The Hidden Cost Of Employee Stress: 80% Say It’s Impacting Their Performance

The Real Cost of Workplace Stress

Stress isn’t a problem just for the individual – it has a knock-on effect for your business, too. When left unaddressed, it affects far more than employee wellbeing. It takes a toll on productivity, drives up turnover, and ultimately impacts your entire business.

Decreased Productivity

With such a vast amount of employees saying stress affects their job performance, it means businesses are losing out on potential efficiency and innovation. Employees under pressure make more mistakes, struggle with concentration, and often require longer recovery times from workplace challenges.

When asked ‘Do these workplace stressors ever affect your productivity / performance?’ 79% said that it did.

• 57% said ‘Sometimes’
• 17% said ‘Never’
• 16% said ‘Frequently’
• 6% said ‘All the time’.

What’s more is that 69% said that outside stressors also impacted their performance.

The Hidden Cost of Stress: Lost Hours and Lost Talent

Workplace stress doesn’t just affect how people feel—it directly impacts your bottom line. It contributes to both absenteeism (taking time off due to stress-related health issues) and presenteeism (coming to work but being less productive). Both result in lost working hours and increased operational costs.

Stress is also a key factor in employee turnover. With 53% of employees open to changing jobs in the next 12 months. Many are seeking better pay, career progression, and a healthier work-life balance. If their current role doesn’t deliver, they’ll look elsewhere—often choosing employers who offer a more supportive, less stressful environment.

Tackling Workplace Stress: What Can Employers Do?

Stress is a widespread issue but employees have told us what they need from their employer to help reduce it.

While not every solution may be immediately possible, taking no action at all simply isn’t an option. By listening to your workforce and making meaningful changes—however small—you can create a healthier, more productive workplace where people want to stay. Here’s how you can step up:

Address Excessive Workloads

Our survey found excessive workloads to be the number one cause of workplace stress. While small amounts of stress are a normal part of life, prolonged periods of stress can become a real problem. Around 17 million working days are lost each year due to work-related stress, depression, or anxiety.

With 80% of employees admitting that workplace stress affects their job performance, it’s important to ensure your teams aren’t burning out. Assess team capacities, redistribute tasks effectively, and ensure employees aren’t consistently overburdened. If you prioritise short term output over anything else, you risk losing employee productivity in the long term.

Offer Competitive Pay and Benefits

Since financial concerns are a leading cause of stress, ensuring fair pay is a fundamental step. Plus, better pay and benefits was the top suggestion by employees when asked what their employer could do to minimise their stress.

A solid benefits package is one of the most important ways to build an engaged and positive workforce. Properly-considered rewards reflect your appreciation for employees’ hard work, offering them something meaningful – beyond their payslip.

Additionally, rewards such as enhanced pensions, financial wellness programs, and wellbeing benefits can ease financial insecurity and reduce stress. While it’s not always possible to give big payrises, it’s even more important to get the other rewards right.

Company-paid insurance policies often come with free extra benefits, such as Virtual GP services, counselling, meditation sessions, and Employee Assistance Programmes (EAP).

These services can help your employees and their loved ones with managing their stress levels.

Nadeem Farid
Head of Health & Wellbeing Benefits

Give Frequent Recognition

40% of employees said that lack of recognition made them unhappy at work, and it’s not hard to see why. Giving frequent recognition is a small gesture that makes a big difference in motivating your teams. Recognition strategies can create a positive and motivating work environment, showing employees that their hard work is noticed and valued.

Don’t just take our word for it. When asked what employers could do to reduce stress, greater recognition of efforts ranked second overall. It’s clear that employees aren’t just hoping to be appreciated—they’re actively asking for it. Some easy-to-implement ideas include:

• Public acknowledgement
  Recognise employees during team meetings, company-wide emails, or on internal communication platforms (like My.Drewberry’s Praise 🙌). Publicly celebrating their achievements shows appreciation and boosts morale
• Spot bonuses or gifts
  Offer spot bonuses, gift cards, or small tokens of appreciation for exceptional work. This immediate recognition can be a powerful incentive
• Professional development opportunities
  Reward employees with opportunities for growth, such as funding for courses, conferences, or certifications. This not only recognises their efforts but also invests in their future within your organisation.

Promote Work-Life Balance

The data shows that employees value flexibility, with demand for a four-day workweek and hybrid working arrangements remaining high. 68% also said that good work-life balance makes them happiest, so allowing employees to have more control over their schedules can significantly reduce workplace stress by promoting a healthy work-life balance.

Improve Workplace Culture and Support

Poor company culture and lack of recognition are significant factors when it comes to employee stress. The value of a positive work environment can’t be overestimated. Did you know that happy employees are 13% more productive than their unhappy counterparts? It pays to invest in your culture and workplace happiness.

What makes your team tick? What engages them? Are they excited about upcoming projects? Or are they indifferent to your business success? A company with a positive workplace culture can harness that energy, helping to boost productivity and improve employee satisfaction.

Strive for an environment where employees feel valued, supported, and heard. Regular check-ins, transparent communication, and employee recognition programs can go a long way in reducing stress levels.

Read more about creating a positive working environment.

Nick Nelms
Senior Consultant, Employee Benefits

Enhance Mental Health Support

Despite one in four people experiencing mental health difficulties each year in England, there are barriers to receiving sufficient mental health support; people either face long NHS waiting lists or the high price of private healthcare. As their employer, you can help bridge this gap and ensure your employees get the help they need for a healthy mind.

Encouraging open discussions around mental health, providing Employee Assistance Programmes (EAPs), and offering mental health days can create a supportive atmosphere where employees feel comfortable seeking help

Often, Group Insurance policies (such as Private Health Insurance) offer members a variety of mental health resources they can use when they’re not making a claim (e.g. counselling sessions with a registered healthcare professional). These are designed to tackle issues before they become a bigger problem, leading to happier, more engaged employees. See the top free services that come with employee benefits.

Provide Ongoing Support

Lack of support was shown to be the second biggest cause of employee stress in the workplace. As an employer, support can take a number of different forms. For instance, having an easy-access portal to host employees’ entire suite of benefits can make tackling stress much easier.

67% of employees either didn’t know about or didn’t use the additional (and often free) wellbeing benefits that come with core benefits (such as Group Life Cover and Group Health Insurance). Services such as mental health helplines, Employee Assistance Programmes, and Virtual GPs are all designed to support employee wellbeing, without needing to make a claim. If you invest in these core benefits, don’t let their true value get lost at the bottom of inboxes – use your employee benefits platform to make your rewards easily accessible.

Reducing Stress With The Right Benefits

Workplace stress isn’t just an employee problem – it can become a real issue for your business if left unaddressed. High stress levels lead to decreased productivity, increased absenteeism, and higher turnover.

When you weigh up the cost of replacing staff vs investing in strategic benefits, the value of benefits that keep staff happy can’t be understated.

Need help reviewing your employee benefits and workplace wellness strategies? Call 02074425880 or email help@drewberry.co.uk to explore how we can help create a healthier, more productive workforce.

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