Even a quick look at what's happening in the American workplace shows that it's a seriously split-screen world. On the one hand, there's the stressful world of quarterly earnings reports, beating growth expectations, hard-charging CEOs, and focusing on the bottom line -- the world that is the usual focus of CNBC and Squawk Box. On the other hand, there's the world populated by the growing awareness of the costs of stress, not just in the health and well-being of business leaders and employees, but on the bottom line as well.
There is a growing body of scientific evidence that shows that these two worlds are, in fact, very much aligned -- or at least that they can, and should, be. And that when we treat them as separate, there is a heavy price to pay -- both for individuals and companies. The former in terms of health and happiness, and the latter in terms of dollars and cents. So yes, I do want to talk about maximizing profits and beating expectations -- by emphasizing the notion that what's good for us as individuals is also good for corporate America's bottom line. To do that, I'll be featuring guests who have had great success at bringing these two worlds together and putting what at first might seem like abstract or esoteric concepts to very productive use in the workplace.
When we separate these two worlds, the costs come in two forms. First, there are the direct costs due to stress and its associated medical conditions, and, second, there's the cost of lost creativity and diminished performance and productivity.
According to the World Health Organization, the cost of stress to American businesses is as high as $300 billion. And unless we change course, this will only get worse. Over the last 30 years, self-reported levels ofstress have increased 18 percent for women and 25 percent for men.
This has huge consequences, of course, because of the role stress plays in a wide array of illnesses. Like high blood pressure, which afflicts nearly 70 million, and which costs $130 billion a year to treat. Or diabetes, which 25 million Americans have.
The CDC estimates that 75 percent of all health care spending is on chronic illnesses like these that can be prevented. According to the American Academy of Family Physicians, two-thirds of visits to the doctor's office are for stress-related conditions. As a panelist on health care at the World Economic Forum put it this year, what we have right now isn't health care but "sickcare." And sickcare is a lot more expensive than real health care. Especially for businesses.
As business professors Michael Porter, Elizabeth Teisberg, and Scott Wallace wrote in the HBS Working Knowledge, studies show that U.S. employers spend 200 to 300 percent more for the indirect costs of health care -- in the form of absenteeism, sick days, and lower productivity -- than they do on actual health care payments. Their recommendation: that companies "mount an aggressive approach to wellness, prevention, screening and active management of chronic conditions."
Though awareness is growing, there are still too many companies that don't yet realize the benefits of a focus on wellness. "The lack of attention to employee needs helps explain why the United States spends more on health care than other countries but gets worse outcomes," wrote Jeffrey Pfeffer, professor at Stanford's Graduate School of Business. "We have no mandatory vacation or sick day requirements, and we do have chronic layoffs, overwork, and stress. Working in many organizations is simply hazardous to your health." And thus to the health of your company as well. "I hope businesses will wake up to the fact that if they don't do well by their employees, chances are they're not doing well, period," Pfeffer said.