Employee burnout – just sparks or a fire?

Nearly one in four Canadian workers are burnt out, which is an increase from just over one in three in 2023, says a recent report. And that increase is costing employers money. 

The Mental Health in the Workplace 2025 report estimates that burnout costs range from $5,500 for an hourly worker up to $28,500 for an executive per year. For a company with 500 employees, that’s $3.4 million annually in lost productivity and salaries. 

But there’s a silver lining to the findings - companies that prioritize burnout prevention see a 30-per-cent lower burnout rate and save up to $1.7 million annually. Those that do nothing face rates 20 per cent higher than average. 

However, almost half of Canadian employees say their companies don’t prioritize burnout prevention or they’re unaware if there is such a program, with only 36 per cent seeing real programs or policies in place. 

To some, it may seem that it wasn’t that long ago when no-one was talking about employee burnout and it didn’t seem to be on the radar of employers or employees. So why is it such a problem now? Michael Cooper, Vice President of Data and Partnerships at Mental Health Research Canada - which produced the report from its survey of employed adults across Canada - thinks that there’s always been some awareness of burnout, but factors such as the pandemic a few years ago and now return-to-office mandates are contributing to the rising rates – as well previously burned-out workers returning to the workforce. 

“The workforce has shifted somewhat in terms of some of the most burned-out individuals who left are now going back into other workforces,” he says. “It’s also external pressures people are bringing to work, such as the high cost of living and the return to in-person work, because burnout isn’t simply driven by your office environment, it's what you bring into the office to some extent, too.” 

Burnout prevention boosts productivity, saves on costs 

The consequences for employers of ignoring burnout are both financial and cultural. The report finds that companies taking no action on burnout have a burnout rate of 47 per cent, compared to 27 per cent where prevention is a priority. The cost difference is dramatic - prioritizing burnout prevention can boost productivity or savings by $3,400 per employee, according to the report. 

Cooper believes that the financial cost of rising burnout levels is a key factor that should drive action at the executive level. 

“Many insurance providers have gone on record to say that mental health claims are the fastest growing type of disability claim in this country,” he says. “While they're not necessarily always the largest in terms of the number of total disability claims, they're some of the most expensive claims.” 

The younger generation is also making decisions about where they want to work based on the values of an organization – including its attitudes towards employee mental health and wellness – so it’s important for senior leadership to understand the nature of employees coming to work with their organization, says Cooper. 

Rising burnout levels are also an effect of leadership attitudes and actions - or lack thereof – that can come from a lack of understanding of where burnout can be best addressed in an organization, according to Cooper. 

 “I don't think there’s a very high mental health literacy in the general population - which would extend into the leadership class as well - and a lack of understanding about how burnout actually is affecting your bottom line in terms of lack of productivity, distractions, ability at work, and an inability to focus,” he says. “I don't think people necessarily understand how to spot burnout or know how to address it when they see it - they have more immediate concerns. It's one thing to value burnout, it's another thing to value burnout when you're facing critical deadlines.” 

Empowering direct managers to address burnout 

This knowledge gap is reflected in the report’s findings. While 81 per cent of managers say they prioritize preventing worker burnout, only two-thirds feel equipped to support employee mental health, even though support from colleagues (65 per cent) and direct managers (59 per cent) has the strongest positive impact on employee mental health – significantly more than senior leadership (48 per cent) or human resources (38 per cent).  

Cooper believes there’s often a lack of connection between senior leadership and rank-and-file employees, which can make things seem more impersonal and increases the importance of direct managers in mitigating burnout. 

“Policies that are flexible and empower middle management to work with those individuals as they see fit to make sure that burnout isn’t occurring is key,” he says. “That's the primary responsibility of senior leadership policy - flexibility and empowerment.” 

“If your direct engagement with your supervisor is poor, you will be more likely to burn out,” adds Cooper. “With the caveat that there are some sectors [such as first responders] that are psychologically hazardous and traumatic - but in the general sense, it's often interpersonal relationships that are one of the primary causes of burnout.” 

Promoting psychological health and safety 

So what can leadership do to mitigate the effects of burnout on their organizations? The report shows companies that prioritize burnout prevention see dramatically lower rates of burnout and the associated cost savings. Promoting psychological health and safety with measures such as paid time off (69 per cent), personal days (58 per cent), and flexible schedules (52 per cent) are the most effective supports for mental health, far outweighing the impact of social events or awareness programs, the study found. 

“It's about having strong psychological health and safety in the workplace - recognition, rewards, limiting toxic behaviors in the workplace - there's a lot of these things that you can do that people just aren't aware of,” he says. “I look at it as policy plus emotional intelligence of leaders as the best way to prevent burnout.” 

“It’s not just a humanistic argument,” adds Cooper. “I can make an economic argument with disability claims, presenteeism, absenteeism - all of these things are significant drags on our economy.”