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Is a Lack of Sleep Crushing the Economy?

Mar 29, 2017
World Class Faculty & Research


SMITH BRAIN TRUST — Can U.S. companies simultaneously encourage that employees get enough sleep (seven-plus hours nightly) and maintain a competitive edge? Sleep deprivation costs U.S. firms 1.2 million employee work days and roughly $411 billion in revenue a year, according a recent report from the RAND Corporation. That knocks an estimated 2.28 percent off the nation’s gross domestic product each year.

The groggy workforce is a worldwide challenge to businesses, but it's especially acute in the United States, says Gilad Chen, the Robert H. Smith Chair in Organizational Behavior at the University of Maryland’s Robert H. Smith School of Business. “One root of this issue can be found in the contrast between U.S. and European business cultures and employment regulations: European Union countries have regulations and cultural norms that generally support worker well-being, more so than does the U.S.” 

The comparison, Chen notes, excludes the likes of the airline industry, where worker fatigue can be a life-or-death issue and is therefore governed by the Federal Aviation Administration.

Chen, who is also editor of the Journal of Applied Psychology, says recent findings on the impact of sleep deprivation on employee effectiveness are countering the notion that employee well-being and productivity are mutually exclusive. And that's a good thing, Chen says. Lack of high-quality sleep has been linked to greater anxiety and depression, and to lower levels of employee productivity.

There's also "a causal connection" between sleep and employee and managerial behaviors, Chen says. In studies, workers in sleep-deprived experimental groups “behaved less ethically, and leaders in experimental groups with lower sleep quality were found to be less inspiring at work.”

Vicious cycle

The reverse is also true. The higher your work stress level, and the lower your productivity, the more likely you are to continue to suffer from sleep deprivation. “It can be ongoing vicious cycle,” Chen says.

Another research stream shows that workers’ sleep patterns improve when companies empower them to decide how and when to get their work done, Chen adds. It's part of the reason why some companies allow telework, flexible shifts and the occasional in-office nap. Resource-rich firms such as Google, Nike and Ben & Jerry’s have really embraced that strategy, even equipping offices with futuristic-looking sleep pods.

Other companies take a different approach to sleep encouragement. Health insurer Aetna pays a $300 yearly bonus to employees who volunteer to be company-monitored via a health-tracking device and meet the 7-hours-of-sleep threshold.

Regular exercise also can counter the negative effects of sleep deprivation, according to research. Employers can get on board with that science by proving workplace fitness equipment or subsidizing gym memberships. Many do.

Quality vs. quantity

Still, sleep remains a largely missing component to human-resource wellness programs in the U.S., CareerBuilder’s chief HR officer Rosemary Haefner told Bloomberg BNA last week. A recent survey by the job-search website found that more workers get too little sleep than enough sleep, with 6 percent averaging less than five hours per night. Some experts suggest screening workers for sleep disorders and poor sleep habits, and making coaches available to answer questions about sleep issues.

Chen says such measures address sleep quality more than sleep quantity  the latter being more tangible for companies to manage. He says an alternative and low-cost “sleep-quality” strategy is to direct employees to a commercially available app, like Sleepio. “A recent study in the Journal of Applied Psychology tested the app and determined it to be effective for promoting more healthy sleep regimen.”




About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, specialty master's, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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