How much does burnout cost companies?
Employee burnout is a growing problem in today's fast-paced, always-on culture. According to a recent study by the American Institute of Stress, job-related stress costs US companies an estimated $300 billion a year in absenteeism, turnover, and decreased productivity. This is undoubtedly a call to action for companies to address the issue of employee burnout in the workplace.
What's burnout?
It's a state of physical, emotional, and mental exhaustion that affects our ability to perform and feel fulfilled at work. Burnout can lead to decreased productivity, high turnover rates, and challenges in recruiting new talent.
Long working hours, impossible deadlines, and poor management are some of the most common causes of employee burnout. But burnout doesn't have to be inevitable. As an employer, you can take proactive steps to support your employees' mental health and well-being, foster a supportive work environment, and provide resources for self-care and work-life balance.
The Cost of Employee Burnout
Employee burnout can have significant financial consequences for businesses. From decreased productivity to high turnover rates, and challenges in recruiting new talent. When employees are overworked and their mental health is ignored, it can impact the overall health of a business and its ability to succeed in the marketplace.
Low productivity
Burnout can lead to decreased motivation, energy, and focus, which can result in missed deadlines, lower-quality work, and decreased productivity. This, in turn, can cause missed opportunities, lost revenue, and decreased profitability for the business.
High turnover
Employee burnout can push employees to leave their jobs, resulting in significant costs for the business. Not only does the firm loses the employee's skills and experience, but it also incurs costs associated with recruiting, hiring, and training a replacement. In industries with high turnover rates, this can be a major expense.
On-going absenteeism and health problems
A study by Gallup found that burned-out employees are 63% more likely to take a sick day and 2.6 times more likely to be actively seeking a different job. Workers who reported high levels of job stress were more likely to report symptoms of depression and anxiety and experience physical health problems such as headaches and stomach problems.
What is causing your employees to Burnout?
One of the main causes of employee burnout is long working hours. This can include working overtime, taking work home, or working on weekends. This hectic pace of work produces fatigue, stress, and burnout over time. The same Gallup survey found that full-time employees who work over 50 hours per week are more likely to experience burnout than those who work 35-49 hours per week. This is concerning given that the International Labour Organization reports that 36% of workers worldwide work on this schedule.
In the context of remote work, it becomes even more challenging to address employee burnout. While remote work has proven to be efficient in balancing work and personal life, employees with poor time management or self-governance skills may struggle to meet deadlines. Moreover, companies with unclear guidelines can create a culture of procrastination and deadline mode, further exacerbating burnout.
Unrealistic deadlines and a lack of support are also common causes of burnout. Employees may be given an unmanageable workload or an unreasonable timeframe to complete their tasks, without adequate resources or training to perform their jobs effectively. This creates a sense of frustration and helplessness.
Pay attention to the signs
Managers need to recognize the signs and symptoms of burnout and take steps to address them early. This can include regularly checking in with employees about their well-being and providing resources and support to help them prioritize self-care and work-life balance.
One of the key steps in recognizing employee burnout is understanding the signs and symptoms. These may include:
- Physical symptoms such as fatigue, headaches, and insomnia.
- Emotional symptoms such as anxiety, irritability, and a lack of motivation.
- Decreased productivity.
- Increased absenteeism, and poor job performance.
When managers are aware of these signs and symptoms, they can take steps to address burnout before it becomes a more serious issue.
What can managers do to prevent employee burnout
Regularly checking in with employees about their well-being is crucial in preventing burnout. This means taking the time to have one-on-one conversations with employees to understand how they are feeling and whether they are experiencing any issues at work or in their personal lives.
It's also important for managers to provide resources and support, such as offering flexible work arrangements, to help employees balance their work and personal lives. However, it's equally important to provide adequate training for managers and leaders to support their teams and recognize the signs of burnout. This can go a long way in creating a healthy and productive work environment.
Here are some examples of what companies are trying to reduce employee burnout:
- LinkedIn offers a "Time Off" program that allows employees to take time off when they feel overwhelmed, without the need for approval.
- Asana encourages its employees to take a day off every quarter to focus on their personal goals and recharge. The company also offers mental health resources, including counseling services.
- Google, the tech giant, has a "Resilience Lab" that offers workshops and training sessions on mindfulness, meditation, and stress reduction techniques. The company also offers on-site health clinics and healthy food options to support employee well-being.
- Buffer has implemented a "No Talk Tuesdays" policy, where employees can spend the day working without any interruptions from colleagues or meetings. This policy is designed to help employees focus on their work and reduce distractions that can contribute to burnout.
- Patagonia, the outdoor clothing company, offers the option to work from home or work a reduced schedule during the summer months. The company also offers paid time off for volunteering and encourages employees to pursue their outdoor passions to help prevent burnout.
- If the problem is on the workload, increase your team's capacity. There a a lot of new ways to build capacity by keeping the budget tight. From fractional professionals that can give you a hand, to hiring offshore by a third of the price.
Protecting Your Bottom Line
Gone are the days when managers believed that seeing an employee working constantly was a sign of productivity. Research has shown that such an approach is counterproductive. In fact, according to a study by the Society for Human Resource Management, employees who feel that their organization prioritizes their well-being are 38% more engaged and 18% more likely to go above and beyond in their work.
It's clear that employee burnout has serious negative implications for businesses. By neglecting employee well-being, businesses risk decreased productivity, high turnover rates, and challenges in attracting new talent. To prevent burnout and its associated costs, businesses should prioritize their employees' mental health and well-being, cultivate a supportive work environment, and provide resources for self-care and work-life balance. By doing so, they can improve their bottom line and thrive in the competitive marketplace.
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Kevin Mitchell, CPA
Senior Manager and CPA with over 20 years of experience in accounting and financial services, specializing in risk management and regulatory compliance. Skilled in managing audits and leading teams to deliver exceptional services. Proud father of two.
