The True Cost of Stress in the Workplace

Stress has become virtually synonymous with work in the modern age. Many members of the workforce believe that stress is simply the price they pay for earning their living. The idea of work-life balance is often upheld as a highly desirable goal, but is not always attained, as stress in the workplace increases and becomes more prevalent. Keep reading the blog as we explore the true ramifications of a stressful working environment.

Unchecked Stress Drains Your Most Valuable Resources

The really ironic thing is that stress is often seen as a necessary evil for the completion of good and work and reaching company goals when the truth might be that it is actually damaging to both productivity and company finances. According to author Jeffrey Pfeffer, who explores the phenomenon of workplace stress in his book, Dying for a Paycheck: How Modern Management Harms Employee Health and Company Performance and What We Can Do About It, workplace stress is driven by a number of factors including long hours, family-to-work conflicts, employees having low control over their jobs and environments, and high work demands.


Most employees face a combination of some or all of these and while their detrimental effects on individuals may be well documented, the costs they incur for employers aren’t discussed as often. Pfeffer divides these costs into two categories: productivity costs and financial costs.

The Productivity Price of Stress

Pfeffer cites a study on the effect of overtime work in 18 industries across the US, in which it was found that the use of overtime hours lowers average output per hour worked. It was found that a 10 per cent increase in overtime results in a 2.4 per cent decrease in productivity. The optimum number of work hours per work is 48 hours. As workers go above that, their productivity declines in proportion to the additional hours worked.

Productivity will certainly be affected by other stress factors aside from overtime as well, although their effects are less measurable.

The Financial Costs of Stress

In order to express the financial costs of stress in solid metrics, Pfeffer conducted a study on the health-care costs incurred by employers on the basis of different workplace conditions. It was found that high job demands resulted in a total cost of US$46 billion in annual excess health-care costs, across the sample. Long work hours cost US$13 billion and work-family conflict cost around US$24 billion. These figures are indicative, not only of a definite personal cost of stress incurred by employees but also of a significant financial cost that employers essentially bring on themselves through the kind of work environments they foster.

The possible solutions to these problems would require at least another blog to cover. It’s very obvious though, that stress is bad news for everybody, not just employees, and needs to be carefully managed and reduced.

Tower Group is Here to Help You Manage HR Stress

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