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In the hustle of meeting bottom lines and pushing for growth, small business owners often overlook a silent saboteur lurking within their ranks – employee stress.
According to a study from the University of Massachusetts at Lowell, estimates that work-related stress costs American businesses upwards of $300 billion each year.
Employee stress is not just about the occasional headache or a day off work.
Stress is a persistent, pervasive issue that can drastically reduce employee engagement and productivity.
Workers experiencing severe stress from personal financial or family issues, health issues, and other work and non-work-related problems generate costs in the form of higher absenteeism and presenteeism.
Prolonged stress can lead to serious physical and mental health problems.
Stress is also a known contributor to the cost of accidents and injury at work.
Ultimately, poorly managed stress can jeopardize your competitiveness and survivability as a small business.
For small businesses operating with tight margins, the costs that come from stress at work can hit especially hard.
Reduced productivity, increased error rates, and higher healthcare utilization costs directly affect the bottom line.
But the costs don’t end there. Employee turnover can be a massive expense for small businesses, with the cost of replacing an employee ranging from half to two times the employee’s annual salary.
The financial costs of job stress are stark. Consider this: 40% of job turnover is due to stress, and healthcare expenses are about 50% higher for workers reporting high levels of stress.
When it comes to employee injuries and workers’ comp claims, the expenses are staggering. And these costs aren’t just numbers on a spreadsheet; they represent real people and real lives impacted by stress.
With today’s economic pressures, inflation, and credit challenges, stress among employees is intensifying.
The PwC 2023 Employee Financial Wellness Survey illuminates this trend. It notes that financially stressed employees are increasingly distracted. This, in turn, costs employers in lost productivity.
But many workers skip necessary healthcare to manage the effects of stress because it’s just too expensive for them. This includes crucial mental health services. So they aren’t getting the help they need to manage their stress more effectively.
When healthcare is bypassed, stress doesn’t just simmer—it boils over, impacting employees’ ability to perform their jobs effectively.
This can result in a vicious cycle where stress leads to illness, and illness, in turn, leads to more stress due to mounting healthcare bills.
And the switch to remote work has brought its own set of mental health challenges. The World Health Organization reports a 25% increase in depression and anxiety globally, which is largely tied to the transition to remote work environments.
Employers are not helpless in the face of rising stress-related costs and its effects on their workforce.
A smart and focused effort at combating the negative effects of employee stress can pay big dividends. Effective stress management reduces sickness absence costs by up to 20%.
Implementing a wellness program can take many forms, but the goal is always to promote healthier lifestyles and, by extension, reduce stress. Elements of a robust wellness program might include:
Traditional health insurance has its place.
But it’s extremely expensive. And high deductibles and coinsurance costs can mean needed health care is unaffordable for many lower-income workers and their families, even with insurance.
According to a recent New York Times report, nearly 4 in 10 Americans are putting off needed medical care because they can’t afford the out-of-pocket costs.
This has massive downstream effects in the form of higher future health care costs, lack of engagement, employee stress, presenteeism, and absenteeism.
As an employer, you can help solve that problem in a variety of ways.
Here are some successful strategies you can implement:
Health sharing, also called medical cost sharing, is different from the traditional health insurance model.
Health sharing is a non-insurance alternative based on a non-profit, voluntary association of people who share one another’s health expenses.
In most cases, health sharing is a much more affordable alternative to traditional group health insurance and can foster a sense of community support.
That can generate significant savings for both your business and for your employees in overall health care costs.
