Should you be concerned about stress in your small business?

Nov 4, 2019 | Good Management

Perhaps you think due to the nature of what your employees do, a bit of stress is inevitable, or even a good thing. You may be right, but it’s worth taking some time to consider whether stress is an issue in your business and addressing it if so, because the impact of problem-stress on your business could be higher than you think.

What is stress?

The Health and Safety Executive’s (HSE) formal definition of work-related stress is:

“The adverse reaction people have to excessive pressures or other types of demand placed on them at work.”

Stress is a state rather than an illness, and there’s certainly an argument that a bit of pressure can be a good thing. However there’s a difference between pressure and stress. Stress occurs when this pressure becomes excessive, and if stress becomes excessive and prolonged, mental and physical illness may follow.

How much of a problem is it really?

According to HSE statistics, in 2017-2018 work-related stress, depression and anxiety cost employers 15.4 million days absence. That’s work-related stress alone, therefore doesn’t even include absence for stress/anxiety or depression unrelated to work. Even for very small businesses, those figures mean stress is something you should be taking seriously and addressing, regardless of any less-than-sympathetic responses that stress-related absence may elicit.

What does it cost businesses?

The CIPD current average estimated cost per employee per year of sickness absence is more than £600, and as stress is one of the leading single causes, a large portion of that average cost can be attributed directly to stress. Acas put the annual cost for UK employers of stress-related absence as between £30 billion and £42 billion, while the Sainsburys Centre for Mental Health has put the cost per employee per year of stress (including absence, lost productivity and increased staff turnover) at £1,035.

But as well as sickness absence cost, the risk of a legal claim for stress raises the question of compensation levels, which can easily run into the hundreds of thousands in serious cases where an employee has a breakdown, suffers psychiatric damage and in some cases doesn’t work again.

What are the legal risks?

Employers who fail to deal with stress are at risk of the following claims:

  • Negligence
  • Breach of implied terms in a contract
  • Disability Discrimination
  • Constructive Dismissal
  • Statutory Duties under Health and Safety legislation

Most of those claims are not under the jurisdiction of an employment tribunal and as such are not subject to caps on compensation as some tribunal claims are.

Any other reasons for dealing with it?

As well as avoiding all the doom and gloom mentioned above, dealing with stress can have some real positive effects. People feel more motivated and committed to their work, and perform better. Relationships at work are better, as are retention rates and absence rates.

All employers need to recognise that stress is an issue that isn’t going to go away. Many managers have little tolerance for stress in their employees, and there is often a perception that stress is a sign of weakness, or not a “real’ reason for sickness absence. But the simple facts are that stress is costing you money and time and it makes business sense to address it.

If you are currently dealing with stress in your business and need some advice, do get in touch.