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Why You Need to Worry About Employee Burnout

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Employee burnout has costly consequences. Here are four reasons why your organization should be concerned about employee burnout.

Chronic fatigue, disengagement, low motivation and poor performance – these are just some telling signs of employee burnout that companies need to pay close attention to.

Employee burnout is not a personal issue or an indicator of incompetence. Rather, it is a challenge that needs to be tackled from an organizational level.

Workplace stress, in fact, is primarily caused by ineffective leadership and flawed organizational practices. A Harvard Business Review article cites poor management and excessive workload as the common culprits behind employee burnout. Long hours and impossible demands from superiors also contribute to unbearable work-related stress.

Why should companies be concerned? Here are four reasons:

1. Decreased productivity

A mounting body of research demonstrates a positive correlation between an employee’s health and well-being and their productivity at work.

A study conducted by the United Kingdom government shows that positive employee well-being results in improved performance, productivity and work quality. Another study conducted by the IZA World of Labor claims that an increase in employee well-being leads to parallel increases in productivity.

These studies show that an employee’s health and well-being plays a critical role in the quality of the outputs they produce. Simply put, an employee who is healthy and well rested is more likely to deliver high-quality outputs compared to an employee struggling with a demanding workload.

If an organization is committed to its success, it must invest in the well-being and happiness of its employees. 

2. High turnover rate

In a study conducted by Kronos and Future Workplace, burnout is cited as one of the top reasons behind employee attrition. The same study points out that burnout is the biggest threat to workforce retention as reported by 95 percent of human resource leaders.

What are the implications of these findings? A high turnover rate comes with an equally high price. It not only affects the productivity of the entire workforce, but it costs the organization thousands of dollars.

Research by the Center for American Progress points out that companies spend 16 to a whopping 213 percent of an employee’s salary to cover the costs of finding a replacement.

Aside from the added costs, companies risk losing their top talent because of burnout. Most managers tend to overwork their best employees without giving much consideration to their well-being. As a result, top-performing employees are more likely to fail to meet expectations or maximize their potentials. Worse, they get burned out and quit.

The takeaway: Burnout not only comes with a hefty price tag, it drains valuable talent from the organization.

3. Low employee engagement

Engagement pertains to an employee’s commitment to the company’s goals. An engaged employee is more likely to work hard and exert more effort because he or she values the success of the company.

A highly engaged workforce is crucial to the growth of the organization. In contrast, disengaged employees can derail its success.

Disengagement translates to significant losses in revenue because of its adverse impacts on employee productivity and motivation. When employees are overworked or not given sufficient time for rest and relaxation, they are more likely to underperform. In effect, the productivity of the organization is hampered as well as its potential to generate more revenue.

4. Negative health impacts

The U.S. government spends $125 billion to $190 billion annually to cover healthcare costs related to psychological and physical problems related to burnout. This accounts for up to 8 percent of the national budget for healthcare, according to a Harvard study.

The research also reports that work-related stress contributes to 120,000 American deaths annually. These figures only prove that burnout comes with costly consequences.

Overworking can be taxing to both one’s mental and physical well-being. The stress induced by working long hours may lead to mental illness, anxiety and other serious health conditions like heart disease. Moreover, a stressed-out employee is more likely to develop unhealthy behaviors like binge drinking and overeating.

Working too much can literally make a person sick, and with today’s high healthcare costs, this can translate into thousands of dollars in medical and insurance expenses. Aside from that, when an employee is sick, he or she is more likely to take more sick days, and the rest of team is forced to bear that burden. 

Employee burnout is one of the pressing challenges that business leaders face today. Creating a positive working environment and making earnest efforts for successful culture creation should be among the top priorities of any organization.

A company’s workforce is its number one resource. If employees’ health and well-being are given utmost importance, engagement increases along with productivity and motivation.

In the end, it’s a win-win situation for everyone, as the employees are happy and the company benefits from their productivity.

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