As businesses face increasingly competitive environments, burnout and employee turnover are two of the most pressing issues in the modern workplace. The financial and operational costs of burnout and turnover affect everything from productivity to recruitment expenses.
But how much, exactly, are burnout and turnover costing you? And how can you curtail their impact on your business? Healium’s blog aims to answer those very questions.
The Financial Impact of Burnout and Turnover: What the Stats Say
Research consistently shows a direct correlation between high levels of burnout and increased turnover rates. In fact, a study published by Gallup highlighted that employees who experience burnout at work are 2.6 times more likely to be actively seeking a different job.
However, while one often leads to another, burnout and turnover each present a different set of costs for your business.
Cost of Burnout
According to the Harvard Business Review, U.S. businesses lose between $125 billion to $190 billion annually in healthcare costs due to workplace burnout. Additionally, burnout can lead to a 50% increase in safety incidents and a 37% increase in absenteeism, which further elevates operational costs.
Beyond these direct costs, there are several indirect impacts that burnout can have on a business:
• Increased Error Rates: Employees suffering from burnout are less focused and more prone to making mistakes. This can lead to quality issues in services or products, potentially resulting in recalls or legal issues that can be costly.
• Decreased Customer Satisfaction: Burnout can diminish an employee’s ability to provide effective customer service. A lack of engagement or a negative attitude can lead to poor customer interactions, which in turn can damage the company’s reputation and lead to lost sales.
• Decreased Efficiency: The Gallup organization found that burned-out employees are 63% more likely to take a sick day and 13% less confident in their performance, which indirectly affects productivity and operational efficiency.
• Company Reputation: High turnover rates and poor employee reviews often stem from widespread burnout, which can make it difficult to attract top talent.
Cost of Employee Turnover
A business’s net loss from turnover, on the other hand, is much more concrete to measure. Whenever an employee leaves, your business faces expenses in the following areas:
| Description | Cost | |
| Recruitment | Costs associated with advertising new job openings, using employment agencies, and investing time in administrative tasks like screening candidates or conducting background checks. | Typically this ranges from 10% to 30% of the employee’s annual salary, depending on the role and level of seniority. Benchmarking data from SHRM averaged out to just under $4,700 per hire. |
| Training and Onboarding | The investment in training new employees so they reach the productivity level of their predecessors. This includes both the cost of formal training programs and the time spent by senior employees or managers in mentoring. | Generally accounts for 10% to 20% of the salary for the first three months. According to the Association for Talent Development, employers spend $103 per hour of training on average. |
| Lost Productivity | Referring both to the length of time a position is unfilled as well as the lost productivity levels while new hires are trained to reach full productivity. This can take several months to a year, resulting in a significant loss in what could have been productive output. | Calculated using the time it takes to achieve full productivity multiplied by the percentage of that role’s salary the elapsed time represented. |
All of these costs also fail to take into account the ripple effects of turnover that extend beyond mere dollars spent. For every employee lost, businesses also face:
1. Loss of Institutional Knowledge: When employees leave, they take their knowledge and experience with them, which can lead to gaps in the organization’s institutional memory.
2. Lowered Morale: High turnover can lead to decreased morale among remaining staff, who may feel overburdened or concerned about job security.
3. Disruption to Team Dynamics: New employees need time to integrate into teams, which can disrupt existing workflows and team chemistry.
Needless to say, burnout and turnover cost businesses dearly the longer the root cause of the issue goes unaddressed.
How to Reduce Burnout and Turnover
By addressing burnout and turnover, organizations can significantly enhance overall employee satisfaction and organizational health, as well as avoid the steep costs of each outlined above.
The following list outlines key initiatives that businesses can adopt to mitigate these challenges effectively.
Mental Health Support
• Stress Management Tools: Get in front of burnout before it occurs by providing your employees the means to lower their stress levels. Mental health tools like Healium offer self-driven, meditative experiences that have been proven to lower anxiety in as little as four minutes.
• Access to Counseling: Provide employees with easy access to mental health professionals through employee assistance programs (EAPs) or health insurance benefits.
• Mental Health Days: Encourage employees to take mental health or days off to recuperate from stress without the stigma or need for a traditional sick note.
• Training for Managers: Equip managers with training to recognize signs of burnout and mental health struggles, enabling them to intervene appropriately and supportively.
Wellness Programs
• Regular Workshops: Host workshops on stress management, mindfulness, and healthy living to provide employees with tools to manage stress and enhance personal well-being.
• Flexible Work Arrangements: Offer flexible working hours and the option for remote work to help employees balance their personal and professional lives, reducing stress and preventing burnout.
• Physical Wellness: Support physical health through subsidized gym memberships, organized sports activities, or on-site fitness classes.
Integrating Healium to Reduce Burnout and Turnover
Healium offers a unique solution to combat workplace stress and burnout by allowing users to actively engage with their mental health through immersive, calming experiences. These experiences have been clinically proven to work in as little as 4 minutes and can also optionally sync with biofeedback data, letting users see how they’re doing in real time.
See how it works below!
To explore how Healium can transform your organization’s approach to mental health and employee wellness, contact us today for a demonstration. Let us help you build a more resilient and happier workforce.
About the Author
Sarah Hill, a former interactive TV news journalist at NBC, ABC, and CBS affiliates in Missouri, gained recognition for pioneering interactive news broadcasting using Google Hangouts. She is now the CEO of Healium, the world’s first biometrically powered VR channel, helping those with stress, anxiety, insomnia, and other struggles through biofeedback storytelling. With patents, clinical validation, and over seven million views, she has reshaped the landscape of immersive media.
Understanding the High Costs of Burnout and Employee Turnover
appeared first on Healium.