The cost of burnout for employers

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• The three main costs of employee burnout to a company are decreased productivity, increased levels of absenteeism, and higher staff turnover.
• An employee with poor mental health costs their employer an average of £2,646 per year.
• One report suggests 52% of workers feel burned out — data gathered by Spill found that 79% often felt close to burnout at work.
• By looking after employee mental health it's possible to reduce the financial cost of burnout: flexible working, regular breaks, employee therapy, and policies that address work-life balance are all a few ideas.

Burnout could be costing UK businesses over £700m every single year, thanks to workers calling in sick with signs of stress and exhaustion. While absenteeism is a relatively conspicuous sign that your team is overdoing it (or doing exactly the amount expected of them but without the right support), it’s just one symptom of a struggling workforce – and one that’s only easy to spot once the damage to your team’s health has already been done.

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Some of the main costs that companies may experience due to burnout include:

• Increased absenteeism: Burnout can lead to increased absenteeism as employees may need to take time off to deal with stress and exhaustion.
• Decreased productivity: Burnout can cause employees to lose motivation, which can lead to a drop in productivity. This can have a significant impact on a company's bottom line.
• Increased healthcare costs: Burnout can also lead to physical and mental health problems, which can result in increased healthcare costs for both employees and employers.
• High turnover rates: Burnout can cause employees to leave their jobs, which can lead to high turnover rates and additional costs for recruiting and training new employees.
• Negative impact on company culture: Burnout can also have a negative impact on company culture, leading to low morale and a lack of engagement among employees.
• Reputation damage: Burnout can also damage an employer's reputation, particularly if they are perceived as being unsupportive or indifferent to the wellbeing of employees.

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Let's explore some of the main costs resulting from employee burnout in a little more detail...

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The 3 main costs of employee burnout

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Burnout is a kind of emotional exhaustion caused by chronic stress in the workplace. It can affect workers in different ways, but it amounts to feeling hopeless or overwhelmed in situations that you would have been able to handle with ease before. With classic symptoms like fatigue, negativity and ineffectiveness, the human costs of burnout are painfully clear. But from a business perspective, what’s the damage?

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1. Lost productivity is a cost of burnout 🐢

How does employee burnout affect productivity? Someone suffering from burnout simply doesn’t have the energy or the motivation to perform at their best, or their speediest. Unavoidably, some work will be left untouched.

Burnt-out workers will find it harder to concentrate and communicate with their team, and they’re likely to feel mentally distracted all day, every day. They may be running on little sleep, and innovation will also take a backseat. When your brain is running in survival mode, there’s no space for creativity. Which is especially problematic for professional creative types.

Showing up to work but not being able to perform at full capacity is known as presenteeism, and Deloitte estimates that mental health-related presenteeism cost UK employers between £24-£28 billion in 2021 alone. 

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2. Days off are a cost of burnout 📅

Sick leave due to poor mental health was the top cause of time off work in the UK in 2021. And according to a 2022 study by MetLife, more than 40% of workers have called in sick due to feeling exhausted, stressed, or overwhelmed.

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When employees experience burnout, they may be more likely to take sick leave in order to cope with their physical and emotional symptoms. This can result in increased costs for employers if they need to hire temporary resource to cover the absent employee's workload.

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3. Staff turnover is a cost of burnout 👋

61% of people who have recently left or are actively planning to leave their jobs cite mental health as a reason. And the cost of replacing valuable team members really adds up – from recruitment costs to training and negotiating a new recruit’s salary, you can expect to pay around 20% of a worker’s salary to replace them, if they’re in a mid-range position.