The Economic Cost of Stress

Stress in the workplace is causing Australian employees and employers great concern. It has resulted in an upsurge of absenteeism and presenteeism which ultimately affected productivity and imposed a direct economic cost to employers. The Stress and Wellbeing Survey in Australia 2013 revealed that Australians had considerably lower levels of wellbeing and notably higher levels of distress and stress, and anxiety and depressive symptoms compared to last year. Interestingly, the survey revealed that older Australians, those that are 66 to 75 years old, have a higher level of well-being compared to their younger counterparts, most especially those in the 18-25 age group.
In a Financial Review article mental health speaker and author Graeme Cowan was also quoted as saying “I have never seen stress levels higher among Australian employees.”

According to Safe Work Australia media release for 2013 the price tag of mental stress  to Australian businesses is over $10 billion annually. This is upheld by a 2008 Medibank report which indicated that the cost of stress-related presenteeism and absenteeism to the Australian economy is $14.81 billion annually while costing employers $10.11 billion per year. On the other hand, Comcare, Australia’s workplace compensation insurer, reported that the average claim arising from mental stress is $250,000. Mental stress accounts for 33% of Comcare’s nationwide payouts.

What is stress?

Let’s look at how experts define stress. A definition of stress from MNT is “anything that poses a challenge or a threat to our well-being is a stress.”  Meanwhile, workplace stress is defined in a Medibank report on “The Cost of Workplace Stress in Australia 2008” as:

“Workplace stress is the response people may experience when presented with work demands and pressures that are not matched to their knowledge and abilities and which challenge their ability to cope. It has been described as an emotional experience associated with nervousness, tension and strain, brought about by factors related to work.”

In truth, stress is our reaction when we are under pressure. Not all stresses are bad for us. The good type of stress is one that eggs us on. Without it, life can be drab and meaningless. Bad stress, the one that is causing a lot of problem, is the type which debilitates us both physically and mentally.

Stress occurs when we have a feeling that we can’t handle the pressure we are confronted with and this pressure generates physiological reactions. These reactions are characterized as the fight or flight response, the inherent reaction to perceived danger. This fight or flight response was initially developed by Walter Cannon, one of the early proponents of stress research.

How do Australians manage stress?

Most people have formed some coping mechanism to stress. But when stress becomes too much and stayed on for too long, then that’s the time when the physical and mental health of a person becomes affected. According to a survey conducted by the Australian Psychology Society, Australians resort to help-seeking behavior to manage stress. Usually they seek the help of family, friends and general practitioners. The survey also revealed that approximately one out of five Australians seeks the help of psychologists or other mental health practitioners on stress management.