Role of Workplace Stress in Turnover Undervalued

Staff Report

16 November 2007

Whether it’s Boise or Beijing, employers worldwide underestimate the role that stress plays in a worker’s decision to leave a job, according to the 2007/2008 Global Strategic Rewards report from Watson Wyatt and WorldatWork.

“There is a clear disconnect in the way companies and their employees perceive stress,” says Laura Sejen, global director of strategic rewards for Watson Wyatt in New York.

The survey, released in late October, surveyed 13,000 employees of 946 midsize to large companies. Those organizations employ 15 million workers across 22 countries.

Almost 40 percent of employees participating in the study cited stress as the primary reason for resigning from a job. Workers surveyed in the U.S., Canada, Europe and the Asia-Pacific region ranked stress as the top reason for leaving a company, while in Latin America, stress was second.

But on the employer side of the survey, 52 percent said dissatisfaction with base pay was the No. 1 reason employees walk out. They ranked stress fifth.

Employers perceived other factors—such as discontent with promotional opportunities or lack of career development initiatives—as the more likely culprits behind employee resignations, the survey said.

Such dynamics do play a role in why workers leave their jobs, so companies are not completely out of tune with the needs of employees. But that fact that stress was ranked so low on the employers’ list of reasons for resignations is a sign of trouble, Sejen says.

“This should be a wake-up call to employers,” she says, “particularly for those who are having a difficult time retaining workers.”

Sejen says many employers must update their approach to talent management. Base salary is important, but overemphasizing monetary rewards while minimizing such issues as job security and work/life balance could put companies in a bind.

Already, 65 percent of employers in the survey report difficulties holding on to workers. What’s more, 70 percent say recruiting qualified talent is a constant battle. Nowhere are the challenges greater than among companies in need of highly skilled employees, the study indicates.

Sejen says companies that want to reduce workplace stress should take a critical look at their organizational structure, staffing levels and job design to determine whether they are appropriate.

“Having overwhelmed employees can backfire on companies,” she says.

Gina Ruiz

Written by Staff Report


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