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The Cost of Job Stress

There is a cruel irony to the phrase “making a living.” For many people in today’s fast-paced, rapidly changing global economy; making a living often means making themselves sick. Companies are increasingly trying to do more with less, often at the expense of their employees’ health. More and more workers are spending long hours at the office, struggling to stay on top of their work and fearing for the future of their jobs — all of which leads to stress. And therein lies perhaps the cruelest irony of all. The job stress and burnout that result from running a leaner, meaner operation often leads to lower productivity, higher absenteeism and increased use of employers’ health plans. In short, the way we work is not only costing American workers their health but American businesses money.

Job stress should not be confused with pressure or challenges. Everyone faces pressure and challenges on the job. The National Institute for Occupational Health and Safety (NIOSH) defines job stress as “the harmful physical and emotional responses that occur when the requirements of the job do not match the capabilities, resources, or needs of the worker.” In other words, unlike pressure or challenge, job stress is marked by an absence of control and feelings of being overwhelmed at work. The effects of this phenomenon can be devastating.

A growing body of evidence suggests that job stress is associated with a wide variety of physical ailments, including cardiovascular disease, musculoskeletal disorders and psychological illness. A 1992 St. Paul Federal and Marine Insurance Co. study found that problems at work have a more direct affect on workers’ health than any other life stressor, including family or financial problems. Consider the following:

  • According to a recent Los Angeles Times article, U.S. and Japanese workers who put in more than 50 hours a week experience higher rates of hypertension.
  • A Belgian study found that employees with highly demanding roles but little decision-making authority suffered from elevated blood pressure.
  • China’s emergence as an economic power has been accompanied by an increase in cardiovascular disease.
Job stress is equally pervasive in American society. According to a Princeton Survey Research study, three-quarters of employees believe that there is more on-the-job stress than a generation ago. A Northwestern National Life study found that one in four employees viewed their jobs as the No. 1 source of stress in their lives. And according to Gallup, 80 percent of employees suffer from job stress with nearly 40 percent reporting that they need help in managing their stress.

Job stress is as much a business issue as it is a health issue. Job stress costs American businesses hundreds of billions of dollars a year in employee burnout, turnover, higher absenteeism, lower production and increased health care costs. The American Psychological Association estimates that 60 percent of all absences are due to stress-related issues, costing U.S. companies more than $57 billion a year.

Perhaps the single biggest expense issue facing any American business, big or small, is the rising cost of health insurance. According to the Kaiser Family Foundation’s “2004 Annual Employer Health Benefits Survey,” employer-sponsored health insurance premiums increased an average of 11.2 percent in 2004 — the fourth consecutive year of double-digit growth. Premiums for employer-sponsored health insurance rose at about five times the rate of inflation and workers’ earnings: 2.3 and 2.2 percent respectively. According to a 2004 New York Times article, health care costs are the second largest structural cost for manufacturers behind corporate income taxes.

Job stress is a key driver of health care costs. According to the Journal of Occupational and Environmental Medicine, health care expenditures are nearly 50 percent greater for workers reporting high levels of stress. This should come as no surprise. Many studies suggest that stress is a contributing factor in the development of chronic and degenerative conditions, such as heart disease and diabetes. While these conditions are ones that people can live with, they are expensive to treat. To the extent that stress contributes to these conditions, reducing stress will have positive benefits in terms of bringing health care costs down.

Many companies understand the impact of job stress on their business and have taken steps to address it. There has been a steady proliferation of employee assistance, wellness and stress-management programs in the marketplace. While these kinds of programs can be highly effective at helping employees cope with job stress, they don’t address the root causes of the problem. Research indicates that the single greatest cause of job stress is unhealthy workplace practices and conditions.

There are a number of organizational qualities that promote job stress. These include:

  • A management style that does not allow employees to participate in the decision-making process.
  • Poorly designed jobs that overwhelm workers with a multitude of meaningless, mundane tasks.
  • A social or cultural environment that leaves workers feeling isolated and unsupported.
  • Conflicting or uncertain job expectations.
  • A lack of job security.
  • Unpleasant or physically dangerous work conditions.
According to NIOSH, the first step towards preventing or reducing job stress is to talk to your employees, be it through focus groups or a more formal survey. Measure their perceptions of job conditions, management and the work environment. Collecting this kind of data will help you design an effective intervention, be it through management training, revising job descriptions or improving internal communications. Finally, it is important to continually review the interventions you had implemented, asking employees about how they perceive their jobs and the company.

In many respects, the qualities of a healthy workplace mirror the six building blocks of a Winning Workplace. It means creating an organization that emphasizes trust, respect and fairness. It means communicating openly and honestly with employees and providing them with a vehicle to provide feedback. It is a matter of recognizing the contributions of workers and providing them with opportunities to grow as individuals and professionals. It means encouraging employees to work together as a team. And it means designing jobs with enough flexibility that employees do not have to sacrifice their personal lives in order to meet work objectives. Building such a work environment has a direct impact on the health of employees and an indirect affect on costs and productivity. In other words, a healthy workforce contributes to a healthy business.


Mary Corbitt Clark

Mary Corbitt Clark is the Executive Director of Winning Workplaces, a not-for-profit organization that helps small and midsized businesses create better work environments. She has held senior management positions in human resources and organizational consulting firms, specializing in small to midsize companies, and has established human resources functions for entrepreneurial… MORE >

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