research work 2
Case Study 2: The Impact of the Great Recession on Workp lace Stress
Several months after the official onset of the Great Recession in December 2007, i Elizabeth
Bernstein, writing in The Wall Street Journal , observed that “as the economy falters and layoffs
sweep certain industries, many people are more worri ed than ever about job security in
addition to fretting over the value of their homes, the cost of colle ge and a host of other issues.
Making matters worse: Stressed -out bosses and co -workers tend to pass tension on to others.” ii
Moreover, as observed by Ange la Scappatura, writing for the Canadian HR Reporter , when
“[t]here is a lot of uncertainty in the workplace [,] [i]t is important for the organization to
focus on eliminating anxiety among employees because heightened emotions can be detrimental
to the wo rkplace.” iii
“Put your ear to the ground nowadays and you hear a steady rumble of ‘stress -stress -stress -
stress’, like a herd of bison in the distance. Whether it’s a consequence of recessionary cost -
cutting and downsizing or the ever more cut -throat pace o f change in the global marketplace,
huge chunks of the workforce seem t o be stressed out by their jobs and it’s getting worse.” iv
Numerous reasons are cited for these elevated stress levels: lack of job security, shrinking
pensions, micromanagement and ov er-control of employees, de -skilled jobs, routine abuse by ill -
informed and ungrateful customers, long work hours, and virtually non -existent support from
management. v
One of the common corporate solutions for dealing, at least partially, with the impact of the
Great Recession has been downsizing . Although downsizing can help companies with cost
reductions, such an action also has substantial negative impacts on employee attitudes.
Employees perceive the layoffs as a rupturing of the employer -employee con tract; and those who
survive the layoffs typically suffer from low morale and lack of trust in and loyalty to their
employer. vi Yet all too often employers do not understand the impact of employee stress on
compa nies’ success particularly the overall custom er experience and attainment of overall
business objectives. vii
Hiring and salary freezes, layoffs, and bonus reductions all in an attempt to cut costs can lead
to an increase in employees’ workloads and adversely affect their ability to deal with work -
rela ted stress .viii Paula Allen, vice -president of organizational solutions and training at Shepell -
fgi in Toronto, Canada, says that with the increased demands on employees, many of them are
not taking care of themselves with respect to taking stock of the situa tion and solving problems
or even with regard to getting enough sleep and relaxation. She continues, “ ‘[t]here’s always the
feeling, if things are rough, [that] you should be working 24 hours a day. If you are doing th at,
it’s going to take a toll. You’re going to build resentment, fatigue.’ ” ix
Commenting in October 2010 after the official end of the Great Recession in June 2009, x Sarah Dobson, writing in the Canadian HR Reporter , expressed a view shared by many people in
North America: “The recent reces sion was grueling, no doubt, and it’s not over yet. So it’s no
surprise employees are complaining of higher stress and heavier workloads.” xi According to
Carole Spiers, an occupational stress consultant, the Great Recession created dangerous, ne w
levels of workplace anxiety. “People are more insecure in their jobs, so they’re putting up with
things they otherwise wouldn’t necessarily put up with . As a result, employers are not getting
the best out of their employees.” xii Spiers also observes that when emplo yees do not feel they are
valued by their employers, or employees are working long hours or feel as though they are
treated like numbers, those employees will not be loyal to the organization. In addition,
employee performance suffers, and company producti vity and profitability declines. xiii
SOURCE: This case was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal Chair of Christian
Business Ethics and Professor of Ma nagement, College of Business Administration, Valparaiso University.
i Anonymous, “US Business Cycle Expa nsions and Contractions, ” The National Bureau of Economic Research,
http://www.nber.org/cycles/cyclesmain.html (accessed February 4, 2014 ). ii E. Bernstein, “When a Co -Worker Is Stressed Out, ” The W all Street Journal (Eastern edition) (August 26, 2008):
D1. iii A. Scappatura, “EAP Use Soars as Economy Tanks: Study, ” Canadian HR Reporter 22(6) (March 23, 2009): 1 -2. iv R. Rhymer, “Under Pressure, ” Management Today (March 2010): 50 -52. v R. Rhymer, “Under Pressure, ” Management Today (March 2010): 50 -52. vi Anonymous, “Layoff ‘Survivor ’ Stress: How to Manage the Guilt and the Workload, ” HR Focus 86(6) (August
2009): 4 -6. vii S. Dobson, “Stress Levels High as Recession Recedes: Surveys, ” Canadian HR Reporter 23(17) (October 4,
2010): 1, 12. viii S. Dobson, “Stress Levels High as Recession Recedes: Surveys, ” Canadian HR Reporter 23(17) (October 4,
2010): 1, 12. ix S. Dobson, “Stress Levels High as Recession Recedes: Surveys, ” Canadian HR Reporter 23(17) (October 4,
2010): 1, 12. x Anonymous, “US Business Cycle Expansions and Contractions,” The National Bureau of Economic Research,
http://www.nber.org/cycles/cyclesmain.html (accessed February 4, 2014). xi S. Dob son, “Stress Levels High as Recession Recedes: Surveys,” Canadian HR Reporter 23(17) (October 4,
2010): 1, 12. xii A. Duff, “Under Pressure,” Director 63(9) (May 2010): 31 -32. xiii A. Duff, “Under Pressure,” Director 63(9) (May 2010): 31 -32.
