Understanding stress is not just about people and their needs. It brings with it potentially damaging costs to businesses and organisations. These costs are measurable in terms of things such as sickness absence, productivity loss and staff turnover.
Business Implications of Stress
“It’s not only the individual who suffers from the consequences of stress,” comments Charlotte Gallagher of P3 People Management in Hale. “Obviously the personal impact can be considerable, but there can also be a long-term business impact.”
Businesses should not underestimate stress’ organisational consequences. It can operate by stealth, meaning that individuals may not be fully aware that they have it when it begins to affect their work attendance and performance. If organisations do not act quickly to address these issues, the impact can soon be felt.
High Absence and Low Productivity
“If individuals are stressed, they’ll take more time off,” Charlotte points out. “It may also be the case that staff feel they cannot escape feeling stressed while being in the workplace.”
Another scenario is where stressed employees remain in work, possibly unaware of exactly what it is they are suffering from. Consequently their productivity levels drop. This is presenteeism.
“Simply attributing these things to poor employee discipline isn’t going to address the root causes,” Charlotte states. “They are more likely to be organisational consequences of stress.”
Calculating the Cost of Stress
Just as businesses want to be able to calculate a return on investment, so they can estimate the cost of stress. For example, one of the most common organisational consequences of stress it high staff turnover and consequent recruitment costs. This can be done with a straightforward formula, as Charlotte explains.
“You first estimate the proportion of staff turnover that is stress-related. Next, you estimate the cost of replacing an employee. You then multiply these two figures together and then multiply the combined figure by the number of employees who have left the company in the past year”.
Businesses can use similar formulas to calculate the cost of sickness absence and presenteeism.
“The point is that tackling employee stress isn’t just an ethical issue,” Charlotte concludes. “The wellbeing of individuals has a clear economic impact on the wellbeing of an entire business. Getting to grips with stress should, therefore, become a key business priority.”
If you would like to discover how to reduce the economic costs of stress in your business, please call P3 People Management on 0161 9412426.