Most conscientious HR leaders today understand the importance of wellness programs for employee stress management.  Reducing workplace stress contributes to long-term employee happiness, worker retention and productivity, leading to a new trend in more comprehensive mind and body wellness initiatives.

The problem that many HR pros face? Convincing upper management that programs especially focused on stress management are not just “nice to haves” but rather, essential tools to improve both employee health and the health of the business. Stress leads to higher healthcare costs for businesses, lower productivity among employees, and lower employee morale, leading to lower retention and associated hiring costs. In short: Stress in the workplace is a big deal, and it’s worthwhile for the C-suite to take notice.

Higher employee stress leads to higher healthcare costs

A busy CEO or CFO might scoff at team-building exercises or claims that making employees “feel good” is important, but employee wellbeing is much more than that–and the numbers don’t lie: Unhappy, stressed-out workers are often less healthy and more expensive!

There are hundreds of scientific studies out there to support this. Here are some sobering facts that should interest even the most skeptical C-level executive, all directly related to the high costs of employee healthcare.

• Health care expenditures are nearly 50% greater for workers who report high levels of stress.

• Lost productivity due to insomnia can cost companies $3,156 per employee (and $2,500 per employee with less severe sleep conditions)

• Employees under high levels of stress cost up to 40% more than employees with manageable stress levels.

• Four of the top ten most expensive health conditions to U.S. employers are related to heart disease and stroke (high blood pressure, heart attack, diabetes, and chest pain)…and stressed out employees are more likely to experience a stroke.

Preventing high levels of stress at work and facilitating new habits to help employees to better manage stress are goals of a quality stress management program. Thinking ahead and getting such a program in place now can help prevent serious health conditions, prevent employee burnout and lower healthcare costs, saving your company more money in the long run.

Higher employee stress leads to lower productivity

When we feel stressed, it can be hard for employees to get through the day, let alone do their best work. Multiply that foggy or anxious feeling of stress across many workers and departments, and you’ve got a serious barrier to productivity throughout your company.

There’s a lot of scientific evidence out that that makes the connection between stress and productivity crystal clear. Beyond the enormous cost of healthcare, here are some key results we’ve found:

• According to a 2014 study [PDF] conducted with hundreds of subjects by the University of Warwick, employees who consider themselves happy are a solid 12% more productive.

• The United Nations International Labor Organization declared occupational stress to be an “epidemic” with costs estimated at upwards of $200 billion per year.

• A 2005 study from the Sloan Work & Family Research Network found that employees with high levels of feeling overworked reported themselves 20% more likely to make mistakes on the job.

• Robert S. Rubin, an associate professor of management at DePaul University, Chicago, noted in the Wall Street Journal that “frenzied and frantic” behavior is even contagious, with the ill effects of stress spreading around an office if it isn’t contained.

High stress leads to increased HR costs

Last but not least, stress is a huge factor in lowered employee morale and happiness at work. Studies have shown that when employees are burdened with high levels of stress, their level of engagement at work is directly affected. This in turn leads to higher business costs, since disengaged or low-morale employees are not performing at their best, and when they leave, replacing them is often difficult and expensive. We pulled some of the most telling studies on the cost of employee disengagement here:

• According to Towers Watson’s Global Benefits Attitudes survey, high levels of stress directly correlate to increased levels of employee disengagement.

• Employee disengagement costs everyone–a lot. A recent Gallup survey found that 8% of workers worldwide and 70% of employees in the U.S. are either “not engaged” or “actively disengaged” in their jobs. Gallup found that actively disengaged employees cost U.S. businesses $450 to $550 billion per year.

• Replacement hiring costs 6 to 9 months’ salary on average. For a manager making $40,000 a year, that’s $20,000 to $30,000 in recruiting and training expenses. Some studies estimate twice as much, depending on position and industry.

• Training costs are steep. Some estimate that training a new employee costs 10-20% of their salary – far less than it might take to keep the old employee happy enough to stick around.

Including stress reduction in wellness programs can help

The destructive power of stress in the workplace can’t be overstated. From raised healthcare costs to lost productivity, to expensive employee turnover, there are plenty of reasons for HR leaders and C-suite executives to take action.

Stress leads to all manner of workplace ills, such as lowered team perspective, lowered desire to help others or solve problems, decreased motivation and employee disengagement. A King’s College London study indicates that not only are low-morale employees not working to their potential, they are more likely to engage in counterproductive behavior, further spreading that low morale like a virus.

The good news is that the current new trend in comprehensive, holistic mind and body wellness initiatives has meant that there are a great deal more options than even just a couple of years ago. Now, HR leaders have some choices as to what type of stress reduction programs to offer their employees. Investing in employee wellness programs can increase overall employee happiness and workplace harmony, which leads to more engaged workers, less turnover, and many dollars saved.

Do you offer a stress reduction program at your company? We’d love to hear about what has worked for your employees, and share what we’ve seen work. Email us or simply visit our Contact page to continue the discussion. Or, click the button to request a demo of our program.