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How to manage employee stress as an SME

08 Aug 2017

Four staff members holding a meeting with healthy food

Prevention is better than the cure when it comes to SMEs trying to manage the wellbeing of their staff

The Health and Safety Executive (HSE) defines stress as “the adverse reaction people have to excessive pressures or other types of demand placed on them".

In 2015/16, stress accounted for 37 per cent of all work related ill health cases and 45 per cent of all working days lost due to ill health.

If an employee working for a large organisation is suffering from stress there should be experienced and qualified personnel on hand to discuss and manage that situation. Furthermore, if that employee needs to take time off, the workload can usually be divided up among their colleagues.

But while the consequences of poor mental health in the workplace can lead to poor quality of work, poor decision-making and even conflict between colleagues, most SMEs are not able to offer that level of support.

Indeed, when the IoD conducted a survey among its members last year, only 14 per cent of respondents said they have a formal mental health policy in place.


Earlier this year, the IoD held the first ever SME Directors’ Mental Health Forum as part of its campaign to promote greater awareness of mental health at work.

The event was co-hosted by Mental Health First Aid (MHFA) which has free toolkits to download as well as courses for SMEs designed to show how you can spot the symptoms of mental health issues, offer initial help and guide a person towards support.

Much like learning physical first aid, MHFA teaches us to listen, reassure and respond, even in a crisis.

Of course, any number of factors can lead to stress at work but according to a survey of 1,200 UK employees carried out last year by CV-Library, and the majority respondents said that bad management was, by some distance, the leading factor.

The full results were as follows…

65.8% - Bad management

38% - Low morale

35.7% - Unfriendly colleagues

34.1%  - Workloads

29.3% - Long working hours

25.5% - Poor work/life balance

The HSE provides free information and advice for SMEs including a Management Competency Tool. This allows any direct manager to assess their own performance against a set of competencies identified as necessary to be able to deal with stress and be assured that their behaviour is not making the situation worse.


Some business leaders are taking a hands-on approach and have made wellbeing an integral part of their work culture.

Cat Gazzoli is the founder of Piccolo, a range of organic baby foods. Piccolo launched in April 2016 and within six months had generated over £2 million in turnover. 

She says: "In a small team you have to make a conscious effort not to get bogged down in the nuts and bolts of Excel spreadsheets, but once you’ve started the conversation, and made it ‘normal’ to talk about how you’re feeling with your boss or with a colleague, you’re halfway to a resolution.

“As a society, we’ve still got much to do to ensure that we all have the ability to talk openly about mental health.”

She also brings in an HR expert to sit down with an individual on a bi-monthly basis to ‘check the temperature’ of each team member. There are no targets, no KPIs and no analysis. It is simply designed KPIs around their role, just a 'feelings’ check-in.

She adds: “People are surprised that even as a small team we’ve put so much into our people, but in truth it’s been the secret to our success. Just being able to have that support network around gives staff the space they need to be creative and innovative.”


1. Prevention is better than the cure. Open and regular dialogue with employees will make them feel more comfortable to talk about stress as opposed to suffering in silence.

2. Don’t be afraid to seek outside support. There is an understandable tendency to think that nobody knows your business and your team better than you but getting external support offers a fresh perspective and could also allow you see the wood for the trees when it comes to recognising that an employee is suffering from stress.

3. Promoting good mental health at work will not only help an SME to manage employee stress but can also lead to a happier, more engaged and more productive workforce.


Mental Health First Aid – Training for a healthy organisation

Health and Safety Executive – Stress at work and resources for SMEs

ACAS booklet on stress at work

Mental health in the workplace

The IoD is committed to raising awareness of mental health issues in the workplace, with a particular focus on opening up the conversation for small- and medium-sized businesses. We have created a hub packed full of helpful advice, best practice and useful resources, as well as shared experiences from business leaders.

Go to IoD mental health hub

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