Dive Brief:
- Employee burnout costs employers anywhere from $4,000 to $21,000 per employee every year, according to a study published in the American Journal of Preventive Medicine.
- Using a computational model, the researchers found that burnout costs employers an average of $3,999 for an hourly nonmanager; $4,257 for a salaried nonmanager; $10,824 for a manager; and $20,683 for an executive. For 1,000-person companies with a typical employee distribution, that’s an estimated $5.04 million cost to employers annually.
- “Burnout is pervasive and it’s costing organizations millions each year,” Molly Kern, professor at the Zicklin School of Business at Baruch College and co-author of the study, said in a statement. “Organizational leaders need to consider how their cultures and benefits programs support the 60% of employees silently struggling with burnout.”
Dive Insight:
Researchers took on the study “to quantify the burden of disengagement and burnout among different employee types.” They determined that the problem can cost companies 0.2−2.9 times the average cost of health insurance and 3.3−17.1 times the cost of training per employee.
“Our model quantifies how much employee burnout is hitting the bottom line of companies and organizations,” Bruce Lee, CUNY Graduate School of Public Health and Health Policy professor and senior author of study, said in a statement. “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.”
There are programs to address burnout — such as counseling, professional skill training, cognitive behavioral therapy and adaptive coping — that can be more effective long term if implemented at the organizational level, but employers may be wary to try them on a large scale, researchers said.
“The costs of such programs may dissuade an employer from prioritizing and implementing them unless the employer knows what costs and negative employee health effects can be prevented by reducing burnout,” per the study.
Managers, in particular, appear to be experiencing high levels of burnout, reports have shown.
A growing level of manager burnout is one of the biggest workplace challenges employers will have to face this year, according to recent survey results from Top Workplaces, an employer recognition program, and its technology platform, Energage.
Roughly 4 in 10 leaders who are stressed have thought about leaving their leadership roles to improve their well-being, DDI’s Global Leadership Forecast 2025 found.
