The Hidden Costs of Executive Burnout: Beyond the Bottom Line
Living in today's high-pressure business environment, 'executive burnout' is no longer just a buzzword. More and more, I am seeing it emerge as an organizational risk. It seems to be one of those things demanding immediate attention (because of the staggering financial and human costs). The impact of burnout on individuals' well-being is just the tip of the iceberg really. Still, devastating ripple effects throughout organizations affect everything from team morale (should we just sit around in a circle and sing Kumbaya) to the bottom line ($).
Burnout Has Been On The Rise
Let's be honest; the 2020 pandemic has only intensified the trend. A 2023 Gallup study found that employee burnout is at an all-time high, with 76% of workers experiencing burnout at least sometimes. Among executives and high-stakes professionals, these numbers are even more alarming.
But What About The Finances
I ran some number and consulted google, here is what I came up with. These are the real numbers of burn out, and in my opinion, they are BIG numbers.
Did you know the average cost of replacing a C-suite executive is $213,000
Did you know the average cost of replacing a physician is $500,000 - $1 million
And total cost of burnout-related turnover in the healthcare (think dcotrs, nurses, respirtory therapists) industry alone is a whopping $4.6 billion annually.
Okay so these figures were reported by the American Medical Association and only represent the tip of the iceberg. There are other things to consider that we can't put a price tag on like disrupted team dynamics, damaged client relationships, and loss of institutional knowledge.
A Little Closer Look For My Healthcare People
What we saw from the start of the pandemic was that healthcare workers were pushed to their limits. These were the essential "frontline workers" sleeping in hospitals, working without extra pay, outside of ratio. It is no wonder why the turnover rate is what it is in major hospitals and that we saw many people leaving the healthcare field all together from 2021 on.
A Little Closer Look For My Start-up Executives
The "move fast and break things" culture has its price. In reviewing a Harvard Business Review survey I found that 72% of start-up executives work 50-80 hours per week (are you kidding me!), with 19% reporting severe burnout symptoms (not surpised here).
And all of this is put at risk with replacement costs when key people in thestart up leave becuase this is not sustainable.
A Little Closer Look For My Project Managers
It wasn't until recently that I lumped project managers into the category of "high-stakes" professionals. Unique pressures are put on project managers, especially those within large organizations and start-ups. The Project Management Institute reported that organizations lose 11.4% of their investment due to poor project performance, which I would say is not due to the person not being right for the job but because of burnout-related mistakes and turnover.
Alas, The Cascading Effect Of Burn Out
When we think about burnt-out (crispy) professionals in these fields, we have to realize the effect. There might be a decrease in the decision-making quality, an increase in errors, high turnovers within direct reports, company culture may take a hit. There might be a loss of business partners because of all of this.
I want to give some potential solutions.
Employees please take your vacation days, your sick days, your mental health days. Please schedule time off of work. As employees, please set boundaires at work, take advantage of the wellness programs (which may be the EAP within your insurance or wellness initiatives) and communicate your needs.
Companies and organizations, invest in your employees! Have mandatory vacation/time off policies. If you can do hybrid work, do it, allow your employees to work from home in their cookie monster pajama pants, and review assignments and job duties regularly.
On an individual level, take regular stress assessments (available free online), set clear boundaires, get regular exercise and practice good sleep hygiene and work on implemeting mindfuless exercises in your daily routine.
The leaders and decision makers play a cruicial role in addressing this. They need to recognize that burnout isn't just a personal issue, but something that requires systematic attention, it's time to create cultures within workplaces where sustainable performance is valued over short-term gains.
Let's work towards shifting the view of burnout prevention strategies and policies as "luxury" to critical strategic investments.
References:
- Gallup State of the Global Workplace Report
- American Medical Association Physician Burnout Studies
- Mayo Clinic Physician Burnout Research
- Harvard Business Review Executive Health Survey
- Project Management Institute Cost of Poor Performance Report
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