Employee burnout is costing businesses millions each year. A study from the City University of New York (CUNY) estimates that burnout costs U.S. companies between $4,000 and $21,000 per employee annually. For a company with 1,000 employees, that adds up to around $5 million a year.

The study uses a computer model to track how employees move from being engaged to burned out. It considers job type—hourly workers, salaried employees, managers, and executives—and how engaged they start. Over time, employees face workplace and personal stressors like workload, fairness, finances, and health. The more stress they experience, the more likely they are to burn out, which reduces productivity and harms health.

Huge costs

The model estimates that an hourly worker suffering from burnout costs a company about $4,000 per year. The cost rises to $4,257 for a salaried employee, $10,824 for a manager, and $20,683 for an executive. A typical company with 1,000 employees—made up of 59.7% hourly workers, 28.6% salaried employees, 10% managers, and 1.7% executives—loses about $5.04 million a year to burnout. The study also estimates that burnout results in the loss of 801.7 quality-adjusted life years annually.

Burnout’s cost is significant compared to other expenses. Per employee, it equals 0.2 to 2.9 times the cost of health insurance and 3.3 to 17.1 times the cost of job training. These numbers show why businesses should invest in preventing burnout.

Companies have options, like offering mental health benefits, financial literacy programs, and better workload management. But these solutions take time and money. As the researchers point out, 60% of employees struggle with burnout in silence. Without action, the costs—both financial and human—will keep rising.