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The High Price of Sleep-deprived Employees

Gelman, Rosenberg & Freedman CPAs is a member of CPAmerica International, an association of CPA and consulting firms that provides industry knowledge including insightful articles, to help member firms serve clients and other individuals and organizations.

The headlines of recent articles on the effects of sleep deprivation on health and work say it all:

  • Sleep-deprived workers cost U.S. $63.2 billion
  • Insomnia costs sleep-deprived employees 252 million productive days a year
  • A deadly case of sleep deprivation
  • Sleep-deprived employees may make risky decisions
  • Too little sleep: the new performance killer

A study by the Institute of Medicine, the health arm of the National Academy of Sciences, found that 50 to 70 million Americans suffer from chronic sleep disorders that adversely affect their daily functioning and health. The study found links between sleep deprivation and increased risk of diabetes, hypertension, obesity, heart attack, depression and stroke.

needing sleep

Employers bear much of the burden of sleep deprivation in the form of lower productivity and higher healthcare costs. A survey of 4,200 employees in manufacturing, transportation and healthcare companies looked at the relationship between sleep and work. Respondents said they needed an average of 7.6 hours of sleep per day to function well, but that they only got an average of 6.4 hours.

Ten percent said they had insomnia, and 45 percent said they had some trouble sleeping. The researchers estimated that each employee with insomnia cost the company $3,156 per year in lost productivity, and each employee with some sleep difficulty cost about $2,500. This does not include the cost of absenteeism, which was five days per year higher for those with insomnia.

Another recent study found that missing just one night’s sleep has a noticeable impact on the brain’s ability to function, and higher-order brain activity is the first to go. The brain has to channel energy away from concentrating – for example, on solving a difficult problem – and use it just to stay awake.

The conclusion of the study was that even though you may be able to stay awake for a long time, you progressively lose the ability to think. Clearly, sleep-deprived employees should be an issue of concern to employers.


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Wendy Gilbert |  Director
MarylandOnline