The Hidden Toll: Why Ignoring Burnout is a Costly Mistake for Businesses

Companies shouldn’t be looking at burnout and well-being as an individual issue, but as an organizational issue with real costs. When employees are burnt out or experiencing workplace dissatisfaction, a company will experience higher turnover, increased health spending, and loss of productivity.  This costs companies money, time, and resources.

But exactly how expensive is it? Answering this question is tough due to the wide-ranging effects of burnout, but one thing’s clear—it comes at a significant cost. Not only is supporting employee mental health the right thing to do on a human level, it’s also a good business practice.

The cost of turnover.

Having employee turnover is expensive. In technical positions, replacing an employee can cost 100 to 150 percent of the salary of that position. When we’re talking about the C-suite, it can cost over 200 percent of the salary. There is also a cost of vacancy for open roles that is often overlooked, especially in revenue-generating roles like sales positions. You may not be paying anyone to be in that position, but you’re losing all the potential revenue they would be bringing in.

However, even if it wasn’t a revenue-generating role, there is still a cost to an open role. When someone leaves and a role remains unfilled, the tasks of their job still need to be done. This leads to heavier workloads, more stress, and higher pressure for remaining employees. When too many roles are left opened and employees are overwhelmed with extra work, more turnover is a likely result.

Increased health spending.

Stress has real impacts on overall health markers. Chronic stress is hard on the body and puts people’s health at risk. Chronic stress at work leads to burnout and burnout perpetuates stress.

In a 2017 study, burnout was found to be a significant predictor of physical consequences. These include but aren’t limited to type 2 diabetes, coronary heart disease, headaches, respiratory problems, and severe injuries and mortality below the age of 45. This same study identified psychological effects including insomnia and depressive symptoms, and professional outcomes including absenteeism, job dissatisfaction, and new disability pension.

Loss of productivity.

The World Health Organization that states that depression and anxiety cost the global economy 1 trillion USD each year from reduced productivity. The WHO has gone as far to classify burnout as an “occupational phenomenon” and has included it in the International Classification of Diseases.

Companies are losing money due to absenteeism, which is related to health issues often connected to stress and burnout. For example, Canadian companies are losing an estimated $16.6 million in productivity per year due to workers calling in sick due to mental health issues. 

Presenteeism is also another workplace phenomenon that is affecting employee productivity and employers bottom lines. Presenteeism is a symptom of burnout and is when the employee is present, but mentally disengaged. This state can reduce productivity by up to 33%.


Caring about the welfare of employees and their mental health is how we ensure that our workplaces have a culture that allows people to thrive. By leading teams with an approach grounded in humanity, we can maximize the potential of our people and our business.

If you’d like to strengthen your well-being and the well-being of your team, check out our wellness series of courses called From Stress to Success. Learn about how emotional labour, burnout, stress, and sleep impact performance, and what you can do help yourself and your team.

We’re here to help. Your greatness awaits.