24-04-2025
Burnout Is Costing Businesses Millions—Here's What Leaders Can Do About It
Over half of employees say they're at a moderate to high risk of burnout.
Burnout is a multi-million-dollar hidden business expense that's undermining corporate America's bottom line. According to new research published in the American Journal of Preventive Medicine (AJPM), at an average 1,000-person U.S. company, employee disengagement and burnout resulted in $5.04 million in lost costs annually.
There are several ways in which burnout poses a financial risk to companies. For instance, burnout often leads to higher absenteeism and reduced productivity. According to APJM's report, employees experiencing burnout are less productive and tend to miss more workdays. Studies from SHRM also show that replacing employees who quit can cost between 50% and 200% of their annual salary, and burned-out workers are nearly three times more likely to be actively job hunting. What's worse is that burnout can cost more than onboarding new hires. The APJM report found that disengaged and burned-out employees can cost up to 17 times more than it does to train a single employee.
Unfortunately, many employers underestimate how many of their employees are experiencing burnout. According to 'Future of Benefits Report,' 69% of employees say they're at a moderate to high risk of burnout, while employers believe only 45% of their employees are at risk. This 24-point disconnect that terms the 'burnout perception gap' could devastate business outcomes and exacerbate the already growing costs associated with burnout.
Often, overwork stems from excessive unessential tasks that don't directly contribute to organizational value. According to a recent Deloitte article on its '2025 Global Human Capital Trends' survey findings, nearly half of employees feel they're being bogged down by work that isn't value-driven, and only 22% of survey respondents feel that their organization is highly effective at simplifying work. And while 82% of employers acknowledge the importance of freeing up employee capacity, a mere 8% say they've made progress at doing so.
According to Deloitte, it's 'the meeting overload, the outdated processes, and the myriad of nonessential work' that hold employees back from 'achieving the outcomes that matter the most.' For businesses to effectively manage burnout, it starts with eliminating busy work that leads to overwork—such as unnecessary meetings and antiquated processes. The authors suggest that employers instead give employees 'slack' or 'unscheduled, unassigned time in the workday that workers have complete autonomy over.' This gives employees the agency to own and be accountable for their productivity. This way, employees aren't weighed down by tasks that likely won't contribute significant value to the company or are more focused on hours worked than actual results.
Employers can also consider gaining a deeper understanding of each employee's individual needs. research found that 83% of employees paying for family care say caregiving worsens burnout risk. As the report highlights, understanding the needs of caregivers and providing benefits—such as access to child and senior care, additional healthcare coverage, and care subsidies—can go a long way in mitigating burnout among employees who are also caregivers.
When leaders make an effort to understand the unique needs of everyone on their team, it can provide insights that help prevent the costly effects of burnout, such as missed workdays, reduced productivity, and higher employee turnover. And as this author has written in the past, regular employee surveys and one-on-one meetings are reliable strategies that encourage active listening and ensure leaders are attuned to the needs of their teams.
Burnout is far more than a workplace culture concern—it's a massive hidden cost for many American businesses. Yet it isn't an inevitable expense. With the right strategies in place, companies can stop burnout and disengagement from dragging down their teams. By empowering employees to take ownership of their work and understanding what they need to succeed, business leaders can proactively address burnout and avoid its costly side effects. If businesses want to truly protect their bottom lines from burnout, cultivating a motivated, supported, productive workforce is the way to do it.
