The Hidden Costs of Employee Burnout & How to Prevent It

Employee burnout—We’ve all heard this phrase before, but few understand the true extent of its impact in the corporate world.

With one in four employees experiencing symptoms of burnout, it’s clear that this issue affects workers across all industries and demographics. From an employer’s perspective, burnout goes way beyond fatigue, having a number of hidden costs that affect their organization.

To address this global issue, there are two things we have to do: recognize the hidden costs of employee burnout and discuss strategies for improving corporate health.

Hidden Costs of Employee Burnout

As an employer, it’s in your best interest to maintain a healthy and happy work environment. Not only because you care about your workers, but because there are many consequences of employee burnout, including:

Increased Medical Expenses

Medical expenses are one of the most direct costs associated with employee burnout. There are various ways burnout affects an individual’s health. 

To start, chronic stress has been linked to a number of health conditions, such as cardiovascular disease, muscle tension and pain, depression, and anxiety, among others. Even more, employees experiencing burnout are more likely to make mistakes, which can lead to serious injuries in high-risk industries.

In addition to increased medical claims, businesses also have to consider the impact of absenteeism caused by these conditions, as we’ll see below.

Increased Absenteeism

The Centers for Disease Control and Prevention reports that productivity losses linked to absenteeism cost employers $225.8 billion annually in the United States, or $1,685 per employee.

While there are various reasons why employees miss work, burnout is one of them. Whether your employee misses work due to medical reasons or mental health concerns such as stress, one thing is clear: absenteeism is a major concern for companies, leading to decreased productivity, disrupted workflows, and increased workload on remaining workers.

Lower Productivity and Performance

When a worker is physically and mentally exhausted, it can lead to difficulty with concentration, decision-making, and memory retention. In other words, burnout and productivity are closely related, leading to decreased efficiency, reduced employee engagement, and lower quality of work.

Dennis P. Stolle, JD, PhD, APA’s senior director of applied psychology, comments on this: “When workers are suffering from burnout, their productivity drops, and they may become less innovative and more likely to make errors. If this spreads throughout an organization, it can have a serious negative impact on productivity, service quality, and the bottom-line.”

Higher Turnover

Employees experiencing high levels of burnout are more likely to look for new opportunities with better working conditions. 

That said, high turnover rates can have a long-lasting impact on companies, resulting in project delays, damaged company reputation, and increased costs associated with hiring and training new employees. Losing top talent can also affect your company’s competitive advantage and growth potential.

How to Prevent Burnout

Now that we know the long-term impact of employee burnout, the next question is: How do we prevent it?

Here are 5 strategies that your company can implement:

Monitor Workload

Employees who are overworked are more likely to be stressed out, exhausted, and in turn, burned out. That said, the first line of defense should be monitoring your employees’ workload.

This includes setting realistic workloads and expectations, providing the necessary resources and support to accomplish them, and performing assessments to ensure tasks are manageable. This also includes monitoring their schedules and hours worked; for instance, working 12-hour days for weeks at a time without a break is a recipe for disaster when it comes to employee well-being.

Prioritize Mental Health

Did you know that twelve billion working days are lost every year to depression and anxiety alone?

Workers who are psychologically healthy tend to be more motivated and productive, highlighting the need for more proactive mental health resources in the workplace. You can achieve this by offering counseling services, stress management workshops, and additional support for mental health concerns.

Companies should also do their part to fight the stigma surrounding mental health, which can be done by educating staff on its importance, encouraging employees to seek help, and openly discussing mental health.

Promote a Healthy Work-Life Balance

Maintaining a healthy work-life balance helps improve your workers’ mental and physical health, as they can focus on relaxing, enjoying their hobbies, and working on personal growth.

While you can’t control what your workers do in their free time, there are ways to encourage a healthy work-life balance, such as discouraging communication after work hours, encouraging time off, insisting on breaks, and ensuring they have a manageable workload.

Train Managers to Recognize Signs of Burnout

All managers should be trained to recognize the signs of burnout, which may include fatigue, decreased productivity, and difficulty concentrating. If your company has high turnover rates, it’s also worth investigating the cause, as it may be due to burnout or other internal reasons worth addressing.

By resolving these issues early on, your team can take a proactive approach to burnout, thereby reducing its consequences.

Encourage Open Communication

Open communication improves productivity, reduces stress, and creates a trusting environment that enhances employee satisfaction.

Not only does this foster a happier work environment, but it helps employers address issues before they escalate. For instance, individuals who feel comfortable talking to their colleagues and team leaders can provide feedback, express concerns regarding workload, and discuss mental health challenges.

You can achieve this by encouraging feedback, making time for regular one-on-ones with employees, and creating a safe space for communication.

Final Thoughts

Whether you’re worried about your employees’ productivity, their overall well-being, or their medical expenses—or all the above—your company should be aware of the signs of burnout.

By creating a healthy work environment, you can keep your workers happy, enhance your brand reputation, and reduce costs associated with burnout. As discussed in this article, some of the strategies you can implement to achieve this include providing mental health resources, promoting a healthy work-life balance, and encouraging open communication.

So, ask yourself: are you doing everything you can to reduce burnout? How can you create a more enjoyable work environment?