For decades, workplace stress was viewed primarily as an individual concern to be managed by HR—often through wellness programs or stress management workshops—rather than as a systemic, business-critical risk that warrants executive oversight. The consequences of this outdated perspective persist today—not due to a lack of awareness, but because workplace stress is often still treated as peripheral to business strategy rather than as integral to it.

In a Deloitte survey, 94% of C-suite executives agreed on the importance of being health-savvy leaders. However, 68% admitted they aren’t taking sufficient action to safeguard employee and stakeholder health. This indicates a significant gap between acknowledgment and implementation. Meanwhile, data from Aflac shows that although 54% of employees in 2024 felt their employer cared about their mental health (up from 48% in 2023), 38% reported high stress at work (a rise from 33% in 2023) suggesting that current investments are missing the mark on addressing stress-specific needs.

Why aren’t these investments working? We argue that one of the root causes of rising stress levels—despite investment—is companies’ limited ability to measure and quantify the problem. Just as companies rigorously measure financial, operational, and reputational risks, we suggest that they must also measure and manage stress as a business risk.

We introduce the Stress Risk Thermometer—a new framework to help organizations assess and track stress-driven business risk—and offer actionable strategies for building resilience through structured measurement, cross-functional accountability, and targeted interventions.

What Stress Costs Organizations

In our recent study of 1,005 full-time professionals across high-intensity industries in the U.S. and UK, we found that high levels of stress translate into an added $5.3 million annually in costs for every 1,000 employees at a company. Our analysis also found that the cost of stress for employers can be seen across three areas: cost control, risk mitigation, and sustained performance.

Cost Control

Our data shows that employees experiencing high stress file 2.5 times more health claims than their low-stress counterparts, creating a direct financial burden for businesses that self-insure. Rising health insurance costs, identified in Mercer’s People Risk Report 2024 as the number one business risk globally, are accelerating the urgency to address the cost risk. From 2020 to 2024, per-employee premium costs in the U.S. have surged by 28%, with annual increases averaging 6.5%.

Risk Mitigation

Additionally, 12% of employees in our study admitted to making mistakes, missing deadlines, or cutting corners in ways that could jeopardize regulatory compliance—and employees under high stress are 11 times more likely to do so. The financial penalties for non-compliance can be devastating, and we believe that what might be even harder to recover is the loss of stakeholder trust and reputational damage that stress-driven failures can create.

Sustained Performance

Our data shows that chronic stress drains workforce productivity. Highly stressed employees take 8 times more sick days and disengage at 4 times the rate of their low-stress peers. The combined cost of absenteeism, presenteeism (working while unproductive), and turnover results in an average of $12,000 in productivity loss per highly stressed employee, per year—a silent but substantial drag on profitability.

Stress-related turnover accounts for the largest share of cost—approximately $3.5 million annually—based on the assumption that one-third of employees who intend to leave will do so within a year, with turnover costs estimated conservatively at 100% of salary. Presenteeism costs employers around $1 million annually, using Gallup’s benchmark that disengagement-related productivity loss equates to 18% of salary. Lastly, stress-related absenteeism costs an estimated $778,000 per year, driven by the six additional sick days taken annually by high-stress employees, calculated over a 260-day work year.