Exposing the Real Price of Employee Burnout in Your Business

Written by Maliha Khan

January 23, 2024

Stress-related health care and missed work are costing employers as much as $300 billion per year.

Undoubtedly, that’s a staggering figure, but have you paused to consider what portion of that sum could be directly impacting your company’s bottom line? Here’s where the economics of burnout can get a bit complex. Bear with us, we’re about to delve into some illuminating, albeit concerning, calculations.
Let’s start with a simple fact. Employee burnout doesn’t just deprive your organization of productivity, but it also incurs significant financial costs due to increased health care expenses. It’s crucial to understand how these expenses come into play and the role they have in the unfortunate cycle of burnout.
To break it down, when employees are frequently stressed, they are more prone to developing chronic physical conditions such as heart disease, diabetes, and a weakened immune system. Not to mention the mental health impact, including anxiety and depression. The concurrent increase in medical appointments, sickness absences, and perhaps even more expensive procedures adds a hefty inflation to your company’s health care bill.

Understanding Employee Burnout: Defining the Terms

Let’s delve deeper into the meaning of burnout. At its core, it’s a reaction to long-term stress marked by emotional exhaustion, cynicism, and a feeling of reduced personal accomplishment. Burnout isn’t just about being tired – it’s a state of chronic physical and emotional depletion. It includes cynicism and detachment, feelings of ineffectiveness, and lack of accomplishment. But what does this really mean?

  • Emotional exhaustion: This is the feeling of being emotionally overextended, drained and depleted. It’s a feeling of being ‘run down’ or ‘at the end of one’s rope’.
  • Cynicism and detachment: Employees may feel disconnected from their job and start experiencing a loss of enjoyment in many, if not most aspects of their work. They might start distancing themselves emotionally and cognitively from their duties.
  • Feelings of ineffectiveness and lack of accomplishment: Workers might feel as if they are not achieving anything worthwhile at work, their job performance is less than satisfactory, or that their work doesn’t have any value.

Burnout is a gradual process. It doesn’t happen overnight, but it can creep up on you. The signs and symptoms are subtle at first, but become worse as time goes on. Think of the early symptoms as red flags that something is wrong that needs to be addressed. If you pay attention and actively reduce your stress, you can prevent a major breakdown. If you ignore them, you’ll eventually burn out.

Symptoms of Burnout

Examples

Physical and Emotional Exhaustion

Chronic fatigue, insomnia, forgetfulness, physical symptoms (chest pain, heart palpitations, shortness of breath, gastrointestinal pain, dizziness, fainting, or headaches), increased illness, loss of appetite, anxiety, depression, anger.

Cynicism and Detachment

Loss of enjoyment, pessimism, isolation, detachment, increased irritability, loss of concentration.

Ineffectiveness and Lack of Accomplishment

Feeling of apathy and hopelessness, increased irritability, lack of productivity and poor performance.

Remember, recognizing the symptoms early can help prevent a full-on burnout, so it’s important to keep a watchful eye on changes in behavior and mood. You got this!

Tell-Tale Signs of Employee Burnout in the Workplace

Now, you’re familiar with what burnout is, but the real question – how do you identify it in your employees? We’re here to help navigate that complicated territory. Here are some of the common signal flags that might mean an employee is experiencing burnout in the workplace:

  • Lack of enthusiasm or persistence: If you notice an employee who was once motivated, now displaying hesitation, reluctance or indifference, it’s a clear sign something is amiss.
  • Decreased productivity: An obvious effect of burnout is reduced efficiency and work output, not to be confused with periodic slumps that everyone experiences.
  • Chronic fatigue: Does your employee often report feeling tired or out of energy? This could be a manifestation of burnout.
  • Increased mistakes: Undue stress and burnout greatly affect one’s ability to concentrate, which often leads to increased errors and mistakes in work tasks.
  • Issues with team interaction: An employee with burnout may display signs of isolation, withdrawal and trouble with interpersonal relationships at work. 

While these indicators can be concerning, it’s important to remember that an employee exhibiting these behaviors might be dealing with other issues. It’s always important to engage the employee in a constructive, sensitive conversation to understand their perspective better and to express your concern for their well-being.

Factors that Contribute to Burnout

But what causes employee burnout? It’s often a culmination of several factors. Here is a brief list of some of the most common contributors:

  • Unmanageable workloads: When employees are overloaded with work—when expectations outweigh support—it leads to undue stress and can ultimately result in burnout.
  • Lack of support: A feeling of lack of recognition, support or understanding from supervisors and colleagues can contribute to employee burnout.
  • Work-life imbalance: If work consistently robs an employee of personal and family time, this leads to an imbalance that can induce burnout.
  • Unclear job expectations: When employees are unclear on what’s expected of them, it creates a chronic stress state which can lead to burnout.
  • High-pressure environments: Long-term exposure to a high-intensity, high-pressure work environment can make the workplace a breeding ground for burnout.

The prevention of burnout begins with recognition. Once you are aware of these signs, you start to have the necessary tools to address it and implement supportive measures to alleviate its impact in your company.

Calculating the Financial Impact of Employee Burnout

    Understanding the financial impact of employee burnout is essential for creating a supportive and productive work culture. It may be tempting to overlook the impact of burnout as an intangible, but its tangible implications are potent and significant. Lost productivity, high turnover rates, and increased healthcare costs combine to create a substantial financial burden.
    Indeed, your bottom line may be eroding before your eyes, and it’s crucial to determine how.
    Here are some key factors you should look into:

    • Lost productivity: Burnout often leads to decreased productivity. Absenteeism, low energy levels and lack of motivation among burned out employees can severely hamper work outputs.
    • High turnover rates: Burnout is a common reason for employees calling it quits. The process of hiring new employees and training them can be time-consuming and pricey, to say the least.
    • Inflated healthcare costs: Persistent stress and burnout can lead to physical and mental health issues, causing a substantial rise in healthcare costs.

    Now, to quantify these costs is tricky, but doing so can give you the detailed insight needed to tackle them. Let’s try to break it down:

    • Tangible Costs: These are costs that you can readily quantify. Think along the lines of productivity loss due to absence or underperformance. If a burned-out employee starts taking more sick days, those are days they aren’t working and directly costing your company money. Or perhaps they’re still showing up, but their performance is deteriorating, leading to missed deadlines, sloppy work, or dissatisfied customers.
    • Intangible Costs: The less visible but equally debilitating costs are ones harder to measure. The impact on morale, team dynamics, and company culture can be vast. If one employee is experiencing burnout, it’s likely to affect those around them, creating a productivity-dampening domino effect. Plus, burnout often leads to higher turnover rates, which means increased costs related to recruiting, hiring and training new employees.
      Assessing the financial implications of these harder-to-quantify costs can be challenging, but don’t underestimate them. According to a Gallup study, turnover costs due to burnout can range from 20% to 200% of an employee’s annual salary.

    Let’s look at an example:

    Cost Type

    Cost Amount

    Tangible (Productivity loss, missed work)

    $10,000

    Intangible (Reduced morale, turnover)

    $20,000

    Total

    $30,000

    While this is a simplified example, it illustrates how the costs can pile up. And remember, these are only the costs for one employee. Imagine what could happen if burnout were to become widespread within your company.

    Preventing burnout is not only beneficial to your employees’ well-being; it’s a smart financial decision for your company overall. Recognizing the true cost of burnout allows you to make proactive changes that enhance employee happiness, increase productivity, and ultimately, boost your bottom line.

    Crisis Intervention: What to Do When Burnout Strikes

      When it comes to handling employee burnout, being proactive is essential. By the time full-blown burnout manifests, both the employee and the company have already paid a steep price.

      However, when burnout signals are evident, it’s crucial to step in and help your team regain their balance. Here’s a roadmap to crisis intervention you can use to keep your staff healthy, your work environment happy, and your company’s bottom line strong:

      Note: Every crisis intervention strategy needs to be tailored to the individual and the specific workplace circumstances. While the below steps offer a broad blueprint, they are not a comprehensive solution and may need adjusting to fit your unique situation.

      1. Identify the problem: Acknowledge that there’s a burnout issue afflicting your workplace. Understanding and accepting the problem is the first important step to solving it.
      2. Open communication channels: Encourage open dialogue about work stress. Make sure your employees know that they are safe to speak up about their work-related issues and that their concerns will not only be heard, but also addressed.
      3. Provide professional support: If an employee is at a high risk of burnout, consider offering them professional psychological support. Having an empathetic professional to discuss their feelings with can go a long way to relieve the pressure and help resolve the issues causing burnout.
      4. Offer reasonable adjustments: When necessary, stock the employee’s workload or offer them more flexible working hours. That could also include giving them a leave of absence to fully recover from burnout, if needed.
      5. Preventative measures: Instigate workplace procedures that promote work-life balance and prevent future instances of burnout. Our LVL platform has resources specifically dedicated to burnout and helping employees find a sustainable work-life balance. This might include mandatory vacation, encouraging regular breaks, promoting a supportive work environment, and implementing workload management techniques.

      Remember that an ‘ounce of prevention is truly worth a pound of cure’ when it comes to burnout. To check in on your company’s overall health, we offer a free consultation call with our Wellness Specialist! Schedule your free call with us now:

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