Employee Burnout Is a Multi-Million Dollar Hidden Cost For Employers, According to New Research An employee who experiences burnout costs their employer up to $21,000.
By Sherin Shibu Edited by Melissa Malamut
Key Takeaways
- Burnout is a state of disengagement and exhaustion due to stress.
- According to a new study from the CUNY Graduate School of Public Health and Health Policy, burnout can cost employers up to $5 million per year in lost productivity, like missed workdays.
Feeling tired, drained, and overwhelmed because of your job? You could be experiencing burnout, a state of exhaustion and disengagement brought about by ongoing stress, according to Mayo Clinic.
While burnout can take a toll on an individual's health, potentially leading to problems like heart disease and insomnia, it can also have ill effects on the financial health of an organization.
A new study published in the American Journal of Preventative Medicine earlier this year found that employee burnout in the U.S. costs companies between $4,000 to $21,000 for each worker per year in productivity, or missed workdays and reduced work.
More specifically, burnout costs employers an average of around $4,000 for nonmanagerial employees, around $10,000 for managers, and over $20,000 for executives. In an organization with 1,000 employees, about 88% nonmanagerial, 10% managers, and 2% executives, burnout can cost about $5 million per year provided everyone experiences it.
Related: Burnout Is Not Preventable — Here's How to Address Its Underlying Cause Instead
"Our model quantifies how much employee burnout is hitting the bottom line of companies and organizations," stated Bruce Y. Lee, the senior author of the study and CUNY Graduate School of Public Health and Health Policy professor, in a press release. "Therefore, it can give companies and organizations a better idea of how focusing more on employee well-being could help decrease costs and increase profits."
A study used a computational model created by the Public Health Informatics, Computational, and Operations Research team at the CUNY that simulates an employee moving through different stages of engagement at work, from active participation to overextended to burnout. As the simulation progresses, the employee faces different workplace stressors, like an increased workload or long hours, that lead to burnout. When an employee is in a state of burnout, they have limited productivity levels.
Related: There's a Burnout Crisis in American Workplaces — and This Is the Solution
The team ran the model and found that burnout costs employers up to 2.9 times more than the average cost of providing health insurance and up to 17.1 times more than providing employer training.
According to an April 2024 SHRM Employee Mental Health study, 44% of workers in the U.S. reported feeling burned out. The American Psychological Association found that common reasons for burnout include lack of support, lack of recognition or rewards, overwhelming workloads, long hours, and toxic interpersonal relationships.
How Can Employees and Employers Fight Burnout?
Signs of burnout include declining performance, missed deadlines, and more errors in an employee's work, per Harvard Business Review.
To combat burnout, employees can reduce their exposure to job stressors, prioritize self-care, and find meaningful connections in the workplace.
On the employer side, the study's authors suggested that employers prevent burnout by offering mental health benefits and properly distributing employee workloads.
Companies can offer flexible work arrangements, give stress management workshops, and provide opportunities for professional development, according to workplace conflict resolution consulting firm Pollack.
Related: Renowned Psychologist Adam Grant Says This 3-Step Leadership Method Will Help Fight Employee Burnout
