More than a third of bosses suffered anxiety as they battled through recession. But experts agree stress is bad for business. So how do you create a healthier workplace?

A fifth of SME directors invested an average of £17,030 of personal savings into their business to increase its chances of survival during the recession, a survey by Hiscox revealed earlier this year. The insurer highlighted that the downturn hit bosses emotionally as well as financially, with 33 per cent increasing their working week by around 12.5 hours and 38 per cent suffering from stress.

This recession has set up "dangerous" new levels of workplace anxiety, agrees occupational stress consultant Carole Spiers, and it's bad for business. As presenteeism reappears and people are being asked to do more for less, so regular bad habits and behaviour develop.

"People are more insecure in their jobs, so they're putting up with things they otherwise wouldn't necessarily put up with," says Spiers. As a result, employers are not getting the best out of their employees. "If they don't feel valued, they're putting in long hours or they're treated like numbers, you'll end up with people who are not loyal to the organisation; who don't work hard. Performance goes down, profitability goes down and productivity goes down."

So how do businesses avoid this scenario? A good start is to understand what stress means. The word is bandied around as a one-word-fits-all term. It is often viewed as a mental health illness. And the issues relating to the condition can be complex—one person's stress is another's challenge.

But experts such as Eugene Farrell, chairman of the UK Employee Assistance Professionals Association, tend to refer to the Health and Safety Executive's definition of stress—an adverse reaction to pressure. He points out that while the reaction of the body to stress can lead to mental health symptoms, stress is not a mental illness.

"It's a set of reactions and responses to the subjective pressures experienced by a person," he says. "The level of stress experienced varies from person to person and the collective signs and symptoms vary, too. Nevertheless, it is real for the person experiencing it and can have a significant adverse reaction on health, wellbeing and cognition."

So if the demands of work are not exceeding a person's capacity or capability to cope, they may face some pressure but they're not stressed. They're able to use the positive effects of tension to learn and develop. But if the strain and demands become too much, that's different.

Some early signs that pressure has turned into stress include a change in behaviour, when people become unpredictable or indecisive. They're working longer hours, or consistently late. There are many manifestations of stress, says Kate Nowicki, director for Acas East Midlands. "It could be palpitations, anxiety, sleeplessness, crying, anger or sinking into genuine depression. There's a lot for managers to understand," she explains. "And it's hard because many individuals who present with stress usually have significant domestic stress on their plate also."

Pamela Gellatly, chief executive at consultancy Healthcare RM, agrees. People don't necessarily know how to cope with a lot of life events, she says, and they assume symptoms must be work-related. "But the stress might be because they're not taking enough exercise, or not eating properly, or they're under huge financial pressure, or they've got relationship problems. When we look at the cases that have been referred to us as work-related, there are very few where the primary factor is work," she says.

So what is the employer's responsibility? There are legal requirements, and then there are the extras that good businesses do to support employees. A company has a duty of care under European Union law to ensure the health and safety of its employees in the workplace, and that isn't just about slips and trips, it also includes stress. Therefore, says Farrell, organisations must be hands-on when they try to reduce and manage stress, and its causes.

The HSE says that employers should recognise psychological hazards at work-who could be harmed and how. As Gellatly says: "If you've got a bullying manager, there is a responsibility to identify that and manage it appropriately."

Enlightened organisations are those where communication is key and managers are trained to ensure that employees feel able to share their emotions. Well-trained, well-equipped line managers who understand the implications of somebody who's displaying signs of stress in the workplace are a company's best chance of ensuring that the health and wellbeing of their employees are looked after.

Elizabeth Tudball, communications director for Investors in People, says the best-performing organisations are those where line managers are supported, and in turn, help their employees. "It's about culture," she says. "Change has been a big factor in organisations lately and it can be unsettling. People need to understand their company's vision and mission. If it's changing, employers need to communicate more often to help people see where they fit in."

Managers often don't appreciate all the issues relating to stress, says Gellatly, and need to be properly trained to understand its complexities. As Spiers points out, people are regularly put into managerial posts for their academic prowess or IT skills rather than their people management ability, intuition or emotional intelligence. "Yet you can get so much more by knowing the right things to say and the right things not to say," she says.

There are several ways that organisations can boost their understanding of stress and measure the extent to which it affects the workplace, says Farrell. "They could utilise existing employee surveys to ask people how they're feeling and the factors they perceive contribute to increased pressure, as well as more formal health and safety risk assessments."

Nowicki at Acas agrees that senior managers need "the right tools in their armoury" so they can respond appropriately. These could include an occupational health service; a staff counselling service; stress management training; or communication skills training, such as appraisals, performance reviews, or return-to-work interviews. But most of all, she argues, "if employees are really engaged and locked in to management, stress at work is less manifest and better dealt with".

This is where a robust health and wellbeing policy proves useful. Research by Investors in People states that companies which do not have a strong health and wellbeing policy in place have greater sickness absence, higher rates of staff turnover and disengaged people.

The trend for focusing on wellbeing is, says Gellatly, a positive one. Getting people more active, doing more exercise, concentrating on nutrition and fostering an honest and open culture is a potent combination.

"It isn't soft and fluffy like people often think," she says. "If people aren't fit for purpose they'll get injured, physically or psychologically. People who take regular exercise tend to be happier, take fewer days off sick, and can cope with a lot of the things that are thrown at them. It's because the body is our own medicine cabinet."

So even though the word stress can be an easy label to hide behind, employers cannot afford to be judgemental. The best way to achieve results, says Spiers, is through enlightened leadership. "If you have a nice boss, one you can communicate with, somebody who understands you, and you want to go to work and have fun... if you bring that kind of culture into the organisation, it will flourish. Employees leave their bosses, they don't leave their business."