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Prepare the organisation - Further information

"We knew we had a problem but we had stress on the too hard pile."
Senior Manager, Probation Service

The sentiment expressed above is not uncommon, many senior managers acknowledge they have a problem but are afraid to tackle it for fear of what might be revealed. While we understand this viewpoint, it is not generally supported by our experience. We have found that once senior management within an organisation decide to tackle work related stress, things are never as bad as they had anticipated. In most organisations, even those perceived to be poor performers, there are areas of good practice that can be propagated to other areas of the business, as appropriate.

The key message here is that, left unchecked the cost to the business, associated with work related stress and ill-health will continue to grow. Tackling this issue has the potential to stem these losses to the business and improve the efficiency and effectiveness of individual employees and the organisation as a whole.

Making the business case

When preparing a business case to tackle work related stress there is a tendency to focus only on what is often referred to as the headline figure of sickness absence costs. That is the direct cost of an employee being absent from their work. This figure does not accurately reflect the full cost to the organisation of an absent employee. There are many other factors and associated costs that need to be considered in order to obtain a figure that better reflects the full cost to an organisation. The factors to consider are mostly related to the hidden costs associated with maintaining business output. These include management time associated with replacement staff, reallocation of duties and the impact on the so-called ‘healthy employees’ or co-workers.

Costs to employers 2005/2006

Sick Pay Recruit costs Admin costs Comp & Ins Totals
£1.6 to £1.8 billion £13 million £29 to £32 million £1.3 billion £2.9 billion to £3.2 billion
graph showing costs of ill health and injusries to an organisation

The above data are the estimated costs at a national level. The costs associated with ill-health, for a specific organisation, are in some ways easier to calculate. Tools are available to enable organisations to calculate the full cost of ill-health.

One group of factors that are often neglected are those associated with ‘presenteeism’. Presenteeism, in the current context, refers to employees who are suffering from the effects of work related stress but remain at work. Although these employees are not absent there are still costs to be taken into account. These costs relate to individuals operating at a lower level of productivity because they are suffering from work related stress. Some estimates (see further reading) have put this reduction in employee productivity due to employee health related presenteeism as high as 33%. Therefore, potentially, workers who cannot do their work efficiently because of stress could cost an organisation more than those who cannot work.

Further reading:

Updated 2015-02-12