Posted by Midhat Zaman on March 22, 2024
Midhat Zaman

People spend about one-third of their lives sleeping. But despite that, we tend to underestimate the power of quality rest, and the consequences that stem from the lack of it  — like diminished motivation and creativity, vulnerability to mental health issues, and more.

Dialogue’s new Well-Being Report underscores just how essential quality sleep is to employee and organizational health. In fact, we found that sleep is the lifestyle factor where Canadians score lowest — taking centre stage over other well-being factors like stress, mood, activeness, and sense of purpose. We also know that some leading causes of sleep deprivation include work-related stress, family responsibilities, and financial insecurity.

These findings are not only concerning on an individual level. They’re concerning on an economic one, too: the impacts of poor sleep can create long-lasting damage to organizations, their culture, and profitability.


The employee cost of poor-quality sleep

Lack of motivation and productivity

Most successful organizations are always considering one simple question: how can we increase productivity, and, therefore, profitability? But, few realize that sleep could be part of the answer, as evidenced by the nearly one-third (30%) of employees who feel tired and overworked.

Research has shown that prolonged wakefulness can impair cognitive functioning so much that it can be compared to blood alcohol levels. This means that when individuals are sleep-deprived, they often experience feelings of fatigue, irritability, and mood swings — just like having consumed alcohol. This can significantly dampen their enthusiasm and drive to perform at their best.

Moreover, sleep deprivation disrupts the body's natural circadian rhythms, which regulate feelings of alertness and wakefulness. As a result, employees can struggle to feel motivated and engaged during work hours, leading to decreased workplace productivity. 

Reduced innovation

Employees who are constantly tired and demotivated due to sleep deprivation may also be less inclined to pursue career advancement or develop new skills. Not only is this detrimental on an individual level, but these trends can also hinder an organization's ability to develop a skilled workforce capable of driving innovation and growth, potentially limiting its long-term success.

Increased absenteeism and turnover rates

Poor sleep can also physically drive employees away from the office — not just mentally.

Frame 7 (3)In fact, Canada loses about 78,000 working days due to lack of sleep, as sleep-deprived employees are more likely to take sick days. And, employees with worse sleep quality are generally less satisfied with their jobs, leading to higher turnover rates.

Learn how Lightspeed reduced their absenteeism with Dialogue →

Negative reputational and cultural implications

Externally, a workforce that consistently underperforms due to poor sleep quality can damage an organization's reputation among clients, partners, and stakeholders. Negative publicity stemming from preventable errors or lapses in judgment can erode trust and credibility, potentially impacting future business opportunities.

And, internally, a culture that perpetuates sleep deprivation — like valorizing overtime work or fostering a high-stress environment — can lead to increased stress, employee burnout, and a lack of trust between management and staff, ultimately undermining organizational cohesion.


What poor sleep costs Canadian organizations 

The cumulative impact of poor quality sleep across employees ends up costing organizations thousands of dollars a year — both in immediate work output and rising healthcare costs. 

Work output

Sleep disorders and poor sleep quality cost Canadian employers $5,000 per employee per year in lost productivity.

As we’ve discovered, lack of sleep can decrease profitability due to costs related to:  

  • Lost working days
  • Missed deadlines or incomplete projects
  • Mistakes and poor-quality deliverables
  • New employee training and onboarding
  • Lost clients from reputational damage 

Healthcare costs

Likewise, poor sleep ramps up healthcare costs, given that it can influence other health issues — both physically, like cardiovascular, metabolic, and immune functioning, and mentally. In fact, mental health issues cause Canadian companies to lose an estimated $16.6 billion per year due to absenteeism.

More broadly, lack of sleep is a financial burden to everyone: in 2021 the direct and indirect costs of insomnia symptoms in Canada were $1.9 billion and $12.6 million respectively. The 2 most expensive chronic diseases attributable to insomnia symptoms were type 2 diabetes ($754 million) and depression ($706 million).

Frame 10


Adopting an effective employee health and wellness program 

The good news is that employers can rectify their employees' lack of sleep, and recoup costs.

Proactive, holistic care — which supports quality sleep — can mitigate costs and create a happier and healthier environment for everyone. 

Create flexible work arrangements

Flexible work arrangements provide employees with greater control over their environment and schedule, reducing stress levels and promoting better sleep quality in a number of ways:

Reduced commute time: Remote work or flexible hours can eliminate the need for employees to commute, allowing them to get more sleep and improve their overall sleep quality.

Customized work hours: With flexible work arrangements, employees can adjust their work hours to better suit their natural sleep patterns.

Improved work-life balance: With more control over their time, employees can prioritize self-care activities, relaxation, and physical activity, which promotes restorative sleep — and mental health and well-being. 

Take a proactive approach 

Sleep issues are often related to mental health challenges. To create a supportive work environment that’s both profitable and sustainable, managers and people leaders can receive training to recognize early signs of stress and anxiety. This can help tackle problems early on and prevent more serious consequences down the line.

Identifiable symptoms might include:

  • Increased irritability or social withdrawal
  • Decline in job performance, productivity, or quality of work
  • Fatigue, headaches, muscle tension, or digestive issues
  • Frequent crying, moodiness, or emotional outbursts
  • Increased absenteeism, tardiness, or unexplained absences
  • Vocalized concerns about work-related pressures
  • Increased defensiveness, or avoidance of interactions

Once identified, managers can guide employees towards the most appropriate resources available.

Offer holistic employee benefits and support 

To best support employees, organizations should adopt a well-being strategy that offers different wellness tools for both immediate and long-term support.

Immediate support: Successful well-being strategies offer immediate, high-touch care through access to clinical professionals. These professionals can guide and diagnose employees, and help set up individualized care plans — which may include referrals to a specialist who can help address the root cause of poor sleep.

Long-term support: Comprehensive resources — like videos, toolkits, and articles — on a range of health and well-being topics can offer a more self-guided approach to building healthier habits. These types of resources can help prioritize well-being and mitigate future health issues.

Each supports all employees’ needs, including physical activity and work-life balance, and promotes overall healthy lifestyles through virtual care.

Do more for your employees and your business

With Dialogue, employers can drastically improve their employees’ sleep, and in turn, their productivity — and save their organization thousands of dollars in the long run.

Through unified reporting on your employees’ health insights and Dialogue’s innovative Well-Being Score, employers can better understand the health and wellness of employees — and take the necessary steps to provide support and alleviate symptoms, all in one place.

Learn more about Canadians’ sleep and other well-being factors. 


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Topics: For Organizations

About the author

Midhat Zaman is a content strategist, marketer, and avid writer at Dialogue. She is deeply committed to helping HR leaders and employees effectively navigate workplace challenges. Midhat puts her love for great content to work with health and wellness in mind. Through insightful articles, comprehensive guides, and more, she aims to empower Canadians with the right support to improve their well-being.