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The cost of burnout for employers

As well as the emotional toll on people, there's a very real financial cost of employee burnout for businesses

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The three main costs of employee burnoutThe average cost of burnout and poor mental healthHow many people experience burnout at work?

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  • The three main costs of employee burnout to a company are decreased productivity, increased levels of absenteeism, and higher staff turnover.
  • An employee with poor mental health costs their employer an average of £2,646 per year.
  • One report suggests 52% of workers feel burned out — data gathered by Spill found that 79% often felt close to burnout at work.
  • By looking after employee mental health it's possible to reduce the financial cost of burnout: flexible working, regular breaks, employee therapy, and policies that address work-life balance are all a few ideas.

Burnout could be costing UK businesses over £700m every single year, thanks to workers calling in sick with signs of stress and exhaustion. While absenteeism is a relatively conspicuous sign that your team is overdoing it (or doing exactly the amount expected of them but without the right support), it’s just one symptom of a struggling workforce – and one that’s only easy to spot once the damage to your team’s health has already been done.

Some of the main costs that companies may experience due to burnout include:

  • Increased absenteeism: Burnout can lead to increased absenteeism as employees may need to take time off to deal with stress and exhaustion.
  • Decreased productivity: Burnout can cause employees to lose motivation, which can lead to a drop in productivity. This can have a significant impact on a company's bottom line.
  • Increased healthcare costs: Burnout can also lead to physical and mental health problems, which can result in increased healthcare costs for both employees and employers.
  • High turnover rates: Burnout can cause employees to leave their jobs, which can lead to high turnover rates and additional costs for recruiting and training new employees.
  • Negative impact on company culture: Burnout can also have a negative impact on company culture, leading to low morale and a lack of engagement among employees.
  • Reputation damage: Burnout can also damage an employer's reputation, particularly if they are perceived as being unsupportive or indifferent to the wellbeing of employees.

Let's explore some of the main costs resulting from employee burnout in a little more detail...

The 3 main costs of employee burnout

Burnout is a kind of emotional exhaustion caused by chronic stress in the workplace. It can affect workers in different ways, but it amounts to feeling hopeless or overwhelmed in situations that you would have been able to handle with ease before. With classic symptoms like fatigue, negativity and ineffectiveness, the human costs of burnout are painfully clear. But from a business perspective, what’s the damage?

1. Lost productivity is a cost of burnout 🐢

How does employee burnout affect productivity? Someone suffering from burnout simply doesn’t have the energy or the motivation to perform at their best, or their speediest. Unavoidably, some work will be left untouched.

Burnt-out workers will find it harder to concentrate and communicate with their team, and they’re likely to feel mentally distracted all day, every day. They may be running on little sleep, and innovation will also take a backseat. When your brain is running in survival mode, there’s no space for creativity. Which is especially problematic for professional creative types.

Showing up to work but not being able to perform at full capacity is known as presenteeism, and Deloitte estimates that mental health-related presenteeism cost UK employers between £24-£28 billion in 2021 alone. 

2. Days off are a cost of burnout 📅

Sick leave due to poor mental health was the top cause of time off work in the UK in 2021. And according to a 2022 study by MetLife, more than 40% of workers have called in sick due to feeling exhausted, stressed, or overwhelmed.

When employees experience burnout, they may be more likely to take sick leave in order to cope with their physical and emotional symptoms. This can result in increased costs for employers if they need to hire temporary resource to cover the absent employee's workload.

3. Staff turnover is a cost of burnout 👋

61% of people who have recently left or are actively planning to leave their jobs cite mental health as a reason. And the cost of replacing valuable team members really adds up – from recruitment costs to training and negotiating a new recruit’s salary, you can expect to pay around 20% of a worker’s salary to replace them, if they’re in a mid-range position.

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This template is designed to help managers form clear objectives and initiatives to support employees who are experiencing burnout, and prevent it from happening again

The average cost of burnout and poor mental health for UK employers

A 2022 study by Deloitte added up the cost of presenteeism, absenteeism and staff turnover due to poor mental health for businesses in the UK. They found that an employee with poor mental health costs their employer an average of £2,646 in a single year. (This figure is based on the ‘professional services’ industry, but flexes up to £3,710 if you’re in finance or insurance, and down to £1,122 for retail businesses.) 

Spill cuts the cost of burnout in your company by surveying burnout risk and giving next-day therapy sessions with burnout specialists to those in need.

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How many people experience burnout at work? 

More than you might think. A recent report by Indeed found that 52% of all workers feel burned out, which was up +9% since the Covid-19 pandemic shook up the working world. Back in 2021, we surveyed 1,460 employees across the UK ourselves, and found that a scary proportion of them (79%) often felt close to burnout at work. This rose to an alarming 82% of workers in the tech industry. And some workers are disproportionately affected, too. Research has shown that women and working parents are generally at higher risk of burning out. 

Use our burnout recovery plan to frame a conversation with your employees👇

A screenshot of Spill's burnout recovery plan template
Spill's burnout recovery plan template will help you support an employee through their burnout recovery

The causes of burnout are psychologically complex. But the chance of feeling emotionally exhausted by work is exacerbated by a reluctance to take time off to reset. Legally, taking a day off for your mental health should be treated the same as any other sick day by employers, but the idea of rolling out mental health days as a preventative measure for burnout is only just starting to gain traction. Stigma is sticky. And sadly, 43% of employees still feel unable to talk to their managers about their mental health at all. 

How to reduce the financial impact of burnout

Luckily, there’s loads you can do as a responsible employer to look after your team’s mental health and help them feel safe, valued and motivated at work. Here are some ways to reduce the financial cost of burnout to employers:

  • Address the root cause of burnout: This may include implementing policies to address key areas that contribute to burnout. such as work-life balance.
  • Promote mental health and wellbeing: Think about ways to prevent entrenched exhaustion by improving employee wellbeing more holistically in your company, and pointing anyone who's struggling towards an employee assistance programs or a targeted counselling service.
  • Implement flexible working: Offering flexible work hours and compressed workweeks can help employees manage their work-life balance, reduce stress, and prevent burnout.
  • Encourage regular breaks: Encouraging employees to take regular breaks can help them manage their workload and prevent burnout. By promoting a culture of self-care and encouraging employees to take time off, employers can reduce the cost of absenteeism and presenteeism.

To avoid the costly business challenges that come with burnout, it's important to catch it early. But symptoms can be tricky to spot, so sometimes the only way to know how your employees are really doing is to ask them. That's where Spill comes in. Our mental health detection system checks in on your team's mood every week to spot early signs of burnout, and a qualified therapist will reach out automatically to support anyone who’s struggling before things get worse.

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Get our free burnout recovery plan

This template is designed to help managers form clear objectives and initiatives to support employees who are experiencing burnout, and prevent it from happening again

Spill Safety Net regularly asks your team how they're feeling to help spot the early signs of burnout and if anyone is at risk, a Spill counsellor will reach out to them to offer support.

Learn about Spill Safety Net