The cost of employee burnout
VIWELL team
Last updated January 6, 2025
VIWELL helps you elevate your workplace well-being.
Employee burnout is no longer just an individual issue—it’s a financial crisis for businesses. The toll of burnout extends beyond lower morale and disengaged employees. From lost productivity and absenteeism to high turnover and escalating healthcare costs, burnout significantly impacts a company's bottom line. In fact, a report by Workhuman estimates that burnout costs businesses $322 billion globally each year.
Burnout doesn’t happen overnight. It starts small—intensifying stress, exhaustion, and disengagement—until it becomes a major issue that affects individuals and entire teams. But how do you spot burnout before it spirals out of control? And what steps can HR teams take to reduce its impact?
In this article, we’ll explore the hidden costs of burnout, how to recognize it early, and practical steps HR teams can take to prevent burnout before it derails productivity and employee well-being. Plus, we’ll provide a Mental Health Checklist for Managers to help identify burnout symptoms in your team.
The cost of burnout for employers
Decreased productivity
Burnout isn’t just a human issue—it’s costing businesses billions. In the U.S. alone, $300 billion is lost annually due to absenteeism, reduced productivity, and stress-related accidents (American Institute of Stress). The World Health Organization estimates that mental health challenges cost the global economy $1 trillion in lost productivity each year. Burnout leads to disengagement, making it harder for employees to stay focused, meet deadlines, or contribute creative ideas—ultimately hurting your company’s performance.
High turnover rates
Employees experiencing burnout are much more likely to leave in search of a healthier work environment. 61% of workers cite mental health issues as a key factor in their decision to leave their jobs (Gallup). This results in increased turnover rates, along with the high costs of recruiting, hiring, and training new employees. The financial impact is staggering, with employee turnover due to burnout costing 213% of the lost employee’s salary (Harvard Business Review).
Increased healthcare costs
Burnout has serious long-term health implications. Chronic stress can lead to physical and mental health problems, driving up healthcare expenses. Estimates show burnout contributes between $125 billion to $190 billion in healthcare costs annually (American Psychological Association). These costs extend to employers, increasing insurance premiums and overall medical expenses.
Stagnated company growth
As burnout spreads, employee engagement drops, and innovation slows. Disengaged employees are less likely to contribute new ideas or actively participate in meetings. This lack of creativity can stall company growth, making it harder for the business to adapt, innovate, and stay competitive.
The costs of burnout for employees
Health implications
The toll of burnout on employees is profound. Chronic stress leads to anxiety, depression, and physical health problems like high blood pressure, heart disease, and chronic fatigue. Employees struggle not only at work but also in their personal lives, which exacerbates the overall impact of burnout.
Strained relationships
Burnout often spills over into employees' personal lives. The emotional exhaustion caused by burnout makes it difficult for employees to connect with family and friends. As relationships become strained, employees may feel increasingly isolated and disconnected, adding to the emotional burden of burnout.
Warning signs of employee burnout
Burnout doesn't just appear overnight. It shows up in both obvious and subtle ways, and if left unchecked, the cost can escalate quickly. Here are the key signs to watch for:
Behavioral indicators:
Decreased productivity and quality of work: Employees may miss deadlines and deliver lower-quality work than usual.
Withdrawal from responsibilities: Burned-out employees tend to disengage, avoiding tasks and withdrawing from team activities.
Increased procrastination and mistakes: As motivation wanes, employees may make more errors and delay tasks.
Emotional and physical symptoms:
Chronic fatigue: Constant tiredness can affect both work performance and life outside of work.
Headaches and physical exhaustion: Tension headaches or unexplained fatigue are common physical symptoms of burnout.
Increased absenteeism: Employees suffering from burnout may take more sick days due to both physical and mental health issues.
Recognizing these signs early allows you to take action before burnout becomes a major financial burden on your business.
Preventing the cost of employee burnout: proactive steps for HR teams
Addressing burnout head-on is critical, but prevention is even more important. Here’s what HR teams can do to reduce the cost of burnout:
Promote work-life balance
Encourage employees to maintain a healthy balance between work and personal life. Consider offering flexible working hours or remote work options to help employees manage stress.
Foster a positive work environment
A supportive culture is essential. Encourage open communication, recognize achievements, and provide opportunities for growth to help employees feel valued and engaged.
Encourage regular breaks
Promote taking breaks during the workday. Encourage employees to step away from their desks, take lunch breaks, and use vacation days to recharge.
Provide employee sssistance programs (EAPs)
Offering confidential counseling and mental health support through EAPs can help employees cope with stress before it leads to burnout.
Offer career development opportunities
Provide employees with opportunities to upskill or take on new challenges. Career growth can keep employees motivated and engaged, reducing the risk of burnout.
Set realistic goals and expectations
Ensure workloads are manageable and deadlines are reasonable. Help employees prioritize tasks to avoid overwhelm.
Mental health checklist for managers: Recognizing burnout symptoms
To help your team spot burnout early, download our mental health checklist for managers. This resource provides practical tips on identifying burnout symptoms and offers steps to support employees before burnout affects productivity, engagement, or your company’s bottom line.
The true cost of burnout and why you must act now
Employee burnout is a growing issue, and its impact extends far beyond just the individual. The cost of burnout is high, but by recognizing the signs early and taking proactive measures, HR teams can protect both employee well-being and company performance. By promoting a supportive environment, encouraging work-life balance, and providing mental health resources, you can mitigate the financial fallout of burnout and foster a healthier, more engaged workforce.
Don’t wait for burnout to take root—take action now to protect your employees and your business.
