Welcome to the “Work More” Economy

March 1, 2012

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All work and little play makes for resentful employees.

It also creates anxious, more mistake-prone workers. And these problems are on the rise as the economy continues to stagnate and more employees are taking the hit of reduced workforces, salaries and expenditures.

Since the recession began in 2007, companies have grown but have avoided hiring more. This puts pressure on the remaining employees, to the point where more are seeking counseling and even taking anti-anxiety medication and antidepressants.

Companies are seeing higher absenteeism and rising turnover rates, which reached more than 30 percent in 2010.

Unrelenting Pressure Creates Problems
Many employees are suffering on the flip side of the jobless recovery. Call it the “work-more economy.” Many workers are taking on extra responsibilities and in some cases doing two jobs for the price of one. This situation threatens not just workers’ well-being, but companies’ long-term success.

In the long run, such work climates threaten long-term productivity, employee engagement, corporate reputation and talent retention.

This increased intensity in the workforce stems from companies trying to navigate a highly changeable business environment. Employers need to do something to fill the void created by laid-off workers, hiring freezes and new business growth.

From a strictly financial perspective, asking more of the existing workforce makes sense. Companies need to preserve cash to prepare for future economic shocks. Plus, hiring more employees too soon increases the chance of future layoffs. And higher expectations on the job can be a good thing for both workers and companies.

But there’s a tipping point. And the research indicates that many firms are going too far to the wrong side.

In a survey of 600 U.S. workers that Workforce Management conducted with Workplace Options, a provider of EAP services, 55 percent of respondents said that their job responsibilities had increased as a result of the troubled economy. More than a quarter of workers (27 percent) said that their duties had doubled. Among those with extra work on their plates, 51 percent said the added duties have had a negative effect on their well-being.

A Major Disconnect
There’s some evidence that companies are starting to pay attention to the dangers of overworking employees. But many organizations fail to recognize the risks. “Work-related stress” was the reason top-performing employees in the U.S. most frequently cited for why they would leave their organization, according to a recent report by consulting firm Towers Watson & Co. and professional association WorldatWork. However, when employers were asked for the same report about reasons high performers would jump ship, stress didn’t even rank among their top five most frequent responses.

That disconnect helps explain why more organizations are struggling to hold on to key talent. The percentage of U.S. companies that are having difficulty retaining critical-skill employees has risen from 16 percent in 2009 to 31 percent in 2010 to 36 percent in 2011, according to Towers Watson’s report.

Moving Past The Work-More Economy
Some of the solutions to the stressed-out workforce are straightforward, though they come with costs.

The most obvious answer is hiring more people. A successful case study from personal care products maker Seventh Generation Inc. supports this choice. Over the past few years, Seventh Generation’s employees had been feeling pressure, partially due to strong business growth. In 2009, the company’s former CEO acknowledged that “our work/home balance is clearly out of whack.”

But since then, Seventh Generation has increased its workforce by about 25 percent, and “The level of anxiety is clearly less because we have more help to bear the burdens,” says John LeBourveau, Seventh Generation’s vice president of HR.

Seventh Generation’s ranking on a list of the best employers in Vermont rose from fifth in 2010 to second in 2011–probably not a coincidence.

More companies may follow Seventh Generation’s example in the months ahead. U.S. employers expect hiring to increase slightly in the first quarter of 2012, according to a study released in mid-December by employment services company ManpowerGroup.

Another response to an overburdened workforce is to turn to contingent staffing. Temporary help services employment in the United States has risen from 1.8 million workers in November 2009 to 2.2 million a year later to 2.3 million in November 2011. Research firm Staffing Industry Analysts estimates U.S. staffing industry revenue growth of 10 percent in 2012 to $113 billion.

The addition of temporary personnel can relieve this pressure, help your core employees avoid burnout, avoid productivity losses, and limit turnover expenses.

It can also fit into a strained budget, as all costs associated with processing and administering payroll and benefits are handled by the staffing agency. This helps you control costs, improve production, and manage risk. And when the temporary employees are pre-screened, you eliminate training costs and improve quality and productivity immediately.