The cost of stress on business today

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Stress in the workplace is a growing concern for employees and employers in Australia.

We are well aware of the impact workplace stress can have on the wellbeing of an individual - these include anxiety, cardiovascular disease, musculoskeletal disorders, and gastrointestinal disorders just to name a few, but we are only just beginning to fully understand the economic impact of workplace stress, with national and international statistics showing the prevalence is grown steadily over recent years.

Recent figures are showing that while compensation claims made by Australian employees fell significantly between 1996 and 2004, the number of stress related claims almost doubled. (Medibank)

The Effects Of Stress On Business Today

Whether at the executive level or client-facing, each employee’s ability to handle stress affects the bottom line, both directly and indirectly.

The two primary costs of stress that often go unnoticed are the productivity cost and the financial cost.

When it comes to productivity cost, stress can affect this in a few ways.

When under stress, an individual cant perform at their peak. Chronic stress inhibits clear thinking, judgment and blocks creativity. Under stress, employees feel less energetic, more agitated, and get less sleep due to increased demands at work — causing them to experience physical and psychological symptoms, fight with people close to them, and have more accidents on the job, among other things.

Also, with excess pressure and demands, people are working longer hours to get the job done, or to prove they are a valid employee. Long hours are pervasive no matter what job or industry you’re in and there is a common mindset nowadays that if you are only working the traditional 9 am - 5 pm, you’re only doing a half day! The reality is that this stress that is driving people to work longer hours, is actually costing the business in productivity.

On overtime and productivity, Stanford professor Jeffrey Pfeffer said “a study using panel data for eighteen industries in the United States found that the use of overtime hours lowers average output per hour worked for almost all the industries in the sample. A 10 percent increase in overtime results in a 2.4 percent decrease in productivity.”


The impact on productivity is only the beginning. The second, far greater effect is the financial cost of stress. The financial cost of unhealthy workplace stress is rarely taken seriously yet the statistics are alarming.

•    In Victoria, stress is the second most common cause of workplace compensation.

•    Beyond Blue reports that depression and anxiety cost Australian businesses about $10.9 billion a year.

•    Absenteeism costs Australia around 92 million working days each year, with the average daily cost rising from $308 in 2013 to $340 in 2014. The direct cost to employers was found to be around $10.11 billion per year.

•    The cost of presenteeism (not fully functioning at work because of medical conditions) is estimated at almost $26 billion in 2005–06 (Medibank Private, 2005)

•    The average total cost of a mental stress claim is $140,000 (Aust. Govt. Compendium of OHS and Workers’ Compensation Statistics, 2009)

•    Stress is a significant cost to companies across the developed world: it’s estimated that in Australia, US, UK and Germany, $200-$300 billion a year is lost on absenteeism employee turnover diminished productivity accidents, and medical, legal and insurance fees.

•    Additionally, stress is now shown to be responsible for 80% of all diseases and illnesses. In the US, 60%-90% of all visits to doctors relate to stress.


Given these statistics, it makes sound business sense that corporate Australia, America, the United Kingdom, and Germany are all making major commitments to stress management.


A Company’s Success Depends Greatly On Its Employees: Their Health, Contentment, And Performance.


To quote Richard Branson: “Take care of your employees and they’ll take care of your business”.


In addressing this issue in 2015, former chairman of the Australian Competition and Consumer Commission (ACCC) Professor Alan Fels, said: “poor resilience is more significant for our economy than tax and micro-economic reforms.”

This day and age it’s essential that organisations learn how to develop and build resilience in their workplaces to manage and overcome workplace stressors. By creating resilient individuals, and therefore a resilient workplace culture, organisations have the potential to improve performance and cohesion across all sectors.


Its been show healthy, contented employees are:

•    more productive,

•    more loyal,

•    less likely to take leave and sick days,

•    will experience higher levels of engagement,

•    have improved morale


These qualities combined translate to decreased levels of absenteeism and internal staff turnover. This, in turn, will enable higher levels of profitability, innovation, creativity, productivity and customer loyalty.

A culture of wellbeing can dramatically benefit the whole organisation. With the right program and cultural shift, employees can be empowered to improve and maintain their own health and wellbeing, creating resilience to workplace and life stressor.


Be in touch to find out how our programs can help minimise and prevent the impact of workplace stress in your organisation.  

Author: Tegan Wallis

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Tegan is an Naturopath, Ayurveda Health Consultant and Yoga Teacher at Griffith Consulting's sister company, Veda Wellness.

Tegan is one of Griffith Consulting's key program facilitators and specialises in workplace health & wellness. 

For more information about Tegan or her services, please go to: 

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