The Business Impact of Burnout

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Robert Bogue Robert Bogue

The World Health Organization (WHO) recently added new criteria for burnout as a part of its ICD 11 coding scheme.  This moves burnout forwards as a specific condition that can be diagnosed as an occupational phenomenon by health and mental health workers.  However, the impact to your business is more than just the fact that burnout can be formally diagnosed now.

What is Burnout?
Burnout was first discussed by Herbert Freudenberger in 1974.  Since then, the defining characteristics of exhaustion, cynicism, and inefficacy have held relatively stable – these are, in fact, the core of the WHO definition.  Though Freudenberger’s original work, and much of the subsequent work, targets burnout toward anything someone is passionate about, WHO defines burnout solely as an occupational phenomenon related to work. Burnout has historically been assessed using variants of the Maslach Burnout Inventory (MBI).  More recently, the public domain Copenhagen Burnout Inventory (CBI) has become available for use to allow individuals to be assessed without the cost of the MBI.

What’s the Cost?
Because few organizations have assessed their employees for burnout with either the MBI or the CBI, it’s difficult to pin specific numbers to the impact of burnout.  However, we do know that there are several factors that are influenced by burnout.  Gallup reports that 85% of employees worldwide are not engaged or are actively disengaged in their job.  Employees can’t be engaged in the organization if they’re actively in burnout.  Organizations with the best engagement see turnover numbers that are 59% lower than those with low engagement scores (Gallup, Inc. 2017).  Further, we know from the Bureau of Labor Statistics that, across all industries, voluntary turnover was 24.6% in 2016, 25.7% in 2017, and 26.9% in 2018 (Bureau of Labor Statistics n.d.).  Josh Bersin estimates the cost of replacing an employee is somewhere between 1.5 to 2 times their annual salary (Bersin 2013). Poor engagement costs your organization about 24% of your annual payroll, assuming 26.9% voluntary turnover, 1.5 times annual salary, and a 59% reduction in turnover.  (The cost rises to 32% if you use 2 times the salary.) Gallup also reports that high engagement organizations have 21% higher profitability than their low-engagement peers.  In short, poor engagement – and thus burnout – hits the bottom line. 

What Can Be Done?
Like any other aspect of your business, it’s possible to get control on the burnout problem and reign in the bottom-line costs – as well as the costs to the employees that you care about.  There are two ways you can support employees in their fight against burnout.

A Sense of Control
At the heart of burnout is a sense of hopelessness – that there’s nothing you can do to make things better.  Hopelessness is, at its heart, a lack of a feeling of control – or even influence – on the things happening around you.  The less influence you feel you have, the more hopeless you’re likely to feel. Leaders can help the sense of influence by listening to employees, including their ideas and fears.  This doesn’t mean that you must utilize every idea provided or address every fear (if that were even possible).  Taking a small suggestion or simply listening at all can help restore a sense of influence and ward off helplessness.  

Acknowledge Successes
After every success is the next challenge.  In business, we’re very accustomed to reorienting and getting ready for the next challenge.  However, in doing this, we sometimes don’t give our – or our employees’ – successes proper attention.  By spending a few minutes on acknowledging successes, we can restore a sense of agency with employees.  We can help them see that we are getting some wins.  It’s not all just a new hill to climb, there’s the one we’re standing on.  You don’t have to throw an elaborate party or even pause.  Simply acknowledging that the last win allows you to take on the next challenge is enough to break down helplessness and refocus everyone on the good work that is being done – even if you don’t win every fight. 

Putting It Together
Burnout is a very serious issue for any organization that can cost up to a quarter of the annual payroll.  Helping employees avoid burnout isn’t impossible or even difficult.  A little bit of well-timed listening and a small amount of encouragement about the things that have already been accomplished can mean the difference between burnout and profitability.

Robert Bogue is the President of Thor Projects LLC and co-author of Extinguish Burnout: A Practical Guide to Prevention and Recovery

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