How Stress Is Costing You Your Business

Business owners make stressful decisions for the sake of their company — work longer hours, placate toxic but irreplaceable employees, take on more responsibility, delegate less. They do what they have to do. 

These leaders expend time, resources and money because they get a return on their investment, but often that ROI ignores one vital factor: the overwhelming cost of stress. According to the American Psychological Association, at a minimum stress causes U.S. businesses $300 billion a year, a figure that would certainly be revised upward during crises like the Boeing 737 Max airplane failure or the pandemic. 

Company Stress

Stress has physiological, psychological and situational components, such as headaches that make work difficult and slow decision making, fears that cause hesitation and limit innovation, day-to-day changes in staffing that impact productivity and KPIs. The results of stress are measurable in terms of:

Low productivity: Although employees show up to work despite being stressed, their performance plummets. A Gallup poll found that 51% of stressed employees are disengaged; and a Colonial Life poll found that 41% are less productive.

Compromised image: Stress reveals itself to customers in part as an unwillingness to help and a poor attitude. This behavior alone can reduce revenue and provide and edge to competitors. A 2016 study at Harvard Business School showed that a a one-star increase in Yelp rating led to a 5% to 9% increase in revenue. Businesses can’t get there with stressed employees. 

Financial losses: A business leader’s job is making profits, and a stressed workforce spells losses. With 92% of current human capital claiming so much stress it impacts their work and 53% of those actively requesting help with managing their stress, CEOs do not have the luxury of sticking their head in the sand or believing people just need to “just do their jobs.” Post-pandemic stress and anxiety is real and must be addressed to maintain profitability.

Lawsuits: Stress causes mistakes and errors in judgment due to the many biological and physiological consequences. This opens up irreversible damage to the business and its customers. Mistakes and errors lead to expensive lawsuits that take a huge toll, both personally and financially. In a business where stress levels are high, carelessness and mistakes accumulate exponentially. 

Absenteeism: The team member simply doesn’t show up, piling more stress on team members who do show up. Unplanned absences cost about 14% more in loss productivity than planned absences, according to research by the Society of Human Resource Management. That cost includes the lower productivity of those called in to cover for the absent team member.

Presenteeism: Absenteeism is a common data point in evaluating the health of a company’s human capital. This is a very small number compared to presenteeism. That is the true indicator of the stability and productivity of a team. Workers feeling obligated to show up to work ill, stressed or less than their peak only means poor outputs. 

Practical Responses to Stress

Executives recognize the impact of stress on their company. However, in the midst of stressful situations, solutions are difficult to envision, let alone put in practice. What’s worse is the lack of simple, cost-effective tools that focus on workplace stress and are universally compatible with all departments. The following four actions attack some of the root causes of stress:

Stop tolerating. When a business leader sees a problem, it’s important to find a way to confront it so it does not add to the stress, sending the team spiraling into burnout. 

Involve employees in decision making. A 2018 survey found that in both small and large companies, the major contributor to stress was poor communication, according to 40% of respondents. Group Decision Making practices increase transparency and turn compliant workers into commented teams. 

Make health a priority. If people aren’t healthy, they don’t work. No work equals no profits and a constant focus on surviving instead of innovating. 

Encourage learning. Schools don’t teach stress management. It’s a skill that people, especially employers, leave up to their staff to get on their own. That’s a high risk considering the impact stress has on profits. Business leaders should take the lead and regularly offer stress management programs, workshops and resources. Building a culture around working with less stress enables loyal employees to make room for what they’re expected to focus on.  

Jen Butler, CEO of JB Partners, is the creator of Get SMaRT – Stress Management and Resilience Training for the workplace. The SMaRT Club learning platform is the leading self-guided tool for all companies looking to reduce stress and increase profits. Butler also travels throughout the United States to provide business leaders with one-on-one, onsite guidance in managing stress, turning around their business, and achieving real, long-lasting results.

Did You Know: A 2016 study at Harvard Business School showed that a a one-star increase in a business’s Yelp rating led to a 5% to 9% increase in revenue. Businesses can’t get there with stressed employees.