A few weeks ago we wrote an article on employer provided benefits (“EPBs”) – and over the past year we have explored the role of EPBs in SMEs (apologies for the initialism). So, this statistic caught our attention.
A Harvard University study found that in the US, insomnia is the root cause of the loss of 11.3 days’ worth of productivity per person per year.
The number of people sleeping less than the recommended level is on the rise – as a result of a range of factors including our modern 24/7 society, electronic media use and the ‘always on’ work culture. Not only is a lack of sleep associated with a range of negative lifestyle, social and health issues that result in absenteeism but also a lack of productivity while at work – so called presenteeism (not our word)
A 2016 Rand Corporation study estimated that the UK loses around 200,000 working days a year due to sleep deprivation (which equates to a £40bn hit to the UK economy). Working the Harvard numbers through would actually give us c. 375,000 lost days. The Rand report noted that “if those who sleep under 6 hours a night can increase their sleep to between 6 and 7 hours – this could add £24bn to the UK economy”.
Trying to calibrate these different studies is something of data headache – so best we just summarise it as a big expensive issue calling out to be addressed. Employers are beginning to recognise the importance of sleep as well as their own role in fostering a healthy sleep culture.
“Eight hours of sleep makes a big difference for me, and I try hard to make that a priority. For me, that’s the needed amount to feel energized and excited” Jeff Bezos, reported in Thrive Global
“To perform in a way that is required by my current job, I need seven hours of sleep, every night” Cees ‘t Hart, president and CEO of Carlsberg Group, reported in Harvard Business Review
McKinsey found 70 per cent of the leaders it surveyed thought that sleep management should be taught in organisations, alongside time management and communication skills
“A growing awareness of the dangers of sleep deprivation on health – and therefore, its impact on insurance costs and worker productivity – is prompting companies to try and improve their employees rest … Goldman Sachs has brought in sleep experts, Johnson & Johnson offers a digital health coaching program for battling insomnia and Google [its always google!!!] hosts ‘sleeposium’ events” The Washington Post
But can SMEs afford this kind of enlightened self-interest? With our SME hat on, we wondered what the impact of this stat is for a typical SME (accepting that there isn’t a ‘typical’ SME – see our recent MRS Fin Serv Conference presentation ‘Stuck in the 70s! Why our understanding of the SME sector needs a reboot’).
Let’s assume that the UK experiences a similar level of lost productivity i.e. 11.3 days per annum, and then put that into context. For an SME with 20 employees … that’s 226 days per annum across the business lost to sleep related issues. A UK employee generates £283 of ‘GDP’ per day. So, sleep related issues cost our SME ~£64,000 per annum in lost ‘productivity’.