Call us on
0161 941 2426

Why Businesses Shouldn't Underestimate the Cost of Stress

Posted On: 23/07/2016

While individuals and organisations can have problems understanding stress, it’s clear that stress can have significant organisational consequences, far beyond its immediate impact on the individual.

Businesses like to be able to see and measure a return on investment. In fact they can also obtain clear estimates of the cost of stress. This is important, because it highlights the fact that stress is more than a people issue.

Organisational Consequences and Costs

There are good, sound economic reasons for businesses to tackle stress in the workplace. Whereas there is an ethical imperative, and a duty of care towards the wellbeing of staff, businesses should also be aware of what stress, if left unchecked, can actually cost them in monetary terms.

The key areas where businesses are affected by stress are: sickness absence, productivity and staff turnover. For each of these there is a formula that CIPD recommends for estimating the cost of the effects of stress.

For example, for sickness absence: estimate the proportion of stress-related sickness absence; estimate the annual cost of sickness absence per employee; multiply these two figures then multiply this total by the number of employees in your company.

It’s not always straightforward to come up with the estimated costs to do the calculations, particularly in the case of presenteeism, but employee surveys are a good way of gathering pertinent information. In fact employee engagement is a key way of both measuring the effects of stress and taking action to deal with it.

Taking a balance-sheet approach is a useful exercise: it doesn’t mean you shouldn’t care about the wellbeing of your employees, but it does illustrate the stark, economic consequences of not combatting stress in the workplace.

The economic argument for tackling stress is always a persuasive one because while stress as a condition is sometimes hard for people to detect, diagnose and even define, the figures themselves tell a story.

Businesses recognising the need to have policies and procedures in place to deal with workplace stress and to give employees the right level of support are advised to seek professional guidance.

Get In Touch

What Our Clients Say

“"We have worked with P3 for over 3 years and have found the service we have been given to be invaluable. As a growing organisation, the HR element was taking up more and more of the Board's time. HR are always present at our Board meetings and the time we have saved ourselves allowing this key business function to run smoothly, efficiently and as it should do has paid huge dividends for our growth and our staff retention. Our people and culture have not looked back since we made this decision. "”

Peter Birkett, adept4 Ltd

Read Our Latest Blogs

Supporting An Ageing Workforce

Posted On: 19/06/2019

Last year the Women and Equalities Committee published a report concluding that the skills of more than one million employees aged 50 or over were being wasted due to discrimination, bias and;

Read More > >

How To Maintain Staffing Levels During Summer Holiday Season

Posted On: 07/06/2019

The first day of summer is within touching distance.  A time for ice-cream, festivals, outdoor movies, cosy drinks on your patio and even the boss doesn’t look so stern wearing a short-sleeved;

Read More > >

Subscribe to our HR News updates

Get the latest updates from P3 and great advice on how your HR can be improved.

To Top