Calculating the cost of workplace stress

Workplace stress is a major threat to both the wellbeing of your workforce and the productivity of your businesses and negatively impacts the bottom line in three significant areas: sickness absence, presenteeism and staff turnover.

The associated costs are often overlooked by organisations and rarely quantified, perhaps because they look so huge. However, calculating the financial effect of poor stress management is the first step to understanding the commercial impact of making improvements.

BIOStress relax

Please complete the following form to see what stress is costing your business:

Number of employees:

Your sickness absence rate % (if unknown please enter the current UK average of 2.2%*):

Please enter your staff turnover rate (if unknown please enter the current UK average of 9.5%**):

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How the costs are calculated

The workplace stress calculator has been built using robust data from several economists and academic studies:

Sickness absence

  • Data from ‘Costing sickness absence in the UK’ – Institute for Employment Studies (IES) Report 382. S. Bevan & S. Hayday (2001)
  • Research data from almost 40,000 employees across nine separate companies in different sectors
  • Calculated the cost of sickness absence based on gross employment costs, absence management and alternative cover.
  • Average cost per employee per year (based on FTE over £25k annual salary) = £1,074
  • 2.2% is the current average sickness absence rate in the UK (the highest since 2010) according to the latest figures from the ONS – Sickness absence in the UK Labour market 2021
  • Costs calculated based on 50% of sickness absence being attributed to work-related stress, anxiety and depresssion (HSE, 2021)

Presenteeism

  • Defined as employees attending work when they are suffering from ill-health
  • Data from ‘Sickness presenteeism: measurement and management challenges’ – Ergonomics 61:3, pp 341-354. Z. Whysall, j. Bowden & M. Hewitt (2018)
  • Research data from 361 employees from major UK utilities company across range of different business areas
  • 13.09 days of self-reported presenteeism (i.e. ‘How many days have you worked despite feeling unwell?’)
  • Employees self-reported operating at 84% of full capacity
  • Mean lost productivity cost (16% of each respondent’s own salary band mid-point) estimated at £4,059 per annum
  • Costs calculated based on 21% of presenteeism being attributed to ‘mental health issues’ by participants in the research

Staff turnover

  • Data from ‘The cost of the brain drain: understanding the financial impact of staff turnover’ – Oxford Economics. T. Rogers & M. Sadier (2014)
  • Employees earning over £25k pa in: Retail, IT & Technology, Legal, Accounting, Media & Advertising
  • 521 organisations surveyed with data from employees earning over £25k pa in: Retail, IT & Technology, Legal, Accounting, Media & Advertising
  • Combines two costs: a) new employee operating at below optimum capacity, and b) logistical costs associated with the recruitment process for replacement (advertising, recruitment agency fees, internal HR processes related to new employee)
  • Average cost per employee estimate at £31,364
  • Costs calculated based on 65% of voluntary staff turnover being attributed to poor mental health (Mental Health and Employers. The case for investment – pandemic and beyond.’ Deloitte UK, 2022)

For more information about the calculator and our workplace stress BIO programme please get in touch using the form below:

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