ZzZs TO DOLLARS
How Much Does Sleep Deprivation Cost?

The world seems to teach that the more you work, the more money you can make.

 

It makes sense, right? You work more, you earn more? So let’s all sleep less, work more, and retire early. Wrong.

When working under fatigue, statistics actually show that productivity plummets as costs go up.

Consider the story of Bob, a 9 to 5 junior accountant.  At his firm, an opportunity has opened up for him to become a partner. To show his dedication, he begins working overtime, taking projects home, and cutting out two to three hours of sleep.

 

Bob’s alarm blares at 6:00 a.m. and he downs a cup of coffee and sluggishly trundles into work. Unfortunately, his head is pounding and he keeps dozing off. To make up for this he stays up that evening and works even more. Bob enters a vicious cycle of working late to make up for the less productive time during the day.

All the while Bob’s productivity is shifting, his health deteriorates, he misses work, and instead of getting the big promotion, Bob is fired.

Illustration Of Bob Sleeping at Work and His Angry Boss

The truth is that sleep deprivation costs both directly and indirectly, not to mention the loss in human life.

 

Some say it costs us billions. So how does it all add up?

Global Numbers

Sleeping is an essential part of human nature and it is something that is being sacrificed for a cause that does not statistically add up. Around 3% of GDP is lost due to sleep deprivation, whereas a decrease in this statistic has the potential to add billions back into the economy. This map shows how much money is lost annually in the United States, Canada, the United Kingdom, Germany, and Japan.

Graph of Costs of Insufficient Sleep
Source: “Why Sleep Matters: Quantifying the Economic Costs of Insufficient Sleep”
[1] Rand Corporation

The old saying, “time is money” is more relevant here than ever. Work time lost due to lack of sleep is literal money being wasted. The chart below demonstrates the correlation between lost time and lost money.

Total Working Time Lost Across Five OECD Countries
  US UK Germany Japan Canada
# Full-time workers {in thousands} 121,490 22,733 28,965 47,790 14,559
# Part-time workers {in thousands} 27,340 8,296 11,245 14,000 3,387
Days lost {full-time}: < 6 hours 528,377 87,372 60,545 185,289 22,089
Days lost {full-time}: < 6 hours 479,643 64,447 90,023 282,009 41,888
Days lost {part-time}: 6 to 7 hours 118,906 31,885 23,506 54,280 5,139
Days lost {part-time}: 6 to 7 hours 107,938 23,519 34,951 82,614 9,745
Days lost: total 1,234,864 207,224 209,024 604,191 78,861
Hours lost: total 9,878,910 1,657,792 1,672,192 4,833,532 630,886

Less Sleep Means Reduced Productivity

According to the Center for Disease Control 1 in 3 adults do not get enough sleep. In that statistic, some 35% of employed respondents reported they did not get enough sleep. — [2] Centers for Disease Control and Prevention

What could be the cause of this and how does it affect the average worker and their employer?

Sleep Deprivation and Insomnia Costs for Employers

“On an average day in 2017, 24 percent of full-time employed workers spent some time working while at home. The share of full-time employed workers performing work at home rose from 18 percent per day in 2003 to 24 percent in 2009, and remained relatively flat from 2009 to 2017.”


[3] Bureau of Labor and Statistics

“People spend an average of 4.5 hours doing work at home each week, with 20 percent spending 10 or more hours working at home. This could represent a cycle in which people are less productive at work because they're tired, so they bring work home, only to have it interfere with their sleep.”


[4] National Sleep Foundation

“A study of 7,428 participants concluded that sleep deprivation and insomnia cost employers $2,280 annually per employee.”


[5] National Center for Biotechnology Information

Accidents and Work-Related Injuries

As people forgo sleep they experience a drop in cognitive abilities. This can affect mood, memory, attention, performance, and more. Throughout history, lack of sleep has helped lead to several serious workplace accidents. The following occurred due in part to human error and have been linked to possible sleep deprivation.

Icon Nuclear Plant

1979

Three Mile Island
“Although a mechanical problem precipitated the incident, it was chiefly this human error of omission and the subsequent flawed corrective action that caused the near meltdown of the reactor later that morning.”


[6] Dr. Merrill Mitler, Scripps Clinic Sleep

“The nuclear plant disaster at Chernobyl, which took place at 1:30 a.m., is also linked to human error influenced by sleepiness.”


[7] National Sleep Foundation

Nuclear Bomb Icon

1986

Chernobyl
Rocket Icon

1986

The Challenger Explosion

“The recent report of the Presidential Commission on the Space Shuttle Challenger Accident did cite the contribution of human error and poor judgment related to sleep loss and shift work during the early morning hours.”


[6] Dr. Merrill Mitler, Scripps Clinic Sleep

“We've looked at some of the literature on the Exxon Valdez and of course the main point is that the timing of the accident was consistent with a sleep-related or fatigue-related error.”


[8] Dr. Merrill Mitler, Scripps Clinic Sleep Disorders Center

Ship Icon

1989

Exxon Valdez Oil Spill
Airplane Icon

1999

American Airlines Flight 1420

“Contributing to the accident were the flight crew's impaired performance resulting from fatigue and the situational stress associated with the intent to land under the circumstances…”


[9] U.S. Department of Transportation

Too big to depict on a timeline are the hundreds of lives lost every year due to smaller scale vehicular, medical, and factory related accidents caused by sleep deprivation.

“Dr. Charles Czeisler of the Division of Sleep Medicine at Harvard Medical School found that hospitals could reduce the number of medical errors by as much as 36 percent by limiting an individual doctor’s work shifts to 16 hours and reducing the total work schedule to no more than 80 hours per week.” — [10] Healthy Sleep

Health Risks

Most of the time sleep deprivation will not cost the lives of others. The greater risk could be at your own expense. Rand.org reports that sleep deprivation increases the risk of mortality by 13 percent. The following are only a few of the most serious conditions caused by sleep deprivation.

Doctor Checking Patient Illustration

Heart Problems

“People who don't sleep enough are at higher risk for cardiovascular disease and coronary heart disease — regardless of age, weight, smoking and exercise habits.”


[11] National Sleep Foundation

Diabetes

“The study demonstrated an association between habitual short nocturnal sleep with Type Two Diabetes Mellitus when compared to healthy controls.”


[12] Dr. Mohammed A. Al-Abr, Department of Clinical Physiology, Sultan Qaboos University Hospital

Obesity

“Laboratory studies and multiple epidemiological studies have linked short-sleep duration and poor-sleep quality to obesity risk.”


[13] Dr. Guglielmo Beccuti and Dr. Silvana Pannain

Stroke

“Sleep duration has a significant impact on stroke risk factors. While there appears to be an association between sleep duration and stroke risk factors such as hypertension, diabetes mellitus, obesity, dyslipidemia, and AF, the underlying pathophysiological mechanism remains unclear.”


[14] Dr. Chun Seng Phua, Department of Medicine, Melbourne Clinical School

Depression

“In conclusion, chronic sleep deprivation rather than acute sleep loss may lead to depression that is potentially attributable to the neurochemical changes that occur in the brain. On the other hand, depression may lead to disturbed sleep which could manifest as a symptom of a mood disorder.”


[15] Dr. Mohammed A. Al-Abr, Department of Clinical Physiology, Sultan Qaboos University Hospital

Direct and Indirect Costs for Employers

DIRECT
Productivity Icon
Less productive employees

“A 2008 Sleep in America® poll found that 29 percent of people said they had fallen asleep or became very sleepy at work in the previous month, and 12 percent were late to work in the last month because of sleepiness.” — [4] National Sleep Foundation

Time Icon

Time

“Sleep deprivation… leads to the U.S. losing around 1.2 million working days a year.” — [16] Rand

INDIRECT
Coffee Icon

Coffee

“For 1 in 2 workers, a regular caffeine fix is essential to their work routine” — says Mary Lorenz from CareerBuilder. Many offices provide coffee for their employees. Therefore, if workers were to get better sleep the amount of coffee an employer provides would likely diminish.

Power Icon

Power and resources

“On average, a U.S. office building spends nearly 29 percent of its operating expenses on utilities, and the majority of this expenditure goes toward electricity
and natural gas.” — [17] Madison Gas and Electric

 

Many workers try to compensate for lost sleep by staying in the office late. This can require employers to leave amenities on past hours, costing companies hundreds to thousands of dollars.

Nuclear Bomb Icon

Accidents

“These proportions are higher than for any other chronic condition, with annualized US population projections of 274,000 costly insomnia-related workplace accidents and errors having a combined value of US $31.1 billion.” — [18] National Center for Biotechnology Information

Direct and Indirect Costs for Employees

Workers end up shelling out a good deal of their own money to fight insomnia and other sleep-related disorders. Although not all of these statistics are directly related to lack of sleep, they are pretty telling as to how much sleep deprivation can cost individuals and families.
DIRECT
Coffee Icon White Background

Stimulants

“As a point of reference, the average American spends about $1,100 a year on coffee.” — [17] Madison Gas and Electric

Time Icon White Background

Time

“The global market for sleep aids and technologies is expected to reach $84.9 billion by 2021 from $66.3 billion in 2016, rising at a compound annual growth rate (CAGR) of 5.1% from 2016 through 2021.” — [19] Natana Raj, BCC Medical Analyst

INDIRECT
Heart Icon White Background
Heart Disease

“By 2030, annual direct medical costs associated with cardiovascular diseases are projected to rise to more than $818 billion” — [20] Centers for Disease Control and Prevention Foundation

Obesity Icon
Obesity

“The medical care costs of obesity in the United States are high. In 2008 dollars, these costs were estimated to be $147 billion.” — [21] Centers for Disease Control and Prevention

Diabetes Icon
Diabetes

“According to the American Diabetes Association’s Economic Costs of Diabetes in the U.S. in 2017, the average medical expenditure for people with diagnosed diabetes is about $16,750 per year, of which about $9,600 is due to diabetes.” — [22] Centers for Disease Control and Prevention

Socio-economic Impact

Economic status has been known to affect how much sleep people get. Workers in lower-income families tend to sleep less than middle and upper class. Work conditions like low wages and graveyard shifts, among other factors, likely produce this statistic.

 

A study done by the 2013 National Health Interview Survey, displays the percentage of low-income families who get fewer than 6 hours of sleep each night.

% of Adults Who Get ≤6 Hours of Sleep
Percentage of Adults Who Have Average Less than 6 Hours of Sleep

Source: “National Health Interview Survey, United States, 2013”
[23] Centers for Disease Control and Prevention

What Can We Do?

One Japanese company, Crazy INC, is fighting the problem by paying their employees with cafeteria points to get at least 6 hours of sleep each night, five days a week. This is worth $540 a year. — [24] PayScale

Aetna is another company that is paying its employees to get sufficient rest. The brand’s CEO and chairman, Mark Bertolini, said they are willing to pay their workers up to 500 dollars a year to get enough sleep. — [25] CNBC

Illustration of Dreaming About Money

Not all companies need to pay their employees to get rest. The Centers for Disease Control and Prevention recommends the following.

Employers can consider adjusting work schedules to allow their workers time to get enough sleep.

Employers can also educate their shift workers about how to improve their sleep.

Encouraging employees to get healthy sleep could pay off in the long run. As they get more sleep, they are more likely to come to work and crush it.

Conclusion – More Sleep Means Increased Productivity

Here’s the bottom line: Better Sleep = More Money

If corporations want to make more money, they could begin by encouraging good sleep practices around the workplace. RAND pointed out that if workers could increase their sleep by just an hour, moving from 6 to 7 hours of rest, this could improve the U.S economy by 224.6 billion dollars.

Go Home and Get More Sleep

And it is not only the corporations who benefit. Economists Matthew Gibson and Jeffrey Shrader found that folks who get enough sleep could increase their earning potential by up to 4.5%. — [26] Jeffrey Shrader

So, here is our challenge to you. If you are in charge of a group of workers, share this info and teach good sleep practices. Then go and practice what you preach.

 

If you are an employee or work for yourself, go to bed tonight and do what you can do get between 7 and 8 hours of sleep. As we’ve learned, sleep can equal significant savings and earnings.

 

Work smarter, not harder by getting off on the right foot – a good night’s rest!


[2] 1 in 3 adults don’t get enough sleep, Centers for Disease Control and Prevention

[3] American Time Use Survey Summary, Bureau of Labor Statistics



[6] Catastrophes, Sleep, and Public Policy: Consensus Report, National Center for Biotechnology Information





[11] How Sleep Deprivation Affects Your Heart, National Sleep Foundation


[13] Relationship between Sleep Duration and Risk Factors for Stroke, National Center for Biotechnology Information

[14] Sleep and obesity, National Center for Biotechnology Information

[15] Sleep Deprivation and Depression, A bi-directional association, National Center for Biotechnology Information


[17] Managing energy costs in office buildings, Madison Gas and Electric




[21] Adult Obesity Causes & Consequences, Centers for Disease Control and Prevention

[22] Calculate What Diabetes Costs Your Business, Centers for Disease Control and Prevention



Pin It on Pinterest

The Sleep Advisor