Addressing Burnout: The Costs & Targeted Solutions

Many companies are reviewing their employee benefits at this time of year. Examining how effective they are in addressing employee burnout can result in cost savings for your organization. The reality is that burnout is impacting businesses, both large and small. McKinsey Health Institute found that one in four employees globally report experiencing symptoms of burnout. Moreover, the study highlighted a 22% gap between employer and employee perceptions of well-being at work and identified a strong correlation between toxic work cultures and burnout.

The Mayo clinic defines job burnout as “a special type of work-related stress — a state of physical or emotional exhaustion that also involves a sense of reduced accomplishment and loss of personal identity.” If we think about it, most of us have experienced physical and/or emotional exhaustion at some point in our career. We know it has an impact on how we show up at work. It can be caused by personal challenges with no ability to address or the perception that there is no support. It can also be caused by a work culture that is not designed to help employees stay resilient and engaged.

It's not surprising to any HR leader that employee burnout negatively impacts workforce retention – and turnover is very costly for businesses. According to Gallup data, if an employee’s salary is $50,000, Gallup calculates the replacement cost between $25,000 and $100,000 per employee. That means that replacing an entry-level agent at $35,000 could cost $17,500. That’s just one employee. In an organization with 10,000 employees, where 15% of them suffer from burnout, the expense of such neglect can amount to over $26 million annually. But it’s also important to understand that burnout cost isn’t just limited to turnover.

A reduction in employee engagement and motivation directly result in lower productivity. It means more miscommunication and more mistakes that can cost companies in the long-term. The financial impact of poor work engagement in the United States alone is estimated to be $550B annually according to Hubspot.

Clearly companies have a business case and a financial reason for finding ways to reduce burnout. A 2023 AFLAC survey revealed that Forty-six percent of workers indicated that their mental health has negatively impacted their product output, while 51% of employers surveyed reported their companies had been affected by their employees’ deteriorating mental health.

What Your Company Can Do

Mental Health and Well-being

A good EAP, with the right communication and marketing to employees, can be helpful. Typically, EAPs do not get the engagement employers would like to see. Your company is paying for this benefit. Take a look at what percentage of your workforce is using your EAP. If it is lower than 5%:

• Do some internal surveying to find out if there is a lack of knowledge about the benefit
• Get some feedback from leaders at all levels as to whether or not there is a perceived bias around getting mental health support
• Review the EAP provider to see if it is a good fit for your organization and if they have delivered the service as promised

Physical Health and Well-being

Science has proven that regular movement offsets stress and helps build a strong immune system. It also helps with staying focused and creative problem solving. How is your organization keeping people moving, particularly those in desk jobs? This doesn’t have to mean everyone is running a half-marathon or even going to the gym. Here are some questions to ask about your work culture:

• Are people in management positions visibly role modeling for their teams? 
• Are people in leadership positions consistently eating lunch at their desks?   
• Are walking meetings encouraged? 
• Is there a tendency to schedule back-to-back meetings on a regular basis?

By addressing these issues, and getting management at all levels involved, incremental change can happen to promote a more active workforce.

Burnout is also related to issues like inclusion and micro-aggressions.  Often training around these topics is about what not to do.  

• Consider a focus on getting more curious about why there is an inclusion issue. 
• Get feedback about these trainings to see if employees think they have a positive impact or if they think they are a waste of time. Just doing a training doesn’t mean it has solved the problem.    
• It becomes an even bigger burnout issue if there are DE&I, sexual harassment trainings, or anything related to gender equity and there is no measurable change in the working environment. It comes across as lip service versus a commitment to creating a working environment where everyone can thrive and contribute.

These are just a few of the things a company can focus on to better address burnout. Trainings and employees benefits should be a key tool in addressing the costs of burnout. If that is not happening in your organization, it’s time to evaluate and look for more impactful and measurable solutions.