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The Cost of Stress: Three Steps to a Healthier, Safer Company

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Three Steps to a Healthier Safer Company


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You and your team often make stressful decisions for the sake of your company—work longer hours, placate toxic but irreplaceable employees, take on more responsibility, delegate less. You do what you have to do.

You expend time, resources, and money because you get a return on your investment, but often that ROI ignores one vital factor: the overwhelming cost of stress. According to the American Psychological Association, at 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.

Your Company’s Stress

Stress has physiological, psychological and situational components—for example, tense shoulders or a reliance on alcohol to relax after worrying, a fear of consequences if you don’t do everything yourself, and moments of frustration with the team, your peers, or your customers. The results of stress are measurable in terms of:

  • Low productivity. Although workers 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.1 When the work ethic is compromised, the results of that work are unreliable and could cause damage.
  • Compromised image. The most important marketing tool of any business is its image, which is why it cannot be compromised by manageable conditions such as stress within the team. Stress reveals itself to customers in part as an unwillingness to help and a poor attitude. An article in the Harvard Business Review suggests one measurement of a positive reputation: at least 20% of the stories in the leading media are positive, no more than are 10% negative, and the rest are neutral.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.3
  • Financial losses. Your business aims at making profit. A stressed workforce spells losses. Profit and financial inflow go up when services are at their best, and the only sure way to give the best service is by having a team that performs at its best.
  • Stress causes mistakes and errors in judgment, which open up potentially 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.
  • 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.4

Practical Responses to Stress

As an executive and team leader, you recognize the impact of stress on your company. However, in the midst of stressful situations, solutions are difficult to envision, let alone put in practice. The following four actions attack some of the root causes of stress:

  • Stop tolerating. The more team leaders and executives tolerate problem behaviors, including constant lateness, harassment, and bullying, the more permission they give others to continue, creating a negative work environment for everyone. When you see a problem, you need a way to confront it that does not add to the problem or send you (or your team) spiraling out of control.
  • Involve employees in decision making. Decisions with a direct effect on employees, such as changes in scheduling, workload, and rules, are better tolerated when employees understand the reasons behind the changes and are involved in making them. However, ignoring the concerns of employees on any business function, including financial, sales, marketing, and customer relationship practices, may have dire consequences as employees deal with the stress of following through on decisions they do not support or understand.  A 2018 survey by Wrike found that in both small and large companies, the major contributor to stress was poor communication, according to 40% of respondents.5
  • Make health a priority. Ignoring the warning signs of chronic stress leads to headaches, forgetfulness, fatigue, mood swings, sleepless nights, indifference, depression, burnout and more.  When overworked, underappreciated, isolated, and perplexed professionals share how they have been feeling, it’s as if they were reciting from a medical journal on the consequences of stress. But you can’t change what you refuse to acknowledge.
  • Accept help. When one business leader found herself overwhelmed by lack of support at home and in the office, she sought help in determining what to change. “We changed vacation time so I was always fully staffed,” she reports. “We changed scheduling. My productivity went up, my overhead dropped about 15 percent and my profit is way up.” Those practical changes not only reduced her stress but helped her company stay competitive.

Your Stress Resiliency

Stress is cumulative. When you are stressed, your team becomes stressed; when your team is stressed, you become stressed. Moreover, the more you are stressed, the less likely you are able to alleviate stress in others.

Stress self-assessments are not intended to be diagnostic (please seek medical guidance), but they can alert you to the role stress is playing in your life. You may have become so used to stress that you no longer recognize it as the source of physical, psychological, and situational discomfort.

One way to evaluate your stress is to take a daily stress inventory. Don’t let the end results add to your stress. Instead, consider that by recognizing your level of stress, you also identify the potential for improvement.

Daily Stress Inventory

On a scale of 1-10, with 1 being no stress and 10 being overwhelmed, what is your stress level?

What specifically is creating your stress?

What is your current stress response?

How is your stress response holding you back in this situation?

What can you accept, alter, or avoid right now to create a new situation?

Reversing Stress

As an executive, you may benefit from professional guidance in selecting management tools, interviewing and hiring staff, setting expectations, and ensuring staff interact properly with the customers and each other. There are well-known and proven techniques for delegating, improving organization and teamwork, and creating a smooth workflow. The solution may be as fundamental as finding the best words to motivate staff, learning how to run a daily meeting, or delegating the right role to the right person.

The most important first step is to acknowledge that a problem exists before it costs your company in terms of productivity, reputation, revenue, protection from lawsuits, and absenteeism. The second step is to act now, by refusing to tolerate unacceptable behaviors, engaging your team members, making health a priority, and accepting help. The third and perhaps most vital step is to recognize your own stress: a healthy, safe, productive company starts with you.

Key Takeaways

Stress has physiological, psychological and situational components—for example, tense shoulders or a reliance on alcohol to relax after worrying, a fear of consequences if you don’t do everything yourself, and moments of frustration with the team, your peers, or your customers. Side effects of a stressful work environment can be financial losses, compromised image, and low productivity. Luckily there are solutions to these problems such as setting boundaries, identifying priorities, and accepting help.

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