ARTICLE | August 11, 2023

In our increasingly demanding professional landscape, employee burnout has become a serious concern affecting individuals and businesses. Characterized by chronic physical and emotional exhaustion, cynicism, and detachment from work, burnout hinders productivity and impacts the bottom line. 

The scope and cost of burnout

According to a McKinsey survey, one in four employees report experiencing symptoms of burnout. This statistic isn’t confined to a single country or culture – it is a worldwide phenomenon. 

A particularly eye-opening finding from the McKinsey survey was the disconnect between how employers and employees perceive mental health and well-being in the workplace. Employers tend to have a more positive view of workplace conditions than their employees. In fact, the survey uncovered a 22% gap in perceptions, with employers consistently rating workplace dimensions more favorably than their employees. This gap highlights a potential blind spot for many organizations. While employers may believe they provide a supportive and healthy environment, their employees may be struggling, experiencing burnout, and contributing less to the organization. 

The costs of burnout can be significant and wide-ranging. The most obvious costs are those associated with absenteeism and turnover. According to Gallup, burned-out employees are 63% more likely to take a sick day and 2.6 times as likely to seek a new job. Furthermore, the cost of replacing these employees can range from 50% to 200% of their annual salary, depending on the role and industry. 

The financial implications of burnout extend beyond these direct costs. Burnout can also lead to substantial productivity loss. Employees suffering from burnout may be physically present but mentally disengaged. They may be slower in completing tasks, make more mistakes, or be less creative, all of which can negatively impact your organization’s output and, ultimately, its financial performance. 

It’s also worth considering the reputational cost associated with high burnout rates. In an age where company reviews on platforms like Glassdoor are accessible to all, high employee burnout can deter potential talent, making it more challenging and costly to attract and retain high performers. 

Fortunately, investing in burnout prevention yields high returns. Stanford research reveals that companies investing in employee wellness programs had a 7.8% lower turnover rate. Another study by Deloitte found a return on investment of $1.62 for each dollar spent on mental health programs. These findings indicate that a proactive approach to preventing burnout is a strategic financial decision. 

Understanding burnout

To combat burnout effectively, we need to understand its causes, which often stem from mismatches between a person and their job. If you recognize any of the following scenarios in your own workplace, it may be time to take steps to realign these areas and foster a healthier, more productive work environment. 

Unmanageable Workload: An unmanageable workload is a common cause of burnout. For instance, an employee might be expected to manage several high-priority projects concurrently without adequate resources. Also, if the workload fluctuates excessively, with periods of extreme busyness followed by periods of idleness, it can be difficult for employees to manage their time and stress effectively. 

Little control: If employees feel they have little control over their work, it can leave them feeling powerless and stifled. 

Lack of reward: A lack of reward can be a strong driver of burnout. This may be an employee who consistently meets or exceeds expectations yet does not receive adequate recognition or compensation. It can also pertain to a lack of intrinsic rewards, such as personal satisfaction or a sense of accomplishment. 

Isolation: Workplace isolation, conflict, or a lack of respect can create a hostile work environment. 

Lack of fairness: When employees perceive that rewards or policies are not applied fairly, this can contribute to burnout. This could occur if promotions seem to be based on favoritism rather than merit or if certain employees bear the brunt of the workload without good reason. 

Inconsistent values: If there is a disconnect between an employee’s personal values and the actions or culture of the organization, it can cause internal conflict for the employee and contribute to burnout. 

Identifying burnout

Being alert to changes in employees’ behavior, work habits, or attitudes can help signal burnout. Here are some key signs to look out for: 

Decreased productivity and efficiency: Employees suffering from burnout may struggle to concentrate, make more mistakes, or take longer to complete tasks. 

Increased absenteeism or tardiness: Burnout can lead to physical ailments such as headaches or stomachaches, causing employees to miss work or come in late. 

Changes in behavior or attitude: Burned-out employees may become irritable, withdrawn, or cynical. They may seem less enthusiastic or express dissatisfaction with their job. 

Self-isolation: Burned-out employees may start to distance themselves from their colleagues. This could manifest as an employee withdrawing from work-related social activities or showing a decreased interest in collaboration. 

Increased cynicism: Burnout can cause employees to become cynical or critical about their job and the organization at large. They may voice doubts about your company’s mission, values, or leadership. 

Keep in mind that these signs might not look the same for everyone. However, regular check-ins, employee surveys, or simply promoting an open culture where employees feel safe to express their feelings can facilitate the early detection of these signs. Training managers to recognize these signs and respond with empathy and understanding can also stop burnout before it becomes too severe. 

Addressing burnout

If you’ve spotted possible burnout, here are some ways to address it: 

Promote a work-life balance 

Employees who have a balanced life are less likely to experience burnout. Encourage employees to use their vacation time and disconnect from work during these periods. Consider flexible work hours so employees can fit work around their personal needs and responsibilities. Also, consider offering remote work options, which might be more conducive to employees’ productivity and personal comfort. 

Manage workloads effectively 

Ensure that workloads are fair and manageable. Consider leveraging workflow management tools to track assignments and deadlines to avoid overloading employees. Regularly review workloads to ensure they are fair and realistic given the resources and time available. Also, encourage open dialogue about workloads. If an employee is feeling overburdened, they should feel comfortable discussing this with their manager. 

Foster a positive workplace culture

Create an environment that supports teamwork, inclusion, and positivity. Regular recognition of efforts, achievements, and milestones can boost morale. 

Support mental health 

Consider offering an Employee Assistance Program (EAP) that provides resources for managing stress and other personal issues. Many EAPs provide access to counseling services, legal advice, financial planning, and more. Be sure to educate employees about mental health, stress management, and signs of burnout. This could be done through workshops, seminars, or online resources. 

Take an organizational approach to burnout

Research shows that burnout is mostly driven by an imbalance in the demands of the job and the resources available. Employers may need to rethink their organization’s systems, processes, and rewards to tackle burnout. 

Many employers make the mistake of thinking that burnout is simply a personal issue for employees who lack resilience. While resilient employees may be able to work in tough environments, they will not put up with them forever. So, if you only focus on boosting employee adaptability without fixing the bigger workplace issues, you risk losing some of your most resilient employees. 

A proactive approach to identifying and addressing employee burnout is not just an investment in your employees’ well-being; it’s a strategic financial move. Not only does this help foster a healthier and more productive workforce, but it also enhances financial stability by reducing turnover and related costs. 

This article is intended to provide a brief overview of recognizing and addressing employee burnout. If you would like to discuss strategies for effectively addressing burnout in your organization, please get in touch with us to discuss your unique situation with one of our expert advisors.