Broken piggy bank with euro coins on the shelf.

    Workplace stress is costing British companies a fortune

    11 July 2017

    Workplace stress and poor working mental health is costing British companies a fortune. Stuttering productivity, extended absence and falling staff retention rates are all symptoms of a spreading problem. Solutions, obvious or otherwise, are being sought in unusual corners. But what works?

    The scale of the problem is vast. In recent years, time taken off work relating to poor mental health has soared, as have estimates of cost. A 2014 report suggested it cost 4.5 per cent of Britain’s GDP, thanks to suppressed productivity and the burden of extra benefits and healthcare.

    It even has an effect on investments in early stage companies. Chris Wade, partner of Isomer capital, puts it this way: ‘The only thing VCs (venture capitalists) invest in is people at the early stage. The health of a start-up team is fundamental.’

    David Plans, CEO of BioBeats, a company that seeks to reduce employee stress, agrees: ‘When you look at the costings coming out of insurers, stress is number one. It costs untold amounts of money. It is higher than any other category, whether diabetes, cardiovascular or musculoskeletal issues.’

    To make matters worse, the methodology behind such calculations is questioned. Plans highlights issues in detection and underestimation. ‘Because the stigma is so high, this issue goes unchecked.’

    Lost productivity is usually assessed as the number of days taken off work, but that doesn’t account for the problem of ‘presenteeism’, according to Adam Chekroud, co-founder of Spring Care. ‘You can have employees physically at work but operating at 20 per cent efficiency,’ he says.

    Research from 2015 put the cost of presenteeism at double that of unjustified time off.

    Whatever the final figure, there is little debate that the cost is huge and from the desk we work on, to the way we talk to each other, policymakers and employers alike are scrambling for solutions.

    The easiest first step for many employers is physical: where do staff work and how is it affecting them? Many of the past decade’s beliefs are being challenged. A 2011 study, for example, found that open-plan offices can cause a 15 per cent drop in productivity. As a result, there has been a shift in recent years to a more hybrid model of workplace design combining both open plan and secluded areas.

    ‘We have an open-plan office which creates opportunities to interact but we have quiet areas too,’ says Rachel Lloyd, people and environment manager at money transfer company TransferWise. The company has invested in improving their offices to work to the needs of staff. ‘You’ve got to speak to them and understand what they actually want,’ says Lloyd. ‘Of course you have to use your judgement too. Someone wanted a fireman’s pole and I thought: ‘Will this add value?’ You have to avoid gimmicks.’

    And what about cost? ‘Creativity isn’t expensive,’ says Lloyd. ‘It doesn’t cost anything for the team to name meeting rooms or to put up photos of days out.’

    Some companies have made moves to implement specific policies to tackle poor mental health. ‘We’ve got a very comprehensive mental health policy,’ says Jess Hayes, an HR Manager at Lost My Name, a company making customised children’s books.

    The company doubles the amount of time staff can take off work for illness, allowing 25 days for mental health. Usage varies across the office. ‘Some people will take a couple days of a quarter, others will take two weeks off if they go through a traumatic event.’

    Jess says she is determined that the company ‘won’t be one of those start-ups linked to burnout’, the dreaded overextension and exhaustion experienced by many in rapidly growing companies.

    Lost My Name goes further, providing access to confidential coaching through a venture called Sanctus. This serves as a space for workers to open up about what is on their mind at work, one step removed from their line manager or the prying eyes of human resources.

    Sanctus co-founder James Routledge calls for conversations around mental health to change. “We should talk about it the way we talk about physical health. You have good days and you have bad days.” He believes the current government approach of putting money into the acute end of mental health, where people are rapidly deteriorating is ill-advised. ‘It cannot make financial sense. We should work on prevention.’

    One stigma that rivals discussion of mental health is personal finance. You are about as likely to see someone’s bank statements as their medical records but a growing number of industry leaders believe financial planning, assistance and intervention could break bad habits and build better mental health.

    The Money and Mental Health Policy Institute finds that people with mental health problems are three times more likely to enter debt, a downward-spiralling relationship of anxiety and poor financial planning. Zero-hour contracts, gig-economy working patterns and long-term wage suppression have made the propensity for financial hardship substantially greater in recent years.

    Benedetta Arese Lucini, founder of Oval Money, first noticed this new financial frontier working as Italian country manager at Uber. The company’s drivers, who had no formal working hours, required different tools for financial management. Her new company provides workers with a means to normalise their wages over a period of time, providing access to better value banking products. ‘We don’t teach financial literacy in schools,’ she says.

    As a topic, mental health is a Pandora’s box, requiring emotional intelligence from employers, difficult disclosures from employees, and often the confrontation of unspoken stigma. It initiates a conversation that many are not fully happy to have, since it probes so deeply.

    ‘Being honest is the starting point,’ says Ben Gately, COO of Charlie HR. He speaks about radical candour, a kind of corporate honesty that runs through some companies where almost no criticism is off limits. ‘If there is an issue in my role, I want to know now. I don’t want to know at the end of the month, or at an appraisal halfway through the year.’

    But where is the line between candour and being a horrible person? ‘It comes from a place of love and caring.’ says Ben. Indeed, the mindset at Charlie HR is, in many ways, different from many companies. ‘We say stop looking at people as an asset, start looking at them as a responsibility.’

    The result of such an approach, when successful, can bring teams closer together, removing unspoken barriers between colleagues, employers and employees. Honesty around work could open up the door for honesty around personal lives, resulting in a more constructive assistance from employers.

    Recouping 4.5 per cent of lost GDP is never going to be an easy task: not for workers, not for employers, not for legislators. To limit the loss, keeping calm and carrying on needs jettisoning for a pragmatic, honest and difficult discussion about how to help the millions of people working with poor work mental health. Outside tools, a radical shift in the role of HR and greater education can all play a part, but it’s going to be a long slog.