Stressful working conditions are a common workplace reality, but now, the faltering economy has heightened anxiety levels for nearly all employees. Jittery employees worry about shrinking retirement funds, the company’s bottom line, and the skyrocketing cost of nearly everything. Afraid of getting laid off, employees may feel more need to push themselves harder to prove their value; nervous supervisors are under pressure to do more with fewer resources.

What’s more, an employee who has personal financial woes—perhaps a home is in foreclosure—is unlikely to check his or her problems at the door, which can affect the person’s performance and place more stress on co-workers. This is no isolated problem: Even before the current economic crisis workers reported being stressed by financial concerns.

Employee stress, whether from internal or external factors, can take a heavy toll on your business, including high turnover, frequent illness and absences, increased workers’ comp premiums, and reduced productivity.

Fortunately, you can reduce stress in your workplace and have happier and healthier employees. The solution often lies in making organizational changes that will improve working conditions and in taking steps to help employees manage stress in their personal lives that could otherwise spill over to the workplace.

12 Ways to Help Lower Stress

Here are 12 ways you can decrease—or prevent—employee stress during bad (and good) economic times:

1. Adjust expectations after cutbacks

Staff reductions and budget cuts increase stress levels by overburdening the remaining workers. So today’s leaner budgets call for careful prioritizing, and smaller workforces require managing workloads prudently. Avoid assigning new projects your employees can’t adequately handle.

2. Communicate with employees

Try to keep workers abreast of what’s going on in your organization—the good news and the bad. Provide an opportunity for them to air concerns informally with their supervisors, in meetings, or perhaps in a Q&A column in a company newsletter. This can help reduce stress-inducing gossip or rumors.

3. Be straightforward

If you’re implementing a layoff, being honest with the survivors will help alleviate their fears. Saying everything is fine, when it isn’t, will undermine employees’ trust in the company.

4. Whatever you do to “right-size up”, do it only once

Whenever you bring about changes, layoffs, or cutbacks due to an economic downturn, every time something occurs it brings morale lower and stress higher. Trust gets lost and fear becomes the driving factor. Plan strategically so that everything you carry out takes place at one time. Once completed, let your employees know.

5. Reduce conflicts

Whenever you bring about changes, layoffs, or cutbacks due to an economic downturn, every time something occurs it brings morale lower and stress higher. Trust gets lost and fear becomes the driving factor. Plan strategically so that everything you carry out takes place at one time. Once completed, let your employees know.

6. Maintain employee benefits

Stress levels rise when valuable benefits such as health insurance, vacation pay, and sick leave are cut back. Weigh the savings from reducing benefits against the potentially high costs of lowered productivity and burnout.

7. Encourage vacations

Be sure workers take vacation time instead of letting it accrue indefinitely or getting paid for it. Employees who get to relax and rejuvenate away from work develop fewer stress-related ailments and are more alert and energetic on return.

8. Give employees more control

Workers who have some control over how they do their jobs take greater pride in their work, are more productive, have more self-confidence, and cope better with job stress. Allow employees to make decisions, undertake new challenges, and learn from their mistakes. Streamlining red tape—for example, giving a modest increase in spending authority without supervisor approval—can give an employee a greater sense of control over the job.

9. Recognize and reward

Bonuses, achievement awards, or public praise for a job well done can pay off in boosted productivity, loyalty, and morale.

10. Examine environmental factors

Stress can be exacerbated by environmental conditions such as crowding, noise, air pollution, or ergonomic problems. Assess your workplace and consider environmental solutions.

11. Educate workers on finances and recession-related topics

Informing employees about how to stay afloat in a recession can help them feel less anxious. Consider holding brown-bag lunch training sessions on topics such as reducing credit card debt, making a budget, investing, 401(k) distribution, and living on a retirement income.

12. Offer an Employee Assistance Program (EAP) and a Pastoral Counseling Program

If you don’t already have an EAP or pastor support program, gather a list of local resources that employees can turn to when they need help managing stress.

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About the author:

Ron Smedley is president of Synergistic Resource Associates, a full-service human resource/development consulting group that works directly with both marketplace and ministry organizations.  As a professional human resource generalist, Ron is often called upon in the area of labor law interpretation and policy/procedure writing with the focus on practically, strategically, and relationally synergizing the systems of the organization with the development of their leadership and employees.  Besides consulting full-time, Ron instructs graduate adult students at Biola University and Claremont Graduate Universities within leadership, performance management, personal and corporate conflict, human resource strategy, and ethics courses.

Ron’s passion is seeing men, women, and organizations grow beyond their paradigm and the “box” they so often place themselves within. For questions or support surrounding this article, you can email him at ron.smedley@sraonline.net or call (714) 993-5003. His office is located in Placentia, CA.