Burnout is costing companies as much as $5 million a year—Here’s how that breaks down from average worker to top executive

A stressed out woman sits at her desk with her hands on her head and looking at paperwork. (Credit: Getty Images / Westend61)

It’s easy to dismiss burnout as just another corporate buzzword. But as it turns out, a sometimes-squishy concept could have a huge impact on a business' bottom line. 

Employee disengagement and burnout resulted in over $5 million in costs annually to the average U.S.1,000-person company, according to a recent study published in The American Journal of Preventive Medicine. 

The cost of burnout breaks down in different ways for different rungs of the corporate ladder. For the average U.S. non-managerial hourly employee, burnout-related disengagement over the course of a year costs their employer an average of $3,999 per year. That figure rises to $4,257 for a non-managerial salaried employee, and $10,824 for a manager. While executives are generally less burned out than lower-ranking colleagues, they end up costing their employers much more when they do hit the wall—around $20,683 a year. 

But where does all that money go? Around 10.5% of employee burnout costs are due to increased absenteeism or employees missing work, according to the study. But 89.5% is due to presenteeism, or employees who show up to work but fail to be productive. 

And although researchers were able to put dollar amounts on employee disengagement and overwork, they say their study doesn’t even take into account the “network effect” that burnout can cause. The more employees that are feeling burnt out, the easier it will be for similar attitudes to spread amongst the workforce, especially those that are in close contact with burnt out employees. 

“A lot of attitudes and feelings can be quite contagious,” Dr. Bruce Y. Lee, professor of health policy and management at CUNY who co-authored the study, tells Fortune. 

It’s tempting for workplaces experiencing burnout not to prioritize disengagement and overwork until they absolutely have to. But Dr. Lee warns waiting until things start going wrong can be catastrophic. 

“Most organizations will take it very seriously if their sales dip,” he says. But burnout “should be taken just as seriously because it's affecting their costs.”