The Hidden Cost of Employee Stress—and How to Reduce It


Employee stress is costing us trillions of dollars.

Widespread mental health challenges and low engagement result in a slew of negative consequences for individuals and the companies they work for: burnout, absenteeism, lower job performance, higher healthcare costs, higher turnover rates…

Most workers simply aren’t doing well: 59% feel stressed, and 44% feel stressed for a large portion of their day. And these numbers are only increasing—daily feelings of stress, worry, anger, and sadness remain above pre-pandemic levels.

So just how much is employee stress costing us? And how can we reduce stress so employees and businesses can thrive? Here’s a quick look at the numbers and some proven stress-reducing solutions for employees.


The Financial Toll of Employee Stress

We often toss around phrases like “I’m so stressed” during a harried workday but the financial impact of employee stress is much greater than we realize: It’s expensive for individuals, their families, their workplaces, and the economy at large.

Just how expensive is it? Let’s take a look.

Mental Health Challenges Cost $1 Trillion Each Year

Employee mental health is at an all-time low: 84% of workers reported at least one mental health challenge in the past year, and 37% cited work as “a top factor affecting their mental health.”

The World Health Organization notes that elements of poor working environments, such as excessive workloads or low job control, often pose a risk to mental health. And when mental health deteriorates, so does productivity.

The price tag of poor mental health is a $1 trillion loss of global productivity each year due to depression and anxiety.

Low Engagement Costs $7.8 Trillion Each Year

Gallup estimates that employee engagement accounts for 11% of global GDP. That’s a lot of money riding on employees being present and enthusiastic—yet nearly 85% of employees worldwide are still not fully engaged at work.

So what happens when engagement dips? Absenteeism, accidents, quality defects, shrinkage, and turnover all rise, which leads to the heftiest hit to financial performance we found in our research: $7.8 trillion.

Turnover Costs $1 Trillion Each Year

It’s expensive to lose an employee. In addition to the knowledge gap often left in their wake, there’s the time and money spent on recruiting, interviewing, and training—not to mention the work that may be left undone while a replacement is found.

So just how much is turnover costing? A whopping $1 trillion in the US alone.

Here’s a little rundown of the numbers by Gallup:

  • The estimated cost of replacing an individual employee: 1.5-2x their annual salary.
  • Overall turnover rate, according to the US Bureau of Labor Statistics, is 26.3%.
  • Applying these numbers to a 100-person company with an average annual salary of $50,000 = estimated losses of $660,000 to $2.6 million each year.

Note that these numbers would be much higher if we included the historical anomaly of The Great Resignation, which netted as high as 57% turnover (see graph below).


Employee Well-Being: The Currency That’s Still Being Overlooked

There’s an additional toll of employee stress—it’s harder to quantify, but it’s even more important than the bottom line. What are we talking about? Employee well-being.

Employees with low well-being often feel disengaged or isolated, feel guilty about taking breaks and worry incessantly. These signs of stress are more subtle and can be much harder to spot because they’re not easily measured. And this challenge is compounded by the fact that we’re all still navigating how to succeed with the relatively new routine of remote and hybrid work environments.


Reducing Employee Stress With Wellness Programs

Now that we know just how stressed employees are and just how draining it is on all of us, what can we do to reduce employee stress and give businesses a boost?

Well, for starters, we can introduce wellness programs.

Wellness is the science-backed way to start reducing employee stress on many fronts. Check out these recent findings:

(Wondering how these organizations are proving ROI? Check out our guide to proving the ROI of a wellness program so you can get the buy-in and budget you need.)


Wellness Programs Proven to Reduce Employee Stress

1. Employee Assistance Programs (EAPs)

An EAP gives employees access to mental health experts via online, telehealth, or face-to-face sessions. EAPs have been increasing in popularity in the US as a common benefit offered alongside traditional medical coverage.

And an EAP is well worth the investment: A 2020 WOS study found that the ROI on an EAP averaged  3:1 for small-sized employers, 5:1 for medium-sized employers, and 9:1 for larger employers. Most of the cost savings resulted from improvements in absenteeism and presenteeism, yielding $2,000-3,500 saved per case.

2. Wellness Breaks

Breaks are proven to boost physical and emotional health, restore motivation, and lessen procrastination—all things that can reduce employee stress. Even short 5-7 minute breaks have been shown to yield positive benefits.

And breaks may be simple, but they’re powerful. A Draugiem Group study found that the highest-performing employees took the most breaks. This is because the brain and body aren’t wired to work at a high level for extended periods of time—we all need regular breaks to refresh the mind, restore motivation, and stay physically healthy.

Stop the Stress (and the Financial Drain) by Starting a Wellness Program Now

If you’re tired of employee stress taking a toll on your organization, it’s time to introduce a wellness program like Bright Breaks, which offers regular employee wellness breaks through short, virtual classes.

Remember, doing nothing is much more costly than a wellness program.

P.S. Want to learn more about Bright Breaks? Get in touch with our team for expert advice on how you can introduce breaks within your organization to start reducing employee stress.

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What you should do now

  1. Promote best practices for remote worker health with free copy/paste, pre-written scripts you can post every week in your internal communications channels.

  2. Learn from top HR & People Leaders about the latest strategies to keep your remote workforce happy, healthy, and connected on The Virtual Vibe Podcast.

  3. Contact our sales team to discover the benefits of our built-for-the-workplace wellness solution, compared to B2C offerings like Calm or Headspace.
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