Levels of stress felt by business leaders have shown their lowest annual increase since 2005 according to global research of 6,000 businesses from the Grant Thornton International Business Report (IBR). With economies depressed and the outlook for many still uncertain, this raises the question of whether business leaders are managing their goals to alleviate stress, adding a further brake to growth, or whether they have learnt to better manage the challenges they are facing.
In 2010, net* 45% of business leaders reported an increase in stress levels over the past 12 months, but this fell to just 28% in 2011. And the pattern is consistent around the world; net 21% of business leaders in North America cite an increase in stress in the last 12 months, compared with 35% in 2010. Asia Pacific is the most stressed region with net 44% reporting an increase in stress over the past 12 months, but this too is down from 58% in 2010. Even in distressed Europe, where the focus of economic turbulence resides, the net increase in stress has declined from 40% in 2010 to 22% this year.
Ed Nusbaum, CEO of Grant Thornton International, said: “As the economic crisis has continued, the majority of business leaders have learnt to better manage the challenges they are facing, including dealing with stress by adjusting to more realistic performance measures and goals. This is just as true in the booming BRIC economies as in troubled Europe.
“What we are seeing from our clients across the globe is more effective management of this economic volatility and uncertainty. Businesses have also learned to analyse risks better, factoring them into their performance, and are setting themselves more realistic targets. And, of course, some businesses are faring well despite the bleak economic backdrop.”
The issue of stress in business was highlighted recently when António Horta-Osório, CEO of Lloyds Banking Group in the United Kingdom, was forced to take almost three months off because of a stress related illness.
The IBR indicates that reaching performance targets is by far the biggest headache for businesses; globally 30% of business leaders cite it as the major cause of workplace stress, as do 37 of the 40 economies covered by the survey. Stress caused by the volume of communications, office politics (both 11%) and work/life balance (9%) are much less cited.
Professor John Maule, an expert in Decision Research at Leeds University Business School in the United Kingdom, said: “The increased demands on managers that occur during periods of economic volatility have the potential to increase stress levels. However, people always try to actively manage the demands to reduce these levels. Since they are unable to do much about the pressures coming from the external business environment they must look internally for the solution.
“With achievement of performance targets the greatest contributor of stress for business owners, by reducing these goals they can lower the discrepancy between what they want to achieve and what might happen. This is an effective strategy for reducing stress, but the consequence of lowering performance aspirations will decrease economic activity – this at a time when it is most needed.”
Playing sports/exercising emerges from the research as the principal way in which business leaders relieve stress. Globally 62% of respondents relieve stress in this way, although interestingly this ranges from 78% in North America to just 40% in the BRIC economies. Other popular ways of relieving stress are entertainment both in (54%) and out (46%) of the home. Delegating work and keeping a regular working pattern (both 35%) are also cited by businesses.
However, the IBR indicates that just 42% of business leaders take a holiday to relieve stress, behind exercise/playing sports (62%) and entertainment in home (54%). This is despite a clear correlation between the number of holidays taken by business leaders and their levels of stress (as shown below).
Those countries where businesses take the fewest holidays – such as Japan, mainland China and Thailand – report the biggest increases in stress. Conversely, business leaders in the Netherlands, Russia and Denmark took the most days off in 2011 and reported the lowest increases in stress.
Ed Nusbaum added: “The results provide clear evidence that taking a holiday can reduce the impact of stress on business leaders. Business growth prospects benefit from having strong, focused direction so we strongly advocate taking the time to step away, reflect and recharge in order to bring a new perspective to decision making.”
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Notes to editors
The Grant Thornton International Business Report (IBR) provides insight into the views and expectations of over 11,500 businesses per year across 40 economies. This unique survey draws upon 20 years of trend data for most European participants and nine years for many non-European economies. For more information, please visit: www.internationalbusinessreport.com.