Burnout costs businesses 2.9x more than health insurance: Report

Employee burnout is emerging as a critical financial challenge for Indian businesses, with new research showing that its impact far exceeds the cost of providing health insurance or professional training. A study published in the American Journal of Preventative Medicine estimates that burnout costs companies between ₹3.3 lakh and ₹17.4 lakh per employee annually, driven by lost productivity, absenteeism, and disengagement.

The financial burden varies by job role: burnout costs ₹3.3 lakh per year for nonmanagerial employees, ₹8.3 lakh for managers, and ₹17.4 lakh for executives, who often experience higher levels of stress. For a company with 1,000 employees, this could result in over ₹40 crore in annual losses if burnout is widespread.

The study also reveals that burnout can be 2.9 times more expensive than providing health insurance and 17.1 times costlier than investing in employee training. Despite this, many organizations in India continue to underestimate its impact on overall business performance.

Researchers from the CUNY Graduate School of Public Health and Health Policy used a computational model to track how employees move through different stages of engagement—from being productive to experiencing stress and eventually burnout. The model examined workplace stressors like high workloads, long hours, and lack of managerial support, confirming that burnout leads to significantly lower productivity, increased errors, and frequent absenteeism.

"By quantifying the financial impact of burnout, we help businesses understand why employee well-being must be a priority," said Bruce Y. Lee, senior author of the study and professor at CUNY. "Addressing burnout isn’t just about employee health—it’s a strategic move for financial sustainability."

Workplace burnout is becoming more prevalent in India, where long working hours and job insecurity are common challenges. A 2024 SHRM study found that 44% of employees report feeling burned out, with key causes including:

• Extended work hours and unrealistic deadlines

• Lack of career growth opportunities

• Limited work-life balance due to remote and hybrid work expectations

• Poor managerial support and unhealthy workplace culture

With India's rapidly evolving job market and growing demand for skilled talent, high burnout rates contribute to increased attrition, lower engagement, and declining productivity across industries.

How companies can tackle burnout

To reduce burnout, the study emphasize that employers—not just employees—must take proactive steps. Some key strategies include:

✔ Offering mental health support through counseling and wellness programs.
✔ Implementing flexible work policies to improve work-life balance.
✔ Investing in career growth opportunities to boost engagement.
✔ Ensuring fair workload distribution to prevent overwork.

Indian workplaces are already seeing the effects of burnout in rising attrition rates and productivity challenges.Consulting firms such as Pollack highlight that organizations that prioritize workforce well-being see better retention, stronger performance, and higher employee satisfaction.

With burnout costing Indian employers crores in lost productivity, businesses can no longer afford to ignore this growing crisis. Investing in employee well-being is no longer a choice—it’s a necessity for long-term success.