company stress test
Employee burnout can cost companies up to $21,000 per employee in the United States, resulting in millions of dollars worth of losses each year for American businesses. According to a study recently published in the American Journal of Preventive Medicine, a company employing 1,000 people risks losing about $5 million each year as a result of employee burnout.
The study is based on a computational model that simulates an employee’s response to workplace stressors that can influence active participation, disengagement and burnout at work. The model considers factors such as the employee’s position, including hourly non-manager, salaried non-manager, manager or executive. It also allows researchers to assign a stage of burnout to the employee at the start of the simulation. For example, the simulated employee can be engaged, burned out, overextended, disengaged, ineffective or ready to leave their job.
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As the simulation proceeds, the employee has probabilities of encountering different workplace stressors, which may include workload, community, control, rewards, fairness and value. Non-workplace stressors including family, finances and health also play into the simulation. Over a two-week period, the simulation tracks whether employees stay in their initial state or move into a different state depending on the stressors encountered. Each state is assigned a productivity level and possible health effects.
From these simulations, researchers were able to estimate the resulting cost to an employer when employees experience different types of disengagement and burnout. For example, an hourly non-manager employee going through burnout would cost an employer an average $3,999, the study found. These costs are $4,257 for a salaried non-manager, $10,824 for a manager, and $20,683 for an executive.
In some cases, employee disengagement and burnout may cost employers more than health insurance and employee training. As such, initiatives aimed at preventing disengagement and burnout through mental health benefits, financial literacy programs and managing employee workloads may be a worthwhile investment for employees, the study said.
“Burnout is pervasive and it's costing organizations millions each year,” said Molly Kern, professor at the Zicklin School of Business at Baruch College and co-author of the study. “Organizational leaders need to consider how their cultures and benefits programs support the 60% of employees silently struggling with burnout."
The simulation was conducted by researchers from the CUNY Graduate School of Public Health and Health Policy, Baruch College, Johns Hopkins University and the University of San Diego Knauss School of Business.
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