Managing the impact of recession on employees' health and wellbeing

As the pressure of the recession on employees increases, we look at how health promotion and wellbeing measures can prevent stress at work from escalating.

On this page:
The recession hits home
Economic downturn puts workforce under pressure
The recession and sickness absence
Direct and indirect pressures on work stress
Employers' stress management programmes
Health promotion and encouraging wellness
Targeting support where it is needed
Line managers play a key role
Case study: IPC Media stands prepared
Additional resources on XpertHR.

Key points

  • A recession can have a damaging effect on employees' morale and health because of concerns about their own and their families' jobs and financial security, and the impact of greater workloads.
  • If employees do experience higher levels of stress, there is a risk that this could worsen an existing mental health condition, leading to an increase in common mental health problems among the workforce.
  • There are a number of ways in which employers can support their workforces during a recession, including publicising the services of employee assistance programmes and the availability of flexible working, offering access to occupational health, and providing stress management programmes and health promotion activities.
  • Good management has never been more important than during economic difficulties, and line managers can play a key role in identifying the early signs of stress and in helping their teams cope with change at work and rising workloads.

With the world now in the grip of a "great recession", according to the head of the International Monetary Fund (IMF) (external website), concerns that the UK's present economic difficulties will be on a different scale to those of the 1980s and 1990s seem to have some basis in fact.

A report by health insurer HSA (PDF format, 403K) (external website) at the end of 2008 cautioned that "organisations and individuals need to pay particular attention to the health of the UK at this time" if the country is to maintain a productive workforce and ensure the continued wellbeing, health and happiness of the nation.

Its conclusion merits consideration, being based on feedback from a nationally representative panel of 1,264 working adults and 271 HR professionals.

As Lesley Cooper, managing director and founder of WorkingWell (external website), a specialist health management consultancy, comments: "At its simplest level, the need for high performance has never been greater - given the difficulties that many organisations are facing - and yet achieving enhanced performance and productivity levels has never been more challenging. It is now no longer possible to throw more resources at a problem given the budgetary pressures on employers."

The recession hits home

The recession is already affecting large sections of the labour market. Fears about redundancy, finances and house repossession are now much closer to home for many people, even for those not directly affected by redundancy.

Understandably, actually being made redundant can have the greatest impact on a person's economic situation and mental health. In recognition of this, in early March 2009 the Government unveiled a package of measures (external website) offering unemployed people who are experiencing depression or anxiety help with getting back to work. The new measures include talking therapy services, debt advice and family counselling.

Economic downturn puts workforce under pressure

While the continuing tide of redundancies is attracting the greatest press coverage, organisations and their workforces are feeling the impact of the recession in a number of other potentially negative ways. Falling demand for goods and services, budgetary squeezes and a general climate of uncertainty can all have a damaging effect on staff morale and mental wellbeing.

There is a rapidly increasing body of evidence to back up these concerns. An IRS survey examining 266 employers' experience of redundancy shows that six in 10 (59%) organisations report a consequential decline in morale among employee "survivors" following a redundancy programme.

Research published in January 2009 (external website) by education and research institute Roffey Park found that the key concern for managers and employees is feeling under pressure at work. Six out of 10 (59%) of those surveyed reported that work pressure had increased as a result of the current economic situation.

"There is a definite impact on individuals and their stress levels in the workplace due to recession-related fears, such as job cuts, increased workloads and what it means for them," says Eamonn Swanton, managing director of Heales Medical (external website), a provider of occupational health services. "Stress programmes can teach people to deal with the symptoms of stress, but it is important that organisations tackle the causes and not just the effects, particularly at this time."

The recession and sickness absence

The HSA report, cited above, draws attention to changes in people's working habits that suggest they are coming under increasing pressure in their lives, with implications for their health and wellbeing.

For instance, a quarter of employees surveyed by HSA said that they have worked during an illness, having avoided taking time off at any cost. More than three-quarters of HR professionals surveyed confirmed that, as a result of job-security worries, employees will be less likely to take time off work when they are ill.

While some people may feel increased pressure to show their loyalty to the organisation and go into work even when they are sick, in the current economic climate this is likely to be counter-balanced by an increase in sickness absence on the part of employees who are suffering from stress and anxiety. Given the high cost of sickness absence to any organisation, there is an economic argument in favour of proactively managing the potential impact of the recession on employees' wellbeing at work, particularly in relation to stress.

"During a recession is often the time that some employers turn their minds to managing sickness absence more effectively because their eye is on the bottom line and there could be savings to be made. Some occupational health providers receive more referrals during a downturn," says Geoff Davies, chair of COHPA (external website) - the Commercial Occupational Health Providers Association.

"By the time an employee is off sick, stress and other issues are already a significant problem," Swanton says. "We have developed a ‘health and life' product that offers a range of resources, such as coaching, counselling and lifestyle advice, as a one-stop-shop to promote health and wellbeing and help prevent higher levels of stress from happening in the first place."

Direct and indirect pressures on work stress

Work-related stress is defined by the Health and Safety Executive (HSE) (external website) as a reaction to events or experiences at work - so it is easy to appreciate how worries over job security, increased work pressure and other recession-related concerns can have an adverse impact on workers' stress levels.

Given that sickness absences linked to work-related stress were already on an upward trend before the onset of the current recession, it is highly plausible that economic factors will merely give a further upward twist to this problem.

In 2001/02, for example, just under one-third (32.4%) of working days lost to work-related ill-health and workplace injuries were linked to stress, depression or anxiety, according to the HSE's Health and safety statistics, 2001/02 (PDF format, 326K) (external website). By 2007/08 (PDF format, 1.61MB) (external website), the proportion had risen to four in 10 (39.9%) of all days of sickness absence.

John Hamilton was, until recently, head of group health and safety of Bradford & Bingley where he had developed a far-reaching stress management programme. He is now head of safety, health and wellbeing at Leeds Metropolitan University. He believes that the kinds of stress that employees could be experiencing in the workplace due to the side-effects of the recession span all six factors covered by the HSE's management standards for work-related stress (external website) - demands, control, support, relationships, role and change. For example, "demands" includes issues such as workload and work environment; while "change" covers job security and how organisational change is managed and communicated in the organisation.

Cooper concurs: "Change is potentially a big stressor for many people now, so it is important that it is managed as well as possible within organisations. This is a key area that can become an emotional health issue for some individuals. As well as increasing the risk of mental health problems, if the stress response is triggered as a result of increased work demands then this, coupled with less recovery time due to working longer hours, can increase adrenalisation. These powerful changes in blood chemistry can, over time, damage the immune system, increasing the likelihood of people becoming physically unwell, too."

Hamilton adds that work-related stress can trigger an existing mental health condition by acting as a "conduit". Many such underlying problems go untreated and unreported because of the stigma attached to mental ill health among employers and co-workers. He says that progress is being made, however: "Leeds Metropolitan University is signing up to the Mindful Employer initiative (external website) for example, which increases awareness of mental health at work and provides support for businesses."

Employers' stress management programmes

The November 2008 IRS survey of employers' stress management activities found that more than half (57.4%) of survey respondents believed that the recession will have an impact on their own organisation's stress management measures. Almost nine out of 10 of this group envisaged that their measures will have to be increased in order to deal with rising stress levels among their employees.

Encouragingly, none of the 121 survey respondents expected cost cutting to lead to the cancellation of their stress management programmes, although one employer in seven (14%) thought that their programmes might have to be reduced to save time and money.

"Given the financial constraints on so many organisations and the length of time it takes to build a stress management programme, now is not an ideal time to start such an initiative in the workplace," Hamilton comments. "It takes time and resources to embed a programme. Those organisations that do not have a programme already in place will find it much harder [to launch one], but it is very important that employees and managers have access to the kind of tools available through a stress management programme to deal with the current pressures on organisations and individuals."

Health promotion and encouraging wellness

Clearly, HR and line managers need to be equipped to manage a range of health and wellbeing issues arising from the recession, at a time when they are under increased pressure themselves - which hopefully does not translate into financial pressures to halt investment in health and wellbeing programmes.

The role of occupational health specialists could be helpful in tackling increased stress levels linked to the recession. However, as Davies points out: "Only 15% of employees in this country have access to occupational health [(OH)] services. The vast majority of the UK workforce is employed in companies of less than 250 people, and in the middle of a recession it is unlikely that organisations will find the resources to make OH provision available where there is currently no provision. So, we have to be realistic."

Where there is access to an OH service, Davies recommends that HR staff should collaborate with it in order to develop a stress management and wellbeing strategy. Joint monthly meetings could review absence and health data about the workforce, the type of help that is currently available, and whether or not it is meeting the needs of the business and its employees.

"They will need to look at the key potential stressors on people, such as worry, overwork and organisational change," he adds. "It may not be possible to stop people from worrying but it may be possible to provide simple, practical help to help individuals cope with the increased worry many may be experiencing."

According to Cooper, there are a number of approaches that employers can adopt in order to support employees during a recession: "A lot will be happening in organisations that employees have no opportunity to influence, but it should be possible to involve and communicate with people as much as possible to help give them some sense of control - for example, over how workloads can be best managed. It is how people perceive situations that dictate whether or not they will feel stressed, so building up their resilience is key. OH professionals can work with HR to help build up resilient behaviour on the part of employees," she says.

Swanton adds that support should also focus on encouraging employees to modify their behaviour and outlook. The more flexible a person's outlook, the less stress they are likely to feel when organisational change takes place and the better able they will be to deal with it.

Leeds Metropolitan University has noticed an increase in employee referrals to the services provided through its employee assistance programme (EAP) since the recession has started. According to Hamilton, the fact that employees are not only affected by the recession in a direct way also has implications for the kind of support that employers can provide.

He explains that the recession's impact on employees' partners and other family members, such as losing their jobs, can indirectly affect their own stress and absence levels. Employers can respond to this potential problem by promoting the services offered by their EAP that are open to the workforce's family. Many employers often provide services such as debt counselling that could be valuable in reducing financial worries and stress. Allied to this, Hamilton advises that employers should also promote their family-friendly and flexible working practices as these can reduce the impact of non-work-related stressors on employees' wellbeing.

Targeting support where it is needed

Another issue that employers may want to consider involves gathering the relevant data in order to be in a position to evaluate employees' mental wellbeing. Cooper points out that many employers have already introduced stress management or broader wellbeing programmes, but these are not always "joined up".

There are simple diagnostic tools available, such as surveys, that are not necessarily expensive and can provide an overview of both the pressures that employees perceive and how resilient they are to them. It is then possible to target efforts at those teams and individuals who are struggling the most.

Swanton agrees that it is important to measure the health of the organisation and of employees to provide baseline data. Once initiatives and changes have been introduced, further studies can be conducted to track their impact and focus future support more closely on the areas where it is required.

Line managers play a key role

Our panel of experts agrees that line managers are crucial to spotting early signs of stress, while their relationship with employees can itself play a major role in their wellbeing. Good management has never been more important, a view that is reflected in the work that the CIPD has undertaken with the HSE to develop practical help for HR and line managers to tackle stress at work (external website).

"One thing that managers can do differently is to think more overtly about the impact that work is having on employee health," Hamilton advises. "From the [HSE] management standards, two areas in particular come to mind - the effect of change, and the importance of good communication and consultation during a recession and demands, and the impact on those employees who remain with the organisation after a redundancy programme, for example."

Davies believes that the way in which line managers react to situations at work caused by the recession, such as staff reductions, will have a major impact on how well their teams deal with change. Vacant posts caused by recruitment freezes and the loss of people through redundancies could well lead to rising workloads among the staff who remain.

He says that managers have a choice between either simply telling employees to accept the changes and the increasing amounts of work, or providing support to help their teams work smarter. They can encourage them to focus their efforts and prioritise tasks. But, more generally, he says that it is also very important in the current climate that managers communicate with their staff. And employers should not forget that line managers themselves may need additional support so that they can cope with higher levels of pressure without feeling stressed.

Case study: IPC Media stands prepared

IPC Media (external website) is a leading UK consumer magazine publisher with around 80 brands. Since 2005, the company has introduced a range of specific occupational health and wellbeing initiatives, as well as strengthening its underlying attendance management framework. It has made a significant investment in health and wellbeing, including the setting up of an on-site medical facility at its London head office, which includes the services of an occupational health physician and physiotherapy treatment.

Ashley Bestwick, HR manager, says that it is too soon to fully appreciate the impact of the economic situation on employees' health and wellbeing. But the company is alert to the need to target specific interventions towards any groups of employees should they start to suffer from the effects of increased stress.

"Being prepared to spot any signs of increased pressure on employees, either from work itself or from circumstances outside the office, is important, so that we can intervene as soon as additional support is needed," he says. "We have an excellent employee assistance programme that offers a huge range of help, including debt counselling, legal advice and individual counselling. We promote this service widely to staff."

This proactive approach fits the company's strategy to managing attendance and wellbeing, which focuses on prevention as the best cure and stepping in at the earliest possible stage when additional support is needed, be it through providing stress counselling or physical therapy.

"Training managers to identify the early signs of stress, especially now, is key," he continues. "For example, many of our magazines rely on advertising and it is well known that this sector has been hard hit by the recession. This inevitably has an impact on sales staff who may feel they do not have as much control over their work because of a more challenging external market. We need to be alert to these factors and ready to provide any OH support necessary."

IPC Media is well placed to help any employees who find themselves in more challenging times. Its on-site occupational health centre offers a wide range of therapies to promote mental wellbeing, including yoga, meditation and relaxation classes.

Bestwick is realistic about the potential impact of the recession on employees, and his team is ready to respond to any increase in stress levels within his company's workforce.

This article was written by Rachel Suff, a freelance employment researcher and writer.

Additional resources on XpertHR