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‘Mitigating Financial Impact of Employee Turnover due to Burnout’

Prioritising Employee Wellbeing can lead them to Creative-Efficiencies and high financial value for companies. Easier said than done…. or achievable with a mindset shift?


Do you believe this could be the next wave of change in Workplace Culture? I believe it has started, at an early stage.


Studies globally have shown that lack of wellbeing can significantly impact creativity, efficiency, engagement and learning of individuals and also lead to toxic workplace cultures with long term financial costs to companies. For long this has been overlooked in the race to achieve incremental targets and run businesses profitably, but the impact of this reality on revenues and profitably is not understood well. Companies need to accept and invest in studying its impact on Business.


Burnout can have financial costs for companies and individuals both which is mostly not understood or overlooked. Studies in US have shown that attrition can cost companies an equivalent of 33% of an employee’s salary. This is the cost of hiring replacements over and above the salary of a replacement. While burnout and stress will be one the reasons for employee turnover, amongst others, this reason also gets masked amongst other reasons such as Compensation, Better Opportunity, Interests due to inhibition with employees to disclose it for fear of retaliation or questioning of their competencies


Some facts to substantiate the perspective, based on Global Studies by various organisations:

  • 95% of HR leaders admit employee burnout is compromising workforce retention

  • 46% of HR leaders say employee burnout is responsible for up to 20% to 50%, of annual workforce turnover

  • 15% HR Leaders at large organisations (more than 2500 employees) say, burnout causes 50% or more of their annual turnover

  • Psychological Associations in US have estimated that 550 million workdays are lost each year due to burnout

  • Burnout costs between $125 billion and $190 billion every year in healthcare costs in US


What could be the sources of Work place Burnout and avoidable Stressors?


It would be unwise to blame it all on Companies or Individuals. Rather it should be studied as - how an overall, collective system of management could lead to such outcomes. Here are some indicators: -


Too many decision makers for most decisions, leading to endless meetings/ conference calls, typical of large organisations?


Many cultures require collaboration beyond what is usually required to get work done – better called ‘Influencing’. While this may be unavoidable to an extent, but it would be important to understand ‘How deep is this culture in your Company, is it inevitable for most decisions?” If 'Yes', then it is a trigger of significant stress on time and working relations


Agile approach to setting and managing goals: Focus on fewer and more critical initiatives, to set/reset priorities and empowering teams to set and own their priorities. While timeboxing of projects is

important, do your managers also invest time scoping the goals on an agile approach. As macro environment and business conditions can change fast, scope of goals need assessment continually


Lack of Coaching: Management by Objectives and Continuous Performance Management have been popular for quite some time. But the importance of ‘Coaching Competencies’ in managers have been overlooked for a long time. Proactive and continuous coaching goes a long way in empowering teams to set, own and achieve their own goals.


Weak time-management:

Hustling essentially means working rapidly, energetically, forcing one’s way and aggressively, most of time. Managers needs to introspect if they may be over prioritizing too much on initiatives which may not make an ‘earth-shattering impact’ in the short run. If the answer to this introspection is ‘yes’ then it could be having significant and undesirable impact on time management of people in your organisation. While demand for collaboration is inevitable it would also help to study if it is outpacing the need to discipline ways of managing it. Do you need to decentralize many decisions and empower people to take them fast with less but impactful collaborators?


Free Riders & Over Utilizing the Competent: This is where in-effectiveness of Job/Role Design, Organisation Structure comes face to face with workplace realities.

There are ‘free riders’ in most teams in organisations. How do your managers deal with them, rather than overburdening the competent people in a team? In most scenarios there are tendencies to over depend on the Competent people. And that leads them to risk of burnout. Manager’s job is not just to best utilize resources but to also make sure that teams are fungible, flexible and reduce dependencies on a few


Unlike in US and Europe, in India there is a lack of sufficient study on direct financial losses due to burnout of employees. A lot many companies prefer to take people for sponsored luncheons, outings and parties but these are misunderstood as effective methods for taking care of burnouts. ‘Work Hard Party Harder’ is an exciting theme but if it is oversold at the cost of overlooking the impact of burnout to organisations and individuals, it is going to fizzle out. Bad turnover numbers and cost of replacement recruiting will evidence this risk.




Constantly changing priorities, deadlines and workload will always be there in the world of work, as these are part of dynamic industries/workplaces and also bring learning & growth.


But when these challenges are additionally burdened with realities such as being micromanaged, too-many decision makers, too many collaborators, lack of agile approach to goals, no coaching, hustling, over dependencies on competent people, lack of technology to reduce load of non-value tasks, lack of policies allowing leaves for Emotional Well Being, Vacation time, Limiting work messages/calls within certain hours, approachability of Managers/HR for issues related to burnout, policies for respectful work culture, use of Tech. and Analytics to predict burnout risk – an Organisation is exposed to the risk of ‘High Cost of Turnover due to Burnout’


At what stage is your organisation?


Written by

Vinit Verma

Managing Consultant

HRNetwork Plus Consulting

(Independent Consulting-Compensation, Benefits, Recognition Rewards, Compensation Software)

https://www.hrnetworkplus.com

Hyderabad, India

Dated: 04-07-2021





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Data References:

https://www.forbes.com/sites/rachelmontanez/2019/06/05/burnout-is-sabotaging-employee-retention-three-things-you-must-know-to-help/?sh=54ddbad5f0ed

https://www.forbes.com/sites/karlynborysenko/2019/05/29/burnout-is-now-an-officially-diagnosable-condition-heres-what-you-need-to-know-about-it/?sh=20e942c52b99

https://hbr.org/2017/04/employee-burnout-is-a-problem-with-the-company-not-the-person

https://hbr.org/2017/04/employee-burnout-is-a-problem-with-the-company-not-the-person

https://www.dnaindia.com/business/column-employee-burnout-means-revenue-loss-2600449

https://www.dnaindia.com/business/column-employee-burnout-means-revenue-loss-2600449


image courtesy:

https://www.pinterest.com/pin/1125968635242788/

http://guhc.net/beware-of-the-free-riders/

https://vitalitychicago.com/blog/how-to-succeed-agile-coach/

https://www.youtube.com/watch?v=ncGfAdXqdrg

https://www.wellmark.com/blue-at-work/healthy-employees/spot-and-stop-employee-burnout


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