Sleep Deprivation Is Quietly Draining Revenue From Brands in the Covid-19 Era

Nearly a quarter of employees are tossing and turning all night—and that is expensive

illustration of a small stick figure passed out at a desk in front of a computer
Perhaps unsurprisingly, employees are reporting that they're having trouble sleeping in these dark days. Malte Mueller/Getty Images
Headshot of Robert Klara

Key insights:

While the final tally is many months away, economists have already estimated that dealing with the Covid-19 pandemic will cost the American economy anywhere from $2 trillion to as much as $5 trillion. Experts base those figures on lost revenues: cars not bought, flights not booked, restaurant meals not eaten.

But while most of the frightening media stories concerning the losses that most businesses are sustaining deal with vanishing sales, there’s another serious drain on company coffers that few are talking about: the cost of lost sleep.

Simply put, when employees don’t get enough sleep, productivity takes a gut punch. And right now, tens of millions of Americans are not sleeping. In fact, nearly a quarter of us (22%) report having trouble sleeping because of concerns over Covid-19, according to a just-released report from sleep education site SleepHelp, which surveyed close to a thousand adults.

The survey also found that women are having a harder time sleeping compared to men (26% vs. 17%), and the age cohort most affected is Gen-X, Americans between 39 and 54 years of age. (Among millennials, 18% admitted they had been sleeping less due to worries about contracting Covid-19.)

And though you might expect that Americans who’ve lost their jobs would be the ones lying awake at night, it turns out that salaried employees still on the payroll are most likely to be staring at the ceiling at 3 a.m. Almost 20% of salary earners said they’re sleeping less because of Covid-19 concerns, versus 13% of hourly workers and just 9% of those who’ve lost their jobs.

As for what these legions of sleepless employees portend for American industry, SleepHelp’s managing editor Logan Foley puts it plainly: “There are no two ways about it: Sleep deprivation, be it insufficient sleep or inconsistent sleep, is a primary cause to productivity loss,” she said. “Research not only backs this up but attributes very real economic loss to sleep issues.”

The ways Covid-19 is costing us a good night’s rest

Lisa Medalie, a behavioral sleep medicine specialist at the University of Chicago, counts at least six reasons why Americans are having a hard time sleeping during the Covid-19 era, ranging from fewer opportunities to exercise to more time spent staring at the blue-spectrum light from screens, which inhibits the body’s production of the sleep hormone melatonin.

But the most obvious culprit is stress.

“Given the uncertainty alongside the pandemic—’When will this end? How will this impact my health, finances and well-being?’—stress and worry have exponentially increased,” Medalie said. “Even the calmest humans feel unsettled. With elevated stress and worry comes mind racing and anxiety symptoms, which can in turn keep people awake during their dedicated sleep hours.”

What exactly are we all stressed about? According to a poll released Tuesday by Engine Insights, 92% of respondents are worried about the national economy; 86% are fretting about a loved one getting sick; 81% are concerned that their children’s educations are suffering; 71% are concerned about their personal finances; and 62% are worried about their own mental state.

Amber Clayton, Knowledge Center director for the Society for Human Resource Management (SHRM), points to another way that the pandemic is costing Americans a good night’s sleep: the fact that about 60% of us are working from home right now.

“We have a tendency to work longer than we normally would, and we don’t shut down because work is home,” Clayton said. “So, what happens is people start to go to bed later and wake up later. For those who never worked from home, this is not something they’ve done on a full-time basis, so there’s some disruption.”

Quite a bit of disruption, in fact. SHRM’s most recent study on the topic found that seven in 10 workers admit they’re “struggling to adapt to remote work,” and more than a third are “grappling with changes in employee productivity.”

Exhausted employees mean lost revenues

It’s a safe assumption that an employee who’s tired probably isn’t going to work as hard or as efficiently as one who’s had a solid seven or eight hours of sleep, but the correlation between rest and productivity is not only clinically provable but, in terms of the money it costs, also quantifiable.

The National Institutes of Health maintains that sleep deprivation takes a significant toll on many skill sets essential in the workplace. Inadequate sleep, its site states, “leads to a general slowing of response speed and increased variability in performance, particularly for simple measures of alertness, attention and vigilance.” It also follows that sufficient sleep recharges many of the mental faculties necessary for competent work performance.

According to wellness authority Lisa Raggiri, “sleep restocks our bodies’ ability to heal itself, helps recalibrate emotions, fine-tunes metabolisms and even enhances one’s ability to retain information.”

And when heavy-lidded employees drag themselves to the office (or, these days, to their laptops), the dollar losses can be significant. Several years ago, the Rand Corporation, which studies risk and security issues surrounding nuclear weapons for the United States government, took up sleep’s relation to industrial productivity. Its findings were startling.

“Given the potential adverse effects of insufficient sleep on health, well-being and productivity,” Rand’s report stated, “the consequences of sleep deprivation have far-reaching economic consequences.”

Rand’s researchers found that American businesses lose a collective $411 billion a year because their sleep-deprived employees not only don’t perform their jobs as well but call in sick more frequently. American industry loses somewhere around 1.2 million working days as a result of employees who haven’t had enough rest. Consider that these findings apply to normal business conditions when today’s are anything but.

Are companies even thinking about this stuff?

Right now, it’s a fair bet that most employers simply have their hands full just keeping workers on the payroll and figuring out how to sustain even fractional revenues. But Clayton reports that some of SHRM’s member companies are more than aware of the role that stress (if not lost sleep exactly) is playing in terms of maintaining normal business operations—whatever normal means at a time like this.

“We have members who’ve contacted us and said, ‘My employees are afraid to come to work,’” she said. “They have anxiety, and they’re not sure how to handle those types of situations. And less sleep could be the result of anxiety and depression, and not having enough sleep will eventually affect someone’s productivity.”

Clayton advises both employer and employee to be mindful of the dynamics created by lost sleep, pointing out that employees can do themselves a favor by not staying up late watching Netflix instead of going to bed.

And employers, she said, “should be mindful that when [their workers are] at home, not to text or message them often. … [Employers] should think about these things and make sure they’re not disrupting a night’s sleep. We need to allow our employees to shut down and get that well-needed rest and be able to work.”

Branding and marketing authority Matt Kucharski, president of communications firm Padilla, added that while high levels of stress are unquestionably a risk for worker insomnia right now, the Covid-19 era might actually have a small bright side when it comes to getting a solid eight hours.

“Some people are exhausted for managing both work and home simultaneously and fall asleep when their heads hit the pillow,” he said, adding that “for some, the removal of an hour-long commute every morning and having an evening is a small silver lining as it gives them the ability to sleep in.”


@UpperEastRob robert.klara@adweek.com Robert Klara is a senior editor, brands at Adweek, where he specializes in covering the evolution and impact of brands.
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