What are costs of Work-Stress and Burnout

Stress is an unavoidable part of modern work. Tight deadlines, complex projects, and constant digital connectivity place employees under sustained pressure. While moderate stress can sometimes act as a motivator, chronic stress poses serious risks to both individual wellbeing and organisational performance. When left unmanaged, it can escalate into burnout, an occupational phenomenon recognised by the World Health Organization (2019) and increasingly prevalent across industries.

This article will examine the hidden costs of stress and burnout, and will propose evidence-based strategies organisations can adopt to mitigate these risks.

The hidden costs

Burnout is characterised by three dimensions: emotional exhaustion, depersonalisation or cynicism, and reduced professional efficacy (Maslach & Leiter, 2016). It is not simply fatigue but a chronic state that fundamentally undermines an individual’s capacity to engage meaningfully with their work.

The consequences are wide-ranging. At an organisational level, burnout increases absenteeism, employee turnover, and healthcare costs (Schaufeli, 2017). Exhausted employees may withdraw socially, reducing collaboration and harming overall team performance. At an individual level, burnout is linked with anxiety, depression, and long-term health conditions such as cardiovascular disease (Ganster & Rosen, 2013).

These costs are not abstract. A Deloitte (2020) report estimated that poor mental health, much of it tied to stress, costs UK employers up to £45 billion annually. Beyond the financial loss, organisations risk eroding trust, damaging their reputation, and diminishing their long-term competitiveness.

What contributes to burnout

Work-related stress is rarely the result of individual weakness; it is more often a systemic issue embedded in organisational design. Research highlights several common drivers:

• Excessive workload: Unrealistic deadlines and constant task overload.

• Low autonomy: Lack of control over how and when tasks are completed.

• Poor social support: Inadequate managerial or peer support networks.

• Role ambiguity: Unclear expectations or conflicting demands.

These conditions create what Karasek’s Job Demand-Control Model (1979) describes as “high-strain jobs,” where employees face heavy demands but lack the resources or autonomy to cope effectively.

Possible solutions

While stress cannot be eliminated entirely, organisations can take proactive steps to reduce harmful levels and prevent burnout. Three interventions stand out:

1. Redesigning workloads and roles

Workload management is a critical first step. Leaders should regularly review task allocation to ensure demands are realistic. This can be supported by clearer role definitions, which reduce ambiguity and ensure employees understand priorities. Evidence shows that aligning job demands with available resources significantly lowers stress and burnout risk (Bakker & Demerouti, 2007).

2. Enhancing Autonomy and Flexibility

Providing employees with greater control over their work reduces feelings of helplessness and increases engagement. Flexible working arrangements, such as hybrid models or flexible hours, can be powerful tools. A meta-analysis by Gajendran and Harrison (2007) found that flexible work significantly improves work-life balance and reduces stress, without harming performance.

3. Fostering Social Support and Psychological Safety

Supportive leadership and peer networks buffer against stress. When employees feel safe to share challenges without fear of negative consequences, they are more likely to seek help early. Research by Edmondson (1999) shows that psychological safety not only reduces stress but also improves team learning and performance. Training managers to recognise early signs of burnout and respond with empathy is therefore essential.

Conclusion

Stress and burnout are not merely individual health concerns. They are organisational challenges with profound human and financial implications. The solution lies not in expecting employees to “toughen up” but in rethinking how work is structured and supported. By addressing systemic drivers such as workload, autonomy, and support, organisations can create environments that protect employees while enhancing long-term resilience and performance. In doing so, organisations not only reduce hidden costs but also cultivate a healthier, more engaged, and more productive workforce.

Bakker, A. B., & Demerouti, E. (2007). The Job Demands–Resources model: State of the art. Journal of Managerial Psychology, 22(3), 309–328.

Deloitte. (2020). Mental health and employers: Refreshing the case for investment. Deloitte UK.

Edmondson, A. (1999). Psychological safety and learning behavior in work teams. Administrative Science Quarterly, 44(2), 350–383.

Gajendran, R. S., & Harrison, D. A. (2007). The good, the bad, and the unknown about telecommuting: Meta-analysis of psychological mediators and individual consequences. Journal of Applied Psychology, 92(6), 1524–1541.

Ganster, D. C., & Rosen, C. C. (2013). Work stress and employee health: A multidisciplinary review. Journal of Management, 39(5), 1085–1122.

Karasek, R. (1979). Job demands, job decision latitude, and mental strain: Implications for job redesign. Administrative Science Quarterly, 24(2), 285–308.

Maslach, C., & Leiter, M. P. (2016). Understanding the burnout experience: Recent research and its implications for psychiatry. World Psychiatry, 15(2), 103–111.

Schaufeli, W. B. (2017). Burnout: A short socio-cultural history. In J. D. Wright (Ed.), International Encyclopedia of the Social & Behavioral Sciences (2nd ed., pp. 929–935). Elsevier.

World Health Organization. (2019). Burn-out an “occupational phenomenon”: International Classification of Diseases. WHO.