It is time for organizations to view burnout as more than an isolated problem affecting employees who lack resilience. Burnout is more than a personal problem. It is a growing workplace challenge that triggers a cascade of expensive consequences—disengagement, absenteeism, higher turnover, and rising insurance claims.
Chronic workplace stress, which the World Health Organization considers the main cause of burnout, is increasing worldwide. People are overwhelmed by heavy workloads, constant priority shifts, and pressure to keep up. Organizational change driven by artificial intelligence (AI) and corporate restructuring means team members are anxious about job security. Managers are feeling the weight of delivering growth while having fewer resources. And because stress worsens physical and mental health, organizations and insurers face mounting claims costs.
“Burnout is not simply stress; it’s not just fatigue or exhaustion. Burnout stems from specific, structural aspects of the workplace,” says Oliver Brecht, Vice President and General Manager of Enterprise Solutions at Workplace Options (WPO). “It’s driven by a chronic imbalance between job demands and job resources.”
Burnout is a clear and costly threat to individual wellbeing and organizational success. However, employers can reduce risks to people and the bottom line by addressing the underlying causes of burnout and adopting proactive wellbeing strategies.
To achieve long-term, sustainable success, organizations must support their employees and reduce the risk of burnout.
The Human Cost of Burnout
Across the globe, chronic stress and heavy workloads are increasing the chance of workplace burnout. WPO’s Psychological Safety survey found that maintaining a healthy work-life balance was one of the top challenges reported by employees across 18 regions. A Gallup survey echoed those findings, reporting that roughly half of global workers were stressed for much of the previous day.
“We found that, on average, if more than 17.4% of your EAP (employee assistance program) consultations relate to workplace concerns or work-based issues, that suggests your work environment is having a higher-than-average impact on your people. That’s an indicator that burnout could be an organizational risk,” Brecht said.
Stress causes people to be more distracted, less able to focus, and more likely to make errors. According to WPO research, burned-out employees are significantly less likely to contribute new ideas, collaborate effectively, or take initiative. Teams experiencing high stress also report slower decision-making, less creativity, and reduced adaptability—critical liabilities in fast-changing markets. For employers, this translates into missed deadlines, stalled projects, lower customer satisfaction, and weaker overall performance.
People working in toxic workplaces are also less healthy, as they are more than 35% more likely to suffer from major diseases. Chronic stress is linked to significantly higher rates of:
- Anxiety and depression, often occurring with emotional exhaustion and cognitive strain
- Sleep disorders, including insomnia and chronic fatigue
- Stress-related physical conditions, such as headaches, gastrointestinal issues, cardiovascular disease (heart attack, stroke), weakened immunity, musculoskeletal pain (back pain, joint pain), and type 2 diabetes.
While burnout itself is not a medical diagnosis, the resulting stress contributes to these chronic conditions, increasing their severity and making treatment more challenging. Unaddressed workplace pressure creates a vicious cycle, worsening both mental and physical wellbeing through poor sleep and unhealthy behaviors, increasing risks for serious long-term illnesses and longer sick-leave duration.
Who has the Highest Burnout Risk?
People who work in industries or job functions characterized by high workload intensity, emotional labor, or limited autonomy face elevated risk. Globally, higher burnout rates are consistently reported in healthcare, education, financial services, technology, logistics, and customer-facing roles. These sectors often combine high performance expectations with resource constraints.
Healthcare workers, for example, face long hours, staffing shortages, and emotional strain. The World Health Organization found that 66% of nurses and physicians—two out of three providers—suffer from burnout.
“Health workers often have to cope with high workloads, long working hours and a lack of flexibility, all of which impact on their mental and physical health,” says Petri Aspegren, a lecturer at the Oulu University of Applied Sciences in Finland.
A global survey by Upwork found that 58% of technology professionals are overwhelmed by their daily responsibilities. Those feelings are worsened by rapid innovation cycles, job insecurity, and blurred work boundaries. In financial services, regulatory pressure and long working hours contribute to more than half of respondents to one survey reporting high levels of burnout.
Across industries, frontline workers also face a higher risk of burnout due to unpredictable schedules, emotional labor, limited autonomy, and constant public interaction. When staffing is thin and recognition is low, stress compounds quickly. A 2024 global study found that 75% of frontline workers report feeling overworked and undervalued.
Burnout also disproportionately affects women, younger workers, parents, and LGBTQ+ employees. Nearly half (48%) of workers aged 18–29 report feeling overwhelmed, compared with 40% of those 30 and older, while women report higher burnout than men (46% versus 37%). In a recent survey, 65% of working parents told researchers they were burned out. And among LGBTQ+ employees, the risk of burnout increases along with a range of negative mental health outcomes.
Organizational Costs and Outcomes
While the human toll is visible—anxiety, depression, and declining wellbeing—the financial consequences are less understood. A Gallup/Workhuman survey puts the global financial impact of burnout at $322 billion annually. For an average 1,000-person company, employee burnout costs more than $5 million annually, primarily through lower productivity, absenteeism, turnover, and increased health care expenses.
Health care expenditures at high-pressure organizations are nearly 50% higher than those at organizations with healthier cultures, according to Workplace Options. In the U.S. alone, hostile workplaces are estimated to cost employers close to $24 billion annually due to sickness and healthcare costs. In addition, 60% to 80% of all workplace accidents can be linked to work-related stress, as well as more than 80% of doctors’ visits.
“Burnout is pervasive and it’s costing organizations millions each year,” says Molly Kern, professor at Baruch College in New York City. “Organizational leaders need to consider how their cultures and benefits programs support the 60% of employees silently struggling with burnout.”
The Cost of Absenteeism and Presenteeism
Emotionally exhausted employees are more likely to take unplanned sick leave, disability days, or stress-related absences. Over time, these disruptions strain teams, increase overtime costs, and create cascading costs that are rarely attributed to burnout.
According to estimates, absenteeism costs the global economy more than US$ 1 trillion per year in lost productivity. That figure is supported by regional studies:
- In Europe, the cost of unscheduled absenteeism is estimated to be 2.5% of GDP per year, amounting to €420 billion.
- In the U.K, absenteeism costs employers roughly £138 billion per year. In addition, burnout and other mental health issues cause more than twice as many absences as other causes, according to insurance company Vitality.
- Canadian companies lose an estimated C$16.6 billion in productivity per year due to absences from mental health issues.
At the same time, presenteeism—employees working while mentally or physically exhausted—is far more common and damaging. The Institute for Public Policy Research (IPPR) found that U.K. workers took relatively few sick days, less than seven annually, but working through illness resulted in an additional 44 days of lost productivity. In monetary terms, worker sickness cost the U.K. economy roughly £103 billion in 2024, but 84% of that figure was due to presenteeism and lost productivity.
Turnover and the Cost of Replacement
Burnout is also one of the strongest predictors of voluntary turnover. According to global research from Gallup, burned-out workers are 2.6 times more likely to seek a new job than their peers. Roughly 60% of those jobseekers want more work-life balance.
And high attrition rates carry a substantial price tag. For mid-level roles, replacement costs typically range from 100% to 150% of annual salary, factoring in recruiting, onboarding, training, and lost productivity. For specialized or senior roles, that figure can climb to 200%, and that’s not the only cost. When high performers leave, organizations lose institutional knowledge, disrupt client relationships, and place additional strain on remaining staff.
Burnout and Rising Benefits Costs
Not surprisingly, employees who are under chronic stress use their health benefits more often. Burnout is linked to mental health disorders like anxiety and depression, and physical conditions such as cardiovascular disease and weakened immunity.
Globally, claims related to mental health and chronic conditions are increasing in frequency, lasting longer, and costing more per episode, according to Mercer’s 2026 Health Trends report. The global survey of insurers identifies prolonged recovery times and repeat claims as key contributors to rising benefit costs.
Cardiovascular disease, currently the world’s leading cause of death, is worsened by stress-related conditions like high blood pressure, diabetes and obesity. The financial impact of cardiovascular disease on global health systems is expected to surpass US$1 trillion by 2030. More than half (55%) of the costs are direct healthcare expenses, and 45% are due to lost productivity.
If the underlying source of stress isn’t addressed, these and other burnout-related illnesses can become chronic, requiring long-term treatment. The increased demand for healthcare services—psychiatric care, mental health counseling, physician appointments, hospitalization, and prescription medications—places pressure on already strained systems.
For insurers, this translates into more frequent claims and longer treatment durations. For employers, particularly those with self-insured plans, it directly affects year-over-year healthcare spending.
What Interventions Help Prevent Burnout?
Burnout prevention is essential to managing healthcare costs—one that shifts organizations from reactive cost management to proactive risk reduction. One of the most critical protective factors is access to mental health resources. Stress cannot be eliminated entirely from work, but adequate support can prevent it from escalating.
“No matter how safe your environment is, there is always a risk that someone may experience burnout,” WPO’s Brecht explains. “That’s why organizations need robust, frontline wellbeing infrastructure—one that’s designed around the needs of their employees and ease of access.”
Interventions are most effective when implemented as part of a system, rather than as isolated programs. The return on investment for burnout prevention comes from avoided costs: fewer resignations, lower absenteeism, reduced healthcare utilization, and improved performance.
Evidence-based burnout mitigation strategies include:
- Access to mental health resources: Ready access to confidential counseling, EAPs, and crisis support helps employees manage stress early, preventing more serious psychological injury.
- Leadership capability: Managers who set clear expectations, notice early signs of strain, and respond with empathy can reduce burnout risk by addressing stress before it becomes chronic.
- Workload and job design: Roles with excessive demands, unclear priorities, or constant urgency increase burnout, while regular workload reviews and job redesign help sustain performance.
- Autonomy and flexibility: Giving employees control over how and when work gets done buffers stress and supports resilience, especially during periods of high demand.
- Recognition, fairness, and psychological safety: When employees feel valued, treated fairly, and safe to speak up, stress is less likely to develop into burnout.
Employee wellbeing is a powerful predictor of productivity, profit, and market success. According to a study from Oxford University, companies with higher wellbeing scores outperformed the S&P 500 by 11%.
Organizations investing in comprehensive wellbeing strategies can see significant benefits that outweigh program costs over time. Global institutions such as the World Health Organization and Deloitte report significant economic benefits when companies invest in mental health care. According to the McKinsey Health Institute, each $1 spent has a financial return of $5 to $6. In economic terms, scaling mental health could boost the global economy by up to $4.4 trillion by 2050.
Addressing burnout improves physical health as well, lowering the risk of cardiovascular events, lowering blood pressure, and improving sleep. Stress-reduction programs that promote regular physical activity are particularly effective, cutting the risk of heart disease by 50% or more.
It’s clear that preventing burnout costs less than dealing with its consequences. For insurers, stress prevention strategies can stabilize claims patterns and reduce long-term exposure. For employers, reducing burnout improves retention, cuts absenteeism, boosts engagement, and adds to workforce resilience—outcomes increasingly valued in volatile markets.
From Human Cost to Financial Strategy
Burnout and chronic stress are no longer peripheral workforce issues. For organizations and insurers, CHROs and CFOs, the question is not whether burnout is costly, but whether those costs will remain hidden and reactive, or become visible and manageable through proactive strategy.
Organizations that invest early in risk mitigation are not only protecting employee health. They are improving productivity, stabilizing healthcare spending, and strengthening their ability to adapt under pressure. In economic terms, burnout prevention is not an expense. It is a form of risk management—one that pays dividends in both human and financial capital.
