The stress factor

The increase in cases of stress in the workplace may, at first glace, seem a dismal subject. However, the increasing problem of workplace stress has fuelled the growth in employee assistance programmes, creating new business opportunities for brokers. But, while stress presents an opportunity to brokers, they themselves run the risk of impact from the phenomenon and should take note of the advice they are offering others.

There have been significant increases in the number of stress-related claims being brought against employers and compensation awards are increasing by 10% annually. It is therefore hardly surprising that employers are now taking the complex issue of stress very seriously and brokers need to do the same, not least because of the Hatton versus Sutherland appeal court rulings of 2001.

Four separate court judgements and awards cases were reviewed. Three of the appeals were upheld while the fourth was not, but only after some in-depth discussion by the judges. Several points of interest were noted and laid down as guidelines for future cases. Among them was that employers are entitled to assume that the employee is up to the normal pressures of the job and that any employer offering a confidential advice service, with referral to appropriate counselling or treatment services, was unlikely to be found in breach of duty.

One in five employees currently cite stress as the single greatest barrier to workplace productivity, according to Investor In People research, while research by the Mental Health Foundation found that stress-related illness costs the UK £4bn annually and businesses need to take urgent action to address this issue. Recent court cases and Health & Safety Executive initiatives have highlighted the requirement to identify the causes of workplace stress and to introduce measures that address these and enhance the well-being of staff.

In the next few months, the government is looking to place responsibility for managing employee well-being squarely at the door of employers. With increasing employment legislation, employers need to address staff welfare more proactively.

Stress audit

It is often a case of 'do as I say, not as I do' when it comes to the issue of stress, but this is something that needs to be addressed. Potentially, the most significant issue for brokers and employers will be if the stress audit is made compulsory by law. If this is put in place, all workers will have to perform a stress test to assess the causes of stress, how they adapt to stress and the best management techniques that an organisation should use to alleviate the situation.

By opening up the subject of stress for discussion, employers will also be opening new channels of communication for staff, which in itself will help an organisation manage stress levels. The tests should be performed annually to monitor the progress of staff from one year to the next and also to assess the effectiveness of any stress management processes put in place.

However, employers will be well aware of the potential problems a compulsory audit could bring. First, there may be issues surrounding the reliability of any information gathered during a stress test. For instance, an individual may be having a bad day, or just had an argument with their manager or a colleague, which could affect their responses.

Auditors would also have the challenge of differentiating stress caused at work from stress caused by outside pressures, which could create many 'grey areas'. It is also likely to be a time-consuming and resource-rich process, putting added pressures on company budgets. The reality is that all employers need to act quickly to ensure their workforce is working safely and effectively.

The biggest problem that any underwriter encounters when providing cover for stress is how exactly to measure it. Very often it is down to the individual - what one person finds stressful, another may find relatively straightforward and undemanding.

Data related to assessing trends in work-related stress is extremely limited. Furthermore, factors such as awareness and knowledge of stress, and social stigma attached to stress or mental illness, can change markedly with time and these may strongly influence the reporting of work stress.

With work ongoing to assess the influence of such factors and the contribution of additional years of data from surveillance schemes, trends in work stress should become clearer in future years.

The Health & Safety Executive's Occupational Stress Statistics Information Sheet, updated in 2003, identifies occupational groups (from 2000 standard occupational classifications) with significantly higher rates of self-reported stress, depression or anxiety. These included teaching professionals, protective service occupations, financial institution and office managers, public service and associate professionals, health associate professionals, in particular, nurses, administrative occupations such as government and related organisations and functional managers.

This is broadly similar to the other self-reported surveys that indicated higher rates of stress among teachers, nurses, groups in the public sector and those within associate professional managerial and technical occupations.

Traditional employee benefits can be combined with occupational health and risk management to provide a more inclusive approach to healthcare in order to reduce stress-related illness, a major cause of sickness absence, and improve productivity.

Around one-third of GP time is now allocated to stress and anxiety-related problems. After minor ailments, stress is now the largest cause of absence; therefore, it is vital that employers take notice. Good health is good for business and, through proper health promotion, risk management and proactive return-to-work programmes, employers can help to reduce staff absence and the costs incurred.

Work environment

Creating a pleasant working environment, which can be achieved by adding plants, increasing natural light and encouraging staff to take regular breaks, will help to reduce stress levels.

Companies can also consider paying for flu vaccinations and provide access to health and welfare services such as counselling, advice on lifestyle, diet, exercise, health and access to physiotherapy to maintain a healthy and productive workforce.

Some staff absence is inevitable but, by developing a proactive approach to promoting employee well-being, employers can reduce the incidence of absence and increase morale and productivity. Increasingly, employers are requesting solutions to these issues through stress assessments, sickness absence management, employee assistance programmes, training and health promotion.

Employers need access to facilities that allow them to assess the legislative and health risks that reduce productivity and provide a range of integrated services covering both prevention and cure. A healthy company is a happy and profitable one, which is why it makes sense for employers to step outside the confines of traditional healthcare and occupational health offerings and take time to invest in a more cohesive system for the well-being of their staff and their business.

Every employer invests significant sums of money and effort in the recruitment, training and maintenance of staff. However, this investment can be rapidly wasted through stress-related sickness absence, low productivity and high staff turnover. An integrated health and welfare programme can very quickly deliver significant returns to the employer via the impact it can have on these issues. It is easy to forget that sickness absence carries far more cost than merely salary. The indirect cost of increased overtime, temporary staff, recruitment and training plus possible lost production can easily double the direct salary cost. Brokers have long been providing advice on handling risks but should now, more than ever if not already, be applying it to their own organisations.

- The boxed information has been researched by: Axa Insurance; Chartered Institute of Personal and Development; Confederation of British Industry; Health & Safety Executive; Investors in People; Sun Life of Canada; Trade Union Congress; and Unum Provident.

TIPS FOR REDUCING WORK-RELATED STRESS

- Review employment procedures and practices.

- Ensure managers are trained to recognise signs of stress in staff.

- Invest in stress management training.

- Check that managers are setting realistic deadlines.

- Create a recognition and reward system to motivate staff.

- Provide access to counsellors for staff suffering from stress.

- Encourage staff to take breaks and reduce excessively long hours.

- Create an open channel of communication between staff and managers.

- Have a clear policy on bullying and harassment in the workplace.

- Invest in good office equipment and furniture to aid staff efficiency.

COUNTING THE COST OF STRESS IN THE WORKPLACE

- On average, 6.8 days per employee were lost as a result of workplace absence during 2002. This equates to 166m working days across the UK workforce.

- An estimated 6.5m sick days are being taken every year as the result of stress.

- Nearly 150,000 workers have taken at least a month off sick due to stress-related illness.

- It is estimated that absence costs employers an average of £522 for each employee per year. This amounts to an estimated total cost of £13bn to the UK economy.

- It is estimated that stress-related sickness absences cost the UK economy £4bn annually.

- The UK's medium-sized businesses, of which there are 71,000, are losing £6.2bn a year to sickness absence, equivalent to 7.2% of their annual salary bill.

- Nearly 90% of employees from the banking, finance and insurance sector reported stress as being the main concern within the workplace; this is 22% higher than the national average.

- It is estimated that absence costs the UK Civil Service £404m per year, the UK Police Force £210m per year and the HM Prison Service £56m per year.

- Stress is the most common cause of long-term absence (of more than four weeks) for non-manual staff. For manual workers, back pain is the primary reason for sickness absence.

- It is estimated that 30 times as many days are lost from ill health as from industrial disputes.

- It is estimated that 1m people are absent from work each week through sickness.

- Of the 3000 people still certified at six months, only 300 will ever work again and 2700 become permanently incapable of work.

- Most common workplace 'stressors' include too much work (62%), deadline pressures (58%), aggressive management and/or poor communications (49%), an unsupportive work environment (43%) and problems with maintaining an acceptable work/life balance (42%).

- Of those who experience stress at work, 14% have sought medical help, but 78% have sought no professional help.

- One in five employees cited stress as the single biggest barrier affecting their productivity.