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Liberate your employees or pay the price for workplace stress

Posted on by from ESCP Europe

Men perceiving little control over their jobs are 50% more likely to develop heart disease than those who feel as if they are in control. For women, the risk is 100% higher. As a leader, how can you encourage responsibility and freedom in work?

Three British psychologists, Hans Bosma, Steven Stansfeld and Michael Marmot, spent five years studying the stress levels of more than 10,000 British civil servants.

Their findings showed that men perceiving little control over their jobs are 50% more likely to develop heart disease than those feel as if they are in control. For women, it’s worse - the risk is 100% higher. 

The root cause of all this suffering is a universal human need for responsibility and freedom in work. In bureaucratic organisations only people with control - managers - can potentially escape from procedures; most of employees who are at the bottom of the hierarchy have their need for control over their tasks denied.

You may think that employees who develop a heart disease cost little to the company, the brunt being borne by the NHS; however heart disease is the last ring in a chain of physiological consequences of work stress and this is very, very costly.

Leaders - you need to take this seriously.

The cost of stress to your business

Lack of control over tasks and other stressors trigger employee anger or anxiety, followed by their actions. Sometimes, those actions can be constructive, like seeking a tool to cope with the situation, however often they are destructive: flight or fight.

Fleeing work is otherwise called absenteeism and turnover - in the early 2000s, absenteeism affected 10,000 of the Royal Mail’s 170,000 staff, costing around half a billion pounds annually. 

Fighting tough leads to even greater costs; increased adrenaline, blood pressure, and heart-rate. Helpful throughout human history to fight wolves and bears, these companions aren’t useful in fighting the boss. Instead they lead to stomach disorders, back pain, musculoskeletal problems, headaches, skin problems, loss of sleep and energy, and emotional distress.

Cost? These work place stressors are recognised today as a key contributor in 75% to 90% of all GP visits. No wonder that the U.S. Bureau of Labor Statistics estimates the annual cost of stress at $7.680 per employee.

The bottom line of the costs due to the stress-induced absenteeism, lost productivity and health expenditures have been estimated by two separate studies for U.S. businesses at between $150 billion and $300 billion per year. The costs are proportionally comparable for UK businesses. 

All these costs are hidden. For example, absenteeism requires replacement and shows up at the costs of temporary employees; turnover may show up in the headhunting fees.

Studies estimate that replacing an employee costs from 6 to 24 months of salary before she becomes productive, so every new hire is a burden on her colleagues and managers for months before she learns the ropes.

Some stressed-out employees look for any slight ailment to see the doctor and stay at home, however many, though ill, come to work. Presenteeism extols even a bigger cost than absenteeism. Employees come to work but they are 50% productive, prone to mistakes and chronically tired. 

There are also costs related to lost opportunities. Think of customers who don’t have their needs followed up by stressed-out employees because they simply don’t care. 

Give people real control

Companies can’t hold these behaviours against stressed out employees, but they can hold it against themselves. Senior managers and HR directors – it's your job to start acting to eliminate work stress. Mindfulness, meditation and other programmes are helpful but they do not treat the work-stress root cause: lack of control. 

There is an alternative, far more dramatic way the hidden stress-related costs can be eliminated—and for good, which leaders need to take heed of.

Give people real (even perceived) control over their work. Stop telling them how to do their work and the stress will go down. Absenteeism will go down, hidden costs will go down. The engagement will go up. 

All this, of course, is hard to accomplish in command-and-control companies. To eradicate work stress and create an engaged workforce, the traditional model invented in British Midlands during the Industrial Revolution needs to be radically transformed. 

Introduce corporate liberation

One way leaders are already achieving this is through corporate liberation.

A liberated company is one in which employees are free and responsible to take actions that they - not their bosses, not procedure - decide are the best for the company.

The two key ingredients of performance - employee initiative and potential - which are stifled in a traditional command-and-control company, are freed up in liberated companies. 

Hundreds of companies and administrations across Europe including such giants as Michelin, Airbus, Decathlon, two ministries, municipalities, social security have entered corporate liberation today providing a working environment where their employees are willing to come every morning and do their best.

As one operator put it: “If they double my salary I will not go to work into command-and-control company”. Instead of stress, employees find fulfillment. 

Since they are willing to get up in the morning and go to work to give their best, their company is outperforming its old-style competition.

Fulfilled employees are not only costing less, they are the key to outstanding performance. Put differently, freeing a company’s people to act not only eliminates the burden of hidden stress related cost - it also dramatically boosts its innovation and organic growth.

Isaac Getz

By Isaac Getz

Isaac is a professor at the top-ranked ESCP Europe Business School (Paris, London, Berlin, Madrid, Torino, Warsaw). He was also visiting professor at Cornell and Stanford Universities and at the University of Massachusetts.

ESCP Europe

ESCP Europe

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