Group of matches, some are burned

The cost of burnout in US companies for 2023


The cost of doing business doesn’t always show up in your P&L report. That’s why Customer Experience (CX) leaders are starting to recognize the hidden costs of doing business: like burnout costs. When a highly trained call center agent is replaced, burnout cost could be half an employee’s annual salary.

Although it makes sense unaddressed agent burnout leads to decreased productivity, the direct impact on budgets may not be obvious.  

What is burnout cost?

Burnout cost is the hidden internal tax you pay by not addressing low engagement and employee morale concerns. Because the term “burnout” is tossed around frequently and often misunderstood, it’s important to define it. The Maslach Burnout Inventory (MBI) was developed for a better understanding of the issue, which is characterized by three dimensions: 

  • Feelings of energy depletion or exhaustion
  • Increased mental detachment from one’s job, or feeling of negativism, or cynicism related to one’s job
  • Reduced professional efficacy

When accurately measured, 10% to 15% of employees fit the true burnout profile, according to Christina Maslach, professor of psychology and a core researcher at the Healthy Workplaces Center at the University of California, Berkeley. “…over half of employees are likely negative in one or two dimensions — not burned out, but perhaps on the pathway there.” she writes in HBR.

“In an organization with 10,000 agents, where 15% of them suffer from burnout, the expense of such neglect can amount to over $26 million annually.”

Employee burnout sabotages workforce retention, according to 95% of HR leaders (Kronos), and turnover is costly for businesses. To put some numbers to this, if an employee’s salary is $50,000, Gallup calculates the replacement cost could be between $25,000 and $100,000 per employee. Therefore, replacing an entry-level agent at $35,000 could cost $17,500. Doing some back-of-the-napkin math, in an organization with 10,000 agents, where 15% of them suffer from burnout, the expense of such neglect can amount to over $26 million annually, with half the call center at risk. Burnout cost isn’t limited to just turnover, however. 

Employee burnout is linked to low morale as well. Reduced engagement and motivation directly result in lower productivity. Workers are more likely to miscommunicate on the job and make mistakes that can cost companies long-term. The financial impact of poor work engagement in the United States alone is estimated to be $550B annually according to Hubspot

Burnout cost is bleeding many large organizations’ CX budgets dry before they realize there’s a problem. 

Bad customer experiences cost billions.

In the customer experience space, the reduced engagement and motivation that employees face due to burnout can leave customers feeling unheard and underappreciated. U.S.-based companies are losing over $75 billion dollars annually due to poor customer experiences according to a study conducted by NewVoiceMedia. Customers are quick to switch to a new company after having inadequate customer service experiences, leaving money on the table.

Why efforts to combat burnout cost have failed.

CX leaders often turn to team-building events, employee assistance programs (EAPs), and coaching programs in an attempt to reduce burnout costs, yet these efforts often fail to generate any long-term outcomes. 

While team-building events get teams excited, they often lose their effectiveness soon after completion according to the Society for Human Research Management (SHRM). Without daily nudging, individuals fall back into the stress cycle. EAPs are highly effective but typically only have a 5% adoption, SHRM notes. Coaching is effective but only reaches a small percentage of the population and requires individuals to take the initiative.

Over 90 percent of people who set New Year’s Resolution goals fail to keep them, according to research from the University of Scranton. By February, however, that number is 80%. “Unless you first change your mind, don’t expect your health goals to materialize,” writes clinical psychologist Joseph J. Luciani, Ph.D. for USNews

Salary transparency, ensuring work-life balance, remote or hybrid work opportunities, addressing workplace toxicity, discrimination reduction efforts, investing in employee training, and reducing workloads are helpful. Still, without addressing core issues, they’re costly bandaids. 

Organizations prioritizing wellness and ensuring employees feel safe to voice concerns have better performance and less attrition. CX leaders want to instill psychological safety in their organizations. However, driving long-term efforts has been historically difficult without significant investment. 

Why investing in customer experience solutions matters.

A study commissioned by Qualtrics found that there is up to a 633% return on investment over three years when organizations invest in customer experience solutions. Addressing burnout is part of this equation and can help employees deliver exceptional customer service.
The biggest challenge CX leaders face is implementing sustainable strategies on a daily basis that consistently address burnout costs. It’s best for agents to start small. “Take a look at the habits that are holding you back in life,” writes Dr. Luciani. Small steps all day, every day are key. “Throughout the day, find simple challenges that you make happen.”

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Addie Rouse leads events at 3 Tree Tech. She leads CX, events, hospitality, marketing, and office administration. She graduated with a BA from Portland State University.