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The Cost and Removal of Workplace Stress

March 2017

Workplace stress, also referred to as occupational stress, is defined as a “perceived imbalance between the demands made of an employee and the resources they have available to cope with those demands." Four out of five American workers are thought to be affected however; few employers understand the ramifications that this stress has on not only their business, but also their bottom lines.

Workplace stress leads to absenteeism, employee turnover, increased insurance premiums and workers' compensation costs, lawsuits, and diminished productivity. These stress-related consequences are costing U.S. businesses over $300 billion each year.

Since stress is a subjective experience, it can be difficult to define. Many argue the discrepancy between where ordinary life stress ends and occupational stress begins. Occupational stress is thought to derive from one or more of the following categories:

  1. Factors unique to the job. These factors include the employee’s ability to cope with the amount of hours worked, the level of productivity expected and the physical work environment.
  2. Role in the organization. This is associated with the employee’s hierarchal ranking in the organization. Those in upper management who are required to oversee the corporate operations and subordinate employees are often more susceptible to this trigger.
  3. Career development. Job security, opportunities for promotion and ever-changing job expectancies contribute to this category.
  4. Interpersonal work relationships. This involves the negative stress implications of interpersonal relationships existing within the workplace. Such negative contributors include harassment, discrimination, and other derogatory communication.
  5. Organizational Structure/Climate. Overall communication, management style, and responsibility allocation contribute to this potential occupational stressor.

Some research has shown that as many as 35% of American workers experience high-levels of on-the-job stress contributed by the previously listed factors. 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.

To combat such a negative impact on your business and its employees, business owners can consider the following suggestions:

  • Ensure that an employee’s workload is compatible with their capabilities and resources
  • Monitor workload
  • Provide opportunities for social interaction among employees
  • Eliminate workplace discrimination
  • Support a work-life and personal-life balance through family-friendly policies and benefits
  • Encourage employee Wellness initiatives
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