Researchers calculated exactly how much employee burnout is costing companies per year—it’s staggering

Feeling burned out? It could be costing your company millions of dollars each year in lost productivity and employee turnover. A new study in the American Journal of Preventive Medicine estimates that employee burnout in the U.S. costs somewhere between $4,000 and $21,000 per worker per year.

Do the numbers, and that adds up to about $5 million per year for a company with 1,000 employees. (Another way to look at it: Employee disengagement, or burnout, can cost 0.2 to 2.9 times the average cost of health insurance, and 3.3 to 17.1 times the cost of training per employee.)

The research is based on a computational simulation model developed by the Public Health Informatics, Computational, and Operations Research team based at ​​the CUNY Graduate School of Public Health and Health Policy, working with researchers from Baruch College, Johns Hopkins University, and the University of San Diego Knauss School of Business.

The model works by simulating how an employee fares at different stages over time—from active engagement to disengagement and burnout—based on stressors the employee encounters both in the workplace (workload, community, control, rewards, fairness, and value) and outside work (family, cultural and psychological environment, finances, and health). It even looks at how a freelance or hourly employee would do versus a salaried one.

The team then ran the model to estimate the resulting cost of employee productivity losses to employers. It found a nonmanagerial hourly worker going through burnout would cost an employer on average $3,999.

That average cost rose to $4,257 for a nonmanagerial salaried worker, $10,824 for a manager, and $20,683 for an executive.

According to the Mayo Clinic, job burnout is defined as a type of stress linked to work. It includes being worn out physically or emotionally, and may involve “feeling useless, powerless, and empty.” While burnout isn’t a medical diagnosis, it can raise the risk of depression and has been tied to anxiety.

A lot has been written about the health consequences of employee burnout, but less has been written about the financial effects.

“Our model quantifies how much employee burnout is hitting the bottom line of companies and organizations,” Bruce Y. Lee, CUNY SPH professor and senior author of the study, said in a statement. “Therefore, it can give companies and organizations a better idea of how focusing more on employee well-being could help decrease costs and increase profits.”

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