Employee burnout can cost employers millions each year

New York, NY | February 27, 2025: Employee burnout is likely costing companies millions of dollars each year, ranging from approximately $4,000 to $21,000 per employee in the U.S., according to a study published in the American Journal of Preventive Medicine. That means a 1,000-employee company in the U.S. would on average be losing about $5 million annually. These estimates are based on a computational simulation model developed by the Public Health Informatics, Computational, and Operations Research (PHICOR) team based at ​​the CUNY Graduate School of Public Health and Health Policy (CUNY SPH) working with researchers from Baruch College, Johns Hopkins University (JHU), and the University of San Diego (USD) Knauss School of Business.

“Our model quantifies how much employee burnout is hitting the bottom line of companies and organizations,” says Bruce Y. Lee, CUNY SPH professor, PHICOR and Center for Advanced Technology and Communication in Health (CATCH) executive director, and senior author of study. “Therefore, it can give companies and organizations a better idea of how focusing more on employee well-being could help decrease costs and increase profits."

The computational model simulates an employee who moves through different stages ranging from active participation at work to disengagement and burnout over time depending on what stressors the employee encounters. One can specify the position of the employee (e.g., hourly non-manager, salaried non-manager, manager, or executive) and what state that employee is in initially (e.g., engaged, burned out, leave their job, overextended, disengaged, or ineffective).

As time in the simulation proceeds, the employee has probabilities of encountering different stressors that relate to the workplace (e.g., workload, community, control, rewards, fairness, and value) and non-workplace (e.g., family, cultural and psychological environment, financial, and health).The number of stressors and the type of stressors (workplace, non-workplace) that an employee experiences during a two-week period determines if the employee stays in the same state or moves to a different state. While the employee is in a given state, that employee has certain productivity levels and experiences different possible health effects.

The team then ran the model to estimate the resulting cost to an employer when different employees experience different types of disengagement and burnout at different times. For example, an hourly non-manager employee going through burnout would cost an employer on average $3,999 (95% range: $3,958-$4,299). These costs would be on average $4,257 (95% range: $4,215-$4,299) for a salaried non-manager, $10,824 (95% range: $10,700-$10,948) for a manager, and $20,683 (95% range: $20,451-$20,915) for an executive. If one were to assume that a 1000-employee company has the typical distribution by employee type (59.7% non-managerial hourly, 28.6% non-managerial salaried, 10% managers, and 1.7% executives), then the costs of employee disengagement and burnout to the employer would total $5.04 million (95% range: $5.03-$5.05 million) annually. There would also be an associated 801.7 (95% range: 801.5-801.9) quality-adjusted life years lost each year.

All of this quantifies the substantial impact that employee disengagement and burnout has on the employer’s bottom line. These costs range from 0.2-2.9 times the average cost of health insurance and 3.3-17.1 times the average cost of employee training to employers. These results also give a sense of how much employers might want to invest in preventing disengagement and burnout. There are a number of possible interventions that could reduce the risk of disengagement and burnout from companies offering mental health benefits to financial literacy programs to properly managing employee workloads. However, each of these do require financial commitments to establish and maintain.

“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."

Funding: This work was supported by the National Center for Advancing Translational Sciences of the National Institutes of Health via award number U54TR004279, the Agency for Healthcare Research and Quality (AHRQ) via grant 1R01HS028165-01, the National Institute of General Medical Sciences as part of the Models of Infectious Disease Agent Study network under grants R01GM127512 and 3R01GM127512-01A1S1, the National Science Foundation via award number 2054858 and U.S. Agency for International Development under Agreement No. AID-OAA-A-15-00064. Statements in the manuscript do not necessarily represent the official views of, or imply endorsement by NIH, AHRQ, the US Department of Health and Human Services or USAID. None of the study sponsors had any role in study design; collection, analysis, and interpretation of data; writing the report; or the decision to submit the report for publication.

Declaration of Conflict of Interest: No financial disclosures have been reported by the authors of this paper.

Media contact:
Alexis Dibbs
dibbs.alexis@gmail.com

About CUNY SPH

The CUNY Graduate School of Public Health and Health Policy (CUNY SPH) is committed to promoting and sustaining healthier populations in New York City and around the world through excellence in education, research, and service in public health and by advocating for sound policy and practice to advance social justice and improve health outcomes for all.

About PHICOR

Since 2007, PHICOR, Public Health Informatics, Computational, and Operations Research (www.PHICOR.org) has been developing computational methods, models, and tools to help decision makers better understand and address complex systems in health and public health. Follow @PHICORTeam on Facebook, LinkedIn, YouTube, and Twitter for updates.

About JHU

The mission of Johns Hopkins Medicine is to improve the health of the community and the world by setting the standard of excellence in medical education, research and clinical care.

About Baruch College

Backed by a long tradition of excellence in higher education, the Zicklin School of Business is located within Baruch College—an institution that consistently ranks among the region’s and nation’s top performers in academic excellence, diversity, and value.

About University of San Diego’s Knauss School of Business

The Knauss School of Business at the University of San Diego (USD) is committed to developing socially responsible leaders with a global mindset through values-based education and innovative research. Together, we work to advance sustainable and ethical business solutions that address the world's greatest challenges.