they contribute to?

1. If the atmosphere is getting worse there will be an increase in staff turnover. The costs of this are often overlooked or hidden behind some spurious justification. What is the direct cost of recruiting replacements? Oh, and the indirect costs? What is the cost of the loss of the experience and expertise? Staff turnover disrupts business in many ways and reduces profitability. Simultaneously, costs will increase too!

2. When individuals are suffering from stress their work performance is likely to deteriorate. The quality of decision-making will go down, possibly with faulty judgments being made. What is the risk to the organisation of this? It is probable that the rate of casual errors will increase too - with what consequences?

3. The relations between people will be effected, for the worse! As communication, support or teamworking deteriorate then people will not enjoy coming to work and levels of commitment are likely to reduce. This will probably mean that customer service gets worse too - again, with what consequences? (This will also apply to internal customers as well as external.)

4. As people become less motivated, and even demotivated, their productivity goes down and the impact of that is????

When we take into account the figures and also these probable knock-on effects, it makes sense to think about managing the organisation in a way, which will reduce the potential impact of stress. Indeed, that is a key part of one of the HSE initiatives and the introduction of their "Management Standards for Stress." Although these are not compulsory in themselves, there is legislation around it! There is the duty of care and responsibility attached to managers as part of the Health and Safety legislation. This means undertaking risk assessments, creating a positive environment and managing work activity to reduce stress and pressure at work.

Before going further into these, let us consider what is meant by this word, "stress". The HSE define it as "the adverse reaction people have to excessive pressure or other types of demand placed on them." A simpler option is to think of it as "the internalisation of pressure " where it exceeds your ability to cope." When we hear people say things such as "We all need some degree of stress", what is really being said is that we need some level of pressure to galvanise us to action. These pressures can come from all sorts of sources in a work and personal lives " and within ourselves too.

The figure below, "The Pressure Curve" shows what we mean by this. If the amount of pressure is not high enough, we do not feel the need to respond and so performance is likely to be down. (Wonderfully called "rust out" in certain circles.) Have you ever gone into a shop, restaurant or somewhere on a very quiet day? What was the response and service like" This end of the scale can lead to problems from the boredom level!

Get the pressure "right" and we are triggered to respond in the most effective way " and will operate at our "optimal performance" level. Moving along towards the end, the pressure levels increase and when this is too much the response is what most people think of as the classic stress problem, "burn out"

This rarely just "happens" suddenly. The pressures build up, the symptoms will become more and more obvious, the physiological and behavioural clues will be more noticeable. If the situation does not change, and the pressure become more manageable, the person who is at this end will probably start to become ill as the body sends out signals to say it needs to protect itself against this burnout.

The challenge facing managers with this concept is to identify what is the "optimal" amount of pressure for each person in their team. We each interpret pressures in different ways. What one of us may shrug off, another will think of as a crisis and vice versa. Add to this, we all have various pressures influencing us which are external to our work. These can range from personal relationships to financial, environmental to practical such as travelling. Then there is the human capacity to create pressure on ourselves through having unreasonable expectations or by finding things to worry about over which we have no control! How well do managers know their team members to assess their personal "negative" and "positive" pressures?

Why do the figures show such an increase in stress related problems in recent years? Has that much changed? In short, yes! There are a number of factors, and these are an indicator and not a comprehensive list.

* Workloads - reductions in headcount yet the same or more work expected of the people left behind

* The pace of life, hassles with getting around, speed of response to things

* Expectations - of self and others

* Lack of control over aspects of our lives

* Materialism

* Values not being met or having to operate in conflict with our values


What can organisations do to monitor and manage the stress risk?

One of the first things to acknowledge that there is a risk. Too many managers, especially senior executives, want to hide their heads in the sand and deny that there is a problem, or potential problem. They certainly do not want to suggest that they may be a significant contributor to the problem! Stress is not a problem confined to the executive suite! In fact, a higher percentage of the workforce down the line will suffer stress-related problems than senior management. Having said that, the consequences to the organisation and the people of an over-stressed senior manager can be horrendous!

The organisation can use a number of factors to assess whether there is problem. As in most forms of good management, gathering data is key. Work from facts and not only conjecture, though do not ignore it.

One of the "standards" is to look at absenteeism, both the levels and any patterns. Is the level static or increasing? Is any area of the organisation suffering more than the others? What happens when employees return to work, do you have a meeting with them to find out the real reasons for the absence, and what you can do to prevent them recurring? Also, will the organisation offer support to help the employee? If there is a pattern in one area, what is being done to address the cause? (Is it the nature of the work, or the manager or the environment?)

Look at the quality information. Is there an increase in errors, customer complaints or, are other standards not being achieved? Before chasing the teams or individuals and demanding improvements, explore why things have begun to slip. Talk to people about what is going on and how they feel.

What is happening to the staff turnover figures? Any trends apparent? Is the organisation using exit interviews to find the real reasons behind the departure?

To get a proper overview as an organisation, a good starting point is to carry out a simple audit. Questions in these areas will help to get an immediate sense of where the organisation is in terms of meeting the HSE criteria. It will also highlight where issues may occur.


* The culture of your organisation - how does it approach work-related stress?
* Demands on people, such as workload and exposure to physical hazards. Is work sensibly scheduled so that the workload levels are right?
* Control over their work and the way they do it - how much say do staff have? Are managers reasonable in their expectations and treatment of their teams?
* Relationships - how do you deal with issues such as bullying or harassment? (Another point, up to 1 in 5 people report they have been bullied at work.)
* Organisational change - how is it managed and communicated?
* Understanding of role - do individuals understand their role in the organisation? Does the organisation ensure that individuals do not have conflicting roles or challenges? (Is there a clear definition of roles?)
* Support and training from peers and line managers for the person to be able to do the core functions of the job - do you cater for individual needs and differences?


How well would your workplace score? Which areas could do with some attention? Remember, prevention is usually preferable to cure in most things. In this case, it is almost certainly a less expensive option! Pay attention to these factors and the organisation can start to address stress early on, preventing it becoming a problem.

Another thing for the management team to do is to develop an understanding of stress, its causes, symptoms and consequences. They can then begin to operate in a way which will create a healthier organisation. They can monitor the "health" using the approach above - and then set about managing to maintain a healthy environment. The secret to stress management is not about learning to relax, exercise or other coping strategies, although these do help. It is about getting to the cause of the problem and dealing with it from there. Good management practices, good communication, and supporting and caring for people will all help to reduce the risk of stress. Reduce stress and you reduce risks in many other areas of the business.
This Article is authored / contributed by ▸ Graham Y. who travels from Woking, United Kingdom. Graham is available for Professional Training Work both Virtually and In-Person. ▸ Enquire Now.

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