Spiralling stress in the workplace is costing firms £1.24 billion a year in sickness absence and lost productivity, a report revealed today.

The problem is seriously damaging attempts by industry to boost productivity and attract staff.

A poll of 700 managers showed that most believed stress was hitting productivity and 60 per cent blamed it for increased levels of staff turnover.

More than one in four of those questioned by Personnel Today magazine and the Health and Safety Executive (HSE) said potential recruits were put off working for a firm because they feared the job would be too stressful.

Days lost to stress totalled 1,554,263 among the 581 employers who provided an estimate. This suggested that 11 per cent of the UK's total sickness absence was due to stress.

More than half of those polled said the problem was getting worse, with only seven per cent reporting an improvement.

One in two employers said they believed half the days lost to stress were not genuine.

Jane King, editor of Personnel Today, said: "As organisations strive to increase their productivity they appear to be putting greater stress on their employees. This in turn is adversely affecting their productivity.

"This is a vicious circle that employers must interrupt.

"A first step is to ensure that individuals have clear, achievable aims and targets and they are given proper training to help them achieve them."

Half of those surveyed said poor management was a major barrier to overcoming workplace stress, while a third revealed managers did not even acknowledge it was an issue.

Personnel Today said the UK's productivity performance was "atrocious", with output per hours worked 20 per cent lower than in Germany and France and way below the European average.

The report said: "The only reason Britain has kept pace is because we work the longest hours in Europe.

"We are having to work harder and longer to maintain our position in the pack - less inspiration means more perspiration."

Elizabeth Gyngell, head of the better working environment division at the HSE, said: "The findings have confirmed the feedback we have already been receiving from employers - they would welcome help with identifying practical interventions to manage the sources of stress."

Monday October 20, 2003