What is the impact of stress on organisations?

Author avatarLiz Makin ยทMay 30, 2023

When you think about stress it is usually in terms of the impact on the person who is stressed. However, there are much wider implications of a person's stress in terms of the impact on their life, work and the organisation they work for. If several employees are stressed, the impact on the organisation will escalate. So what potential impacts are there of stress on an organisation and what action can an organisation take?


Stress can impact an organisation in many ways including:

Absenteeism, presenteeism and ill health. Employees who are stressed may be absent from work due to stress, they may come to work but under perform and they may suffer from other health problems because of the stress. These factors will significantly impact the organisation due to lack of resources, the loss of knowledge and experience and the impact on other employees. There may also be health and safety incidents, because of stress.

Morale and motivation. The above will in turn impact on employee morale and motivation, both in terms of the employees who are struggling with stress and the employees who pick up their work and cover for them. 

Staff turnover, recruitment and training.  This will likely also result in an increase in staff turnover and experienced employees leaving the organisation. There will then be a need to recruit new employees, with the associated time and costs of recruitment and training.

Productivity and efficiency. Employees who are stressed and coming into work are likely to be less productive and effective than usual and this combined with the impacts already covered will have a negative impact on overall organisation productivity and efficiency.

Customer service. It is very difficult to maintain customer service levels with the above. Stress can therefore result in customer service issues and problems, with customer complaints and potential loss of customers. 

Communication and relationships. Another impact can be on communication and relationships in the organisation. People who are stressed can be angry, irritable and withdrawn, which together with the above, can impact team dynamics, communication within and outside the company and internal and external relationships negatively. 

Organisation and financial performance. All the above will result in a deterioration in the organisation performance.


What can an organisation do to prevent or minimise the above impacts? Here are some ideas:

 Understand the data. A good starting point for any organisation is to evaluate the level of stress of its employees by gathering data such as the level of absence, long term illness, staff turnover, calls to Human Resources or Employee Assistance Programs and health and safety incidents because of stress and softer data such as employee feedback, management experience, customer feedback etc. This can be done through surveys, group and team meetings and one to one meetings. You may also want to seek external help with this analysis.

Risk assess the organisation. Alongside the above it is a good idea to risk assess the organisation to understand the current situation in all areas (both what may be creating stress for employees and the impact of stress on the organisation). 

Areas to consider include:

-The working environment, such as the physical surroundings, equipment provided, and heating and lighting.

-The culture of the organisation, such as support for staff, values and beliefs and management practices. 

- How employees are treated, such as clarity of job and role descriptions and objectives, communication on a team and one to one basis, training, expectations around working hours and deadlines and career opportunities. 

- Resourcing, such as employing the right number of people to meet the organisation's requirements and having the equipment to do the job properly. 

- Scheduling and planning, such as poor project planning or management chopping and changing their requirements of their employees. 

You will need to personalise any risk assessment to your organisation and may want to seek outside help to complete it. 

Support individuals with stress management. As an employer you can support your employees to prevent and manage stress. This may be through open conversations with line managers, providing Employee Assistance stress support services, stress management training and listening to employees concerns and taking action to improve things for them.

Make organisational changes to prevent and reduce stress. The risk assessment will highlight areas that need to be improved or changed in the organisation, to reduce or prevent employee stress. This could be anything from changing the culture of the organisation to recruiting additional staff. 

Hopefully the above has got you thinking of the potential impact of stress on your organisation and what you can do about it.


How to find out more?

We have a range of online stress management courses on Learn Formula and CPD Formula, that cover stress management for individuals and supporting others with stress at work which you may like to consider. 

Image subscription

Never miss a post.

We'll keep you in the loop with everything good going on in the modern professional development world.

By submitting this newsletter request, I consent to LearnFormula sending me marketing communication via email. I may opt out at any time. View LearnFormula's privacy policy